In Conversation with Manish Dutt Managing Director V R Films and Studios Limited
The Challenging Times Are Over And We Can Visualise An Upward Growth Trajectory Only
What is your outlook on the Indian media and entertainment sector, particularly the burgeoning OTT video service space? What emerging trends have you witnessed among consumers post-pandemic?
The Indian media and entertainment (ME) industry is a sunrise sector for the economy and is making significant strides. Proving its resilience to the world, the Indian ME industry is on the cusp of a strong phase of growth, backed by rising consumer demand and improving advertising revenue. According to a FICCI-EY report, the advertising to GDP ratio is expected to reach 0.4 per cent by 2025 from 0.38 per cent in 2019. Over 28 million Indians, up from 10.5 million in 2019, paid for 53 million OTT subscriptions in 2020, leading to a 49 per cent growth in digital subscription revenues. The growth was led largely by Disney+Hotstar which put the IPL behind a pay wall during the year, increased content investments by Netflix and Amazon Prime Video and launch of several regional language products.
In addition, 284 million Indians consumed content which came bundled with their data plans. According to an EY report, the Indian media and entertainment sector stood at ₹ 1.38 trillion (USD 18 billion) in 2020 and is estimated at ₹ 1.79 trillion (USD 24 billion) in 2021. Further, it is projected to grow to ₹ 2.23 trillion (USD 29 billion) by 2023 due to acceleration of digital adoption among users across geographies. The market is projected to increase at a CAGR of 17 per cent between 2020 and 2023. In FY20, digital and online added revenue stood at ₹ 26 billion in the ME sector and their contribution to the sector increased to 23 per cent in 2020 from 16 per cent in 2019.
India’s subscription revenue is projected to reach ₹ 940 billion (USD 13.34 billion) in 2023, from ₹ 631 billion (USD 8.95 billion) in 2020. Regional content has grown by 60 per cent with Hindi and Tamil languages driving the growth followed by Gujarati, Punjabi, etc. Keeping the above growth pattern you can gauge the size the localisation industry would leap to in the next 3-5 years. Maximum content provided is expected to be localised in various Indian languages to acquire maximum reach. Localisation alone can be expected to jump from approximately ₹ 100 crore to ₹ 350-400 crore or more. In the last two years, audience preference has shifted from theatres and TV to the OTT platforms.
They are spoilt for choice and find it very convenient and refreshing to view content at their convenience in the confines and comfort of their home. Theatres had limited content, time restrictions and economics had made it difficult for them to experiment consumer preferences. Though theatres will continue to exist, only features with larger than life viewing experience will pull in the audience. The rest will prefer to watch content on the OTT platforms. I don’t see any reversal in this preference in the near future. Definitely OTT is here to stay and will play a major role in the distribution and revenue model of entertainment.
Over the last two years several key OTT players have started furnishing mainstream content in local languages which has gained immense popularity, thereby widening the target audience. How is V R Films and Studios uniquely positioned to deliver the best quality in dubbing? Currently, who are your major clients in this segment?
We did presume a boom in the localisation business much earlier. There has been a surging demand for content localised in Hindi, Tamil, Telugu, Malayalam, Kannada and other local languages. The pandemic outbreak during the last quarter of FY 2019–FY 2020 helped in the growth as well. We sensed a great opportunity during this period as the content supply was affected. We try to be ahead of the curve. We had digitised all our studios much in advance and created large digital storage facilities, thus digitising all our content and storing it in-house. We had ventured into remote dubbing solutions by associating with our international partners.
During the lockdown, while all businesses were at standstill, we at V R Films and Studios, with remote dubbing solutions and work from home options, managed to successfully service clients like Netflix, MX Player, Discovery, etc. with Hindi, Tamil and Telugu localised content. This was a path-breaking moment for us. During the first lockdown phase we managed to deliver 150–200 hrs of content every month. Moreover, our library of 75 titles in localised language was licensed to MX Player during the lockdown to service their need. All this was achieved from the confines of our homes. In the last six months we have constructed additional 10 dubbing and mixing facilities in Mumbai, all under one roof.
Our Mumbai facility is now updated with two Dolby Atmos, six Dolby 5.1 mix studios, 11 stereo mix and dubbing rooms. Our combined studio strength across India is now 75 studios with a centralised mixing facility in Mumbai. This is the largest facility in India with output capacity to deliver approximately 1,000 hours a month. We see a massive surge in demand for localised content. The facilities have been upgraded to service our regular clients like Netflix, MX Player, Discovery, Sony and Paramount Pictures. VROTT, our in-house OTT platform, will be servicing approximately 300-400 hours from these facilities additionally.
