SYMBIOSIS INSTITUTE OF MANAGEMENT STUDIES

Principles and Practices of Management

Research Paper: Family Owned Business Houses

Balaji Telefilms Private Limited

Presented To:Prof. Mala Sane

Date of Submission:21st July 2010

Presented By:Ashna SrivastavaRoll No 11Section APRN No 10020441011

BALAJI TELEFILMS

INTRODUCTIONUndoubtedly the singular greatest success story of Indian Television. A small production house changes the entire face of television and goes on to become the leader of our nations media. Balaji Telefilms started as a small production team for a television show called, “Hum Paanch” that was telecast on Zee TV in 1994. This was at the time when Balaji Telefilms was actually run by actor Jitendra and his wife Shobha Kapoor. The production house became what it is today after 2001 when the family’s daughter became the Creative Head of Balaji telefilms. The production house reached new levels of success under the leadership of Ekta Kapoor.

Balaji Telefilms was incorporated in 1994 and has redefined the Indian television space in this period. Making a strong start with hit shows like “Hum Paanch”, the company rose to unprecedented heights in the late 1990s and 2000s. The satellite boom in India can in a sense be said to have been created and led by Balaji. The performance of the Hindi television channels and the dominance of the Hindi General Entertainment Channel was pioneered by Balaji content and run successfully for over a decade, with blockbuster shows like “Kyunki Saas Bhi Kabhi Bahu Thi” and “Kahaani Ghar Ghar Ki” garnering unheard of TRPs. The company has produced over 15,000 hours of television content since its inception, including content in Hindi, Tamil, Telegu, Kannada and Malayalam. Balaji also entered the motion picture business in the late 1990s, producing and distributing a number of films. Today, the company occupies a dominant space in the television content creation space, with the No.1 show on Indian television to its credit and all of its shows among the Top 50 on television. Balaji has also diversified itself into all the 4 screens by bringing in new teams for the motion pictures, internet and mobile space. The company has also evolved with the times and significantly corporatized itself, bringing in a Group CEO and experienced professional team for driving the future strategic direction of the company.

From a television content provider, they have evolved into a media conglomerate with organizational divisions responsible for television, motion pictures, internet and mobile.

EKTA KAPOOