The Hindu : Business : Saregama to ramp up home video business

Online edition of India's National Newspaper
Friday, Dec 24, 2004

Business

Business

Saregama to ramp up home video business

By Our Special Correspondent

KOLKATA, DEC. 23. Saregama India Ltd. (SIL), the entertainment company of the RPG-group, will introduce Tamil and Hindi versions of English movies in two months.

Sanjiv Goenka, Vice-Chairman, said at a press meet that this was being done as part of the company's plans to rev up the home video business, so as to increase its contribution to the turnover from the present 16 per cent to 20 per cent. "Our focus is to strengthen this segment by acquiring licensing rights from additional studios,'' Mr. Goenka said. SIL already has tie ups with Warner, BBC, Miramax, Paramount and Universal Studios.

He said that films would contribute 20 per cent of the turnover and while its maiden production did not make any money, the company had not lost heavily as it was a low budget movie.

Four Hindi and Bengali movies were on the anvil and the budget would range from Rs. 22 lakhs to Rs. 9 crores. This is the RPG group's second foray into movie production.

Mr. Goenka said that this was part of the strategy to grow in different revenue lines while de-risking the existing revenue model.

Mr. Goenka said the company was planning to launch within this fiscal a Rs. 24-crore rights issue in the ratio of 4:7 at a a premium of Rs. 35 on a face value of Rs. 10. The funds would be utilised to retire the company's small debt and finance its new initiatives.

Even as it scripts a turnaround after three years of loss making, SIL, has consolidated its existing movie business by recasting its policy of spending hefty sums on acquisition of new Hindi film music rights. It reported a Rs. 2.10-crore net profit in the first half and is hopeful of sustaining the trend till year-end.

The company was also in talks with "all carriers'' to gain broadband access to encash on the emerging market for digital download of music. SIL had already digitalised its catalogue, Mr. Goenka said.

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