Reliance's second $1bn deal at Cannes, this time with the Hollywood 8

The follow up to Reliance Big Entertainment's Billion Dollar film production deal was unveiled on Sunday in Cannes. It may not quite rival MGM's claim of 'More Stars than there are in Heaven', but it is not far off.

Deals have been struck with the actors and their production houses listed below, to develop scripts that will go into production with established Hollywood studios, with Reliance coming in as co-financing partner. The deal does not replace the existing deals that these production outfits have with Universal etal, but suppements.

- Nicolas Cage (Saturn Productions);

- Jim Carrey (JCB 23);

- George Clooney (Smokehouse Productions)

- Chris Columbus (1492 Pictures)

- Tom Hanks (Playtone Productions)

- Brad Pitt (Plan B Entertainment)

- Jay Roach (Everyman Pictures)

(+ one that is as-yet un-announced)

More details on thr nature of the deals form the Calcutta Times:

Another day and another billion announcement from Anil Ambani whose Reliance Big Entertainment today announced in Cannes that it will provide “development funds to eight leading creative forces in Hollywood”.

The value of the 30 films being developed jointly will be a billion dollars, “but this will not be the billion dollars that we talked about the other day,”said Amit Khanna, who is chairman of Reliance Big Entertainment and has been acting as the entity’s chief spokesman in Cannes.

“What it means for the average Indian is a sense of pride that India has finally arrived on the global media map,” Khanna explained to The Telegraph after his main press conference.

A billion here, a billion there... Pretty soon it starts to add up to some real money.

As the Times of London also notes, "the deals represent the biggest entry into the western media market by an Indian group and mark a reverse to the flood of money that has been poured into the Indian film industry by Hollywood production houses in recent months." Coming, as it does, not long after Sony, Disney and NBC-Universal's investment spree in Bollywood.

As my intrepid namesake P. Frater at Variety notes, these deals are not meant to rock the Hollywood studios' boat:

Deals are described as “production silos” under which Reliance Big Entertainment provides development coin to enable the talent to nurture or acquire movie projects before taking them to the studios with which they have first-look arrangements. In a second stage, deals allow Reliance to participate in up to 50% of a movie’s subsequent production funding and to secure rights in India.

“We are totally respectful of the existing first-look deals that each of our partners enjoys and are confident that the respective studios will welcome our development silos and our subsequent co-financing ability,” said Reliance prexy Rajesh Sawhney. “We are breaking completely new ground and not just as an Indian-based company.”

Khanna said the silos will likely become involved with 30 projects in the next couple of years, of which at least 10 will go into production. Reliance execs and CAA reps, who brokered the deals, were at pains to explain that Reliance coin is supplementary to the stars’ first-look deals rather than alternatives.

“We will increase the speed and safety of the elevator, but the destination is still the top floor,” said Reliance Big Entertainment CEO Amit Khanna"

The key to understanding Reliance ADAG is not to think of it as an Indian company abroad, but also to recognise it as a company that occupies the number one, two and three position in its home market with regards to the 'competition'. This is not boasting, but the distilled essence of my experience after more than half a year here. Reliance ADAG does not enter ANY market in which it is not sure that it will be number one and will do everything to ensure that position.

As an example, see the announcement on the same day of the launch of Reliance's Big TV DTH service into 4,000 Indian towns, which aggressively undercuts the competitions' prices while offering a better technology platform. Also on the same day, Reliance ADAG's gaming group Zapak announced its own $100m acquisition fund for expansion.

Given the size of such undertakings, the company is not interested in small deals and something like the Lowry Digital acquisition (a relatively paltry $7.m in comparison) was undertaken because it was strategic and would ensure the company became number on it this particular field.

Returning to Cannes, the second Billion Dollar Deal is particularly timely THR.com notes:

“This is a good thing for the studios with equity financing drying up thanks to the financial crunch,” said an agent from CAA, which brokered the deal. “It provides a new source of funding for the studios, and gives the studios a foothold in the India, a market they are all expanding into.”