Can you shed some light on your recently launched OTT platform, VROTT? What measures have been taken for content acquisition and localisation over the last two quarters? What is your vision for the platform over the next 2-3 years?
VROTT was launched in India on January 29. Our ‘Talk in India’ initiative gets a start with VROTT, an Indian OTT platform which makes the world speak its local language. VROTT will premiere exclusive global content dubbed in local languages like Hindi, Tamil and Telugu. With regional internet penetration growing at over 50 per cent, localisation of content and OTT apps are going to play a key role in maximising content investments. All eyes will be on regional content to capture the next 100 million SVOD subscribers VROTT will focus to capture the emerging interior B and C markets by adding Malayalam, Kannada, Bangla, Marathi, Gujarati and Punjabi languages as well.
VROTT, a first for Indian content-loving audiences, will comprise:
• Exclusive global 2,000+ hours’ premieres not available on any other platform in India.
• Exclusive global content dubbed in local languages like Hindi, Tamil, Telugu along with original language, all with English subtitles.
• Genres range from action, drama, crime, thrillers, suspense and horror across both movies and web series.
• Localised content from countries like the UK, Hungary, Spain, Germany, France, Italy, Denmark, Sweden, Norway, Finland, The Baltic, Far East, Turkey, Korea, Russia, Australia, and many more.
• Seamless watching experience online and offline.
• Smart subscription plans with easy affordability.
VROTT app is now available for download on Play Store and Apple Store. It will soon be available on Android TV, Fire Stick and other platforms. In the last two quarters we have acquired and localised more than 2,500 hours of content never seen before in India on any platform. This is a huge achievement. No other platform has been launched with so much premium content. The acquisition process is on for the next financial year as well. We aim to achieve 10+ million downloads in the first 6-12 months with approximately 150-250 thousand subscribers. In the next 2-3 years we have a target of approximately 20-30+ million subscribers with 150 million downloads. No other OTT platform has the infrastructure that we have created in terms of localisation and acquisition of content. This combined with our marketing strategies will help us in terms of growth and reach in the next 2-3 years. VROTT is here to stay.
Can you highlight the milestones which were achieved by your company in FY21 and H1FY22?
FY21 has been a year full of achievements:
• We confirmed long-term association with Netflix, MX Player, Peo TV Sri Lanka and renewed our agreement with Discovery for localisation services.
• We also confirmed our association with Amazon and MX Player to premiere our new features and library titles for OTT rights.
• We were the only dubbing facility in India working and providing service during the pandemic to Netflix and MX Player with our remote dubbing solutions.
• We managed to earn more revenue in 2021 than in 2020 in spite the lockdown and the pandemic.
• In FY22 we have developed and inaugurated 10 more state-of-the-art dubbing and mixing facilities and tied up with trusted network partners across India to increase dubbing service outputs.
• With the launch of VROTT – Global ka Local, we have taken V R Films and Studios into the consumer market space.
These are huge milestones achieved by V R Films and Studios, especially in these challenging pandemic times. We are confident that with the growing economy, the company will soon be a leader in this space.
What are your key growth levers?
With the burgeoning OTT growth space and the consumption taste preferred by the consumers, there is a huge appetite for content and localisation. All content in Hollywood, Indian cinema and world cinema is waiting to be exposed in localised languages to the consumers. OTT is a monster with a 24 x 7 appetite. With 60 per cent of Indian audience being youth in the age group of 22-35 years, their consumption taste is on platforms like mobile, laptop, I-pads and Smart TV. With growing economy the spending power of the youth is massive. The audience now has a refined taste for world cinema in regional languages – the language they are comfortable in. Language is no longer a barrier. People want a variety in good cinema and other content. This has been proved through the success of content like ‘Pushpa’ (Telugu dubbed in Hindi, Tamil, Malayalam, Kannada), ‘Sooryavanshi’ (Hindi to Tamil, Telugu, Malayalam, Kannada), ‘Squid Game’ (Korean to English, Hindi, Tamil, Telugu), etc.
What are your top three strategic priorities?
• At the moment our priorities are focused on:
• Increasing our dubbing output to 1,000 hours or more per month by increasing our client base with best affordable rates, superior quality and timely deliveries.
• Multiple increase in top-line and bottom-line by making VROTT reach as many subscribers as possible with target marketing, strategic integrations with existing big OTT players and telecom companies.
• Migration to NSE and BSE main exchanges and creating wealth for our investors.