Shemaroo, one of the pioneers in the Indian entertainment industry, which specialises in distribution and content creation, is now planning to enter new businesses like theatrical distribution, audio and music distribution and also to consolidate the content business.
In the next three to five years down the line, the overall vision of the company will shift to create an integrated production and distribution entity, like a studio system by itself. It won’t be like a shooting-floor studio but there will be certain talent associated with the company, certain independent producers will be associated for content creation.
On the distribution side, there will be relationships across the physical distribution that is the home video and then the digital distribution, television and theatrical distribution and so on. Shemaroo embarked on this plan about 18 months back.
Hiren Gada, director, Shemaroo, said, “The first step towards this is to consolidate the content creation part and we want to strengthen our film and animation production. On the distribution front there are still two pieces, which we will enter – one is theatrical distribution and the second one is audio and music distribution.”
On the content front, Shemaroo needs an investment of about Rs 75 crore and on the distribution front, another Rs 75 crore. The company is planning to make an overall investment of about Rs 200 crore including all the infrastructure development in the next 12-18 months. Currently, total revenues in 2007-2008 is about Rs 140 crore and distribution of films on television garners maximum revenue. It contributes upwards of 50% to the total revenue of Shemaroo. Gada said, “Content has always been our core business. The change that will happen in the content business is that our own content – film and animation – would roughly make up for 35-40% our total turnover. The rest 60-65% of the business would be coming in from the acquired content. This is the trend that we are working towards.”
“We have been talking to investment bankers, the suggested debt-equity mix is also one option, and we would also look at an option of private equity or IPO. The preference is with the former. We already have ICICI Securities on board and they are guiding us in raising this money,” added Gada.