If you doubt the crdit crunch impact on production, then read the IHT article 'Hollywood dreams face cold financial reality' and expect to read more in the future about what Mr Khanna (pictured above) calls "the reach and potential of India's steadily growing soft power".

Photocredit: Viewimages.com

Reliance's Billion Dollar Entertainment Baby

The Cannes Film Festival is in full swing but I didn't make it this year. Instead it was my boss' boss who went there to announce Reliance Big Entertainment's Billion Dollar Plan.

While the company has previously been involved in film production and distribution, nothing could have prepared the world for the magnitude of this commitment to making films in India and beyond.

From the Economic Times:

CANNES: Reliance Big Entertainment, the media and entertainment arm of the $75 billion Reliance Anil Dhirubhai Ambani group, on Friday announced that it would spend $1 billion on the Indian film and entertainment business over the next 12-15 months.

This is by far the biggest commitment made by an Indian entertainment company for show business. Amid the glitter and glamour at the 61st edition of the Cannes Film Festival at the French Riviera, Reliance Big Entertainment also revealed that 69 films in nine languages would be ready for distribution over the next 18 months. Over a dozen films will be released this year.

"India is uniquely positioned in the global economic order. We believe this is the right time to make this commitment of $1 billion for the film entertainment business," said Amit Khanna, chairman of Reliance Entertainment.

The best coverage of the Cannes event itself comes from the Telegraph of Calcutta:

The Ambanis don’t do things in small ways — and today Anil Ambani chose Cannes to make public what the media had been promised would be information on a “major and unique event”.

The news conference had been organised by DDA, a PR firm which usually handles established American and European clients. In the last few days, its publicists have been calling up journalists to make sure they would be in the Salon Diane of the Majestic Hotel to hear the announcement at 10am today.

It was left to Amit Khanna, chairman of Anil Ambani’s Reliance Entertainment Pvt Ltd, henceforth renamed the Reliance Big Entertainment, to drop the bombshell — the group would invest $1 billion (around Rs 4,250 crore) to change the face of the Indian movie industry as we have known it.

And the ambition is not confined to India alone. My very diligent namesake Mr Frater does a good job of capturing it all in Variety's 'Reliance sets out its very Big ambitions':

The company is expected to follow Sunday with further announcement about relationships and production deals involving Hollywood talent such as Will Smith, Tom Hanks, Julia Roberts, George Clooney, Brad Pitt, Tom Cruise and Bruce Willis. “It is time for Indian companies to step up and take on the world,” Reliance CEO Amit Khanna said.

From THR.com 'Reliance goes Big with billion-dollar unit':

Reliance's empire spans production, distribution, home entertainment and exhibition across the subcontinent and also has outposts in Sri Lanka and Mauritius among others. Khanna said the company plans to open offices in New York and Los Angeles.

Even our own little digital cinema effort got a mention at Cannes and in Variety: 'Unlike other digital cinema initiatives in India, Reliance Big Entertainment and its stock-market listed Adlabs unit, are rolling out fully DCI-compliant 2k systems.'

Yup, that's us. But more on those plans another time. Maybe Cinema Expo.

Ambani vs. Ambani showdown at the multiplex

It was an open secret that Mukesh Ambani had ambitions and plans to challenge his younger brother Anil Ambani in the multiplex space. But it came as a bit of a bombshell that the person who might implement the ambition is Manmohan Shetty, the man who set up Adlabs Cinemas before it was acquired by Anil's Reliance ADAG. From the Economic Times:

Manmohan Shetty, the founder of Adlabs Films, is likely to team up with Mukesh Ambani. The Reliance Industries (RIL) chairman is believed to be in negotiations with Mr Shetty to get him on board to shape and run a planned country-wide multiplex operation.

The RIL group is looking at about 500 screens across the country, according to persons familiar with the matter. Mr Shetty was, till not very long ago, a key member of ADAG’s entertainment business.

As part of its retail entertainment plan, the RIL Group is simultaneously in advanced talks with Yashraj Films (YRF) to ink an arrangement whereby all YRF films will be released in the planned chain. The partnership is also being cemented across other areas, all of which are part of the RIL’s Group foray into the entertainment business.

The group is in the process of setting up the back end for the proposed foray, largely using fibre optic linkages. According to sources, YRF and Mr Shetty are jointly forming a content company, which will be the primary vendor for the RIL Group’s entertainment venture.

If RIL is considering fibre optic linkage then they are considering digital cinema (again, no surprise, as we knew this from our spies), but this is logical for anyone looking to enter cinema at this late stage. Mr Shetty denies the partnership as does a Yash Raj spokesperson:

Mr Shetty denied the development stating, “There have been no talks or discussions between either Mukesh Ambani or YRF with me. No such deal/deals have been signed by me.”

A highly-placed source within the ADAG group said Mr Shetty was still in the last stages of his exit from ADAG and might not be comfortable talking of future plans.

Sanjeev Kohli, director and CEO Yash Raj Films, also denied being part of the RIL Group’s entertainment plans. “YRF has not signed any deal and we are not aware of developments in the areas that have been mentioned. YRF will certainly share with the media their future plans when they take concrete shape.”

It sure keep life interesting out here in India and we will see who will drink who's multiplex milkshake in the end.

UPDATE 17/05/08: Mr Shetty has directly denied that he is in any discussions with Mukesh. If not Shetty then let's see who he will put in charge of such a major effort.

Warner and Sony go to India, Adlabs goes to Malaysia

Having previously dipped their corporate toe in the warm flow of the Indian film production river, both Warner Bros and Sony Pictures are now taking the full plunge in. Sony has signed a three-picture deal with a major Indian production studio in a deal worth Rs 2.5bn ($62m), while Warners is pursuing a remake of The Wedding Crashers. From THR.com (as the-trade-magazine-formerly-known-as-the-Hollywood-Reporter now insists on calling itself):

In what would mark the first authorized remake of a Hollywood film here, Warner Bros. Pictures India is in discussions with Bollywood banner Orion Pictures for an official remake of the 2005 comedy "Wedding Crashers."

Orion Pictures, headed by producer Mukesh Talreja and director Nikhil Advani, is co-producing WBPI's Bollywood debut with veteran filmmaker Ramesh Sippy, "Chandni Chowk to China."

"We are in talks with Orion Pictures on the possibility of remaking 'Wedding Crashers' in India. Orion has shown keen interest, and they have lined up some of the best talent for this project," WBPI managing director Blaise Fernandes told The Hollywood Reporter on Monday, adding that a deal has not yet been signed.

Somebody at WB must have finally woken up to the fact that if Indian film producers see a film they like they will take the concept and make it their own. Without buying the re-make rights. That is how Three Men and a Baby became Heyy Babyy while Love, Actually morphed into Salaam-e-Ishq and most recently this Diwali's big Hindi release Ghajini is a remake of Tamil film also called Ghajini, which, if you liked this story of how "A man, suffering from short-term memory loss, uses notes, tattoos and photo's to hunt down his girlfriend's killer", Amazon suggests you might also like Memento. If you can't beat them, beat them to the re-make at least.


Sony Pictures has meanwhile gone one bolder, after the so-so performance of Saawariya, with a three picture deal that will put them firmly on the Bollywood map, as well as buying world-wide distribution rights to Hindi comedy Meerabai Not Out. According to Variety:

Uday Singh, Sony Pictures India topper added, "Sony has several established platforms in India -- TV, theatrical distribution, music and homevideos. We intend to put all these behind the film and make it one of this summer's biggest attractions."

Amongst other ventures, Sony Television India is currently screening the newly created IPL (Indian Premiere League) cricket matches that has viewers glued to their sets and advertising rupees pouring into the channel's coffers. In relation to the co-production deal, Times of India adds that:

Sony's investment sets a new benchmark for big budget movie making in India. In its deal with PNC, the first of the three movies will be a comic extravaganza set in Las Vegas. Titled Raghupati Raghav Raja Ram , the film is budgeted at Rs 70 crore. The two other films are in a conceptual stage. Says Pritish Nandy of PNC: ‘‘An investment by a major international studio like Sony shows the changing paradigm of Indian motion picture business.''

This comes not long after Disney went Bollywood, 20th Century Fox set up base in Nitin Desai Studios and NBC Univ bought a $150m stake in NDTV, leaving just Paramount still outside looking in. This is ironic, as the best article on Hollywood pushing into Bollywood (New York Times' Hollywood Starts Making Bollywood Films in India) quotes the aforementioned studio towards the end of the article:

“The importing of American films into India is not filling a gap,” Gareth Wigan, a vice chairman of Columbia TriStar, the Sony division that produced the film, said by telephone from Los Angeles. “You’re not bringing a dish to a bare table. You’re bringing a dish to a table where you have to move a lot of other dishes to fit in, and that’s not true in a lot of other countries.”

And so begins a strange competition to make the best Bollywood film, pitting Hollywood against India’s own studios, which make more movies and sell more tickets than any film industry in the world.

With international revenues increasingly important to the conglomerates that own the major studios, Hollywood wants to tap into India’s market. But indigenous films captured 95 percent of Indian box office sales in 2006, according to PricewaterhouseCoopers. The figure is identical for domestic pictures in the United States, but just 35 percent in France, 33 percent in Japan and 12 percent in Britain, according to 2005 data published by two scholars, David Waterman and Sang-Woo Lee.

“There is no country on the planet, other than India and the United States, that approaches that level of domestic business,” Andrew Cripps, the president of Paramount Pictures International, said by telephone from Los Angeles. And so Paramount, too, is contemplating Bollywood productions.

Still contemplating, it seems.

Meanwhile Adlabs/Reliance has conquered another territory with the announcement that it has acquired control of the third largest cinema chain in Malaysia. From THR.com's hard working India correspondent Nyay Bhushan:

Mumbai-based Adlabs Films, which runs India's largest theatrical chain along with holding interests in film production, said Monday it has acquired a majority stake in Malaysia's Lotus Five Star Cinemas.

"We cannot reveal financial details or the equity structure but, as a result of this deal, we have acquired a controlling stake in the company which runs 51 screens," Reliance Entertainment senior vp Anil Arjun said in an interview. Adlabs is part of Reliance.

Arjun added that the newly acquired screens -- which will make Adlabs the third largest chain in the country -- will continue to show a mix of market leader Hollywood product in addition to Malaysian- and Indian-language films.

Add this to the 150+ screens in India and 240+ screens in the US, plus some more South Asian territories coming up and this is starting to look like a cinema empire in the making. Some more analysis is offered by Patrick Frater in Variety:

Malaysia is one of the fastest growing theatrical markets in Asia but remains significantly underscreened. According to government agency FINAS, the country had just 341 screens in mid-2007.

Lotus mainly runs small cinemas outside the biggest cities and has itself been adding properties over the last year. In terms of screen numbers alone it ranks behind Golden Screen Cinemas and TGV, in which Hong Kong's Golden Harvest was invested until last year, and ahead of Singapore-owned Cathay Cineplexes.

Adlabs' move is not the first into Malaysia by an Indian exhibition group. Pyramid Saimira, which operates over 250 screens in India, unveiled a joint venture early last year with Malaysian company Asian Integrated Industries. Besides cinema ownership, that deal is intended to create a network of digital cinemas and provide them with distribution services.

No wonder that the parent company Reliance Big Entertainment is "in talks with private equity funds such as US-based private equity fund Kohlberg Kravis Roberts & Company (KKR), billionaire investor Carl Icahn, Japan’s Softbank and Abu Dhabi Investment Authority for divestment of 10% equity" for "an estimated asking value...in the range of $500 million," according to the Economic Times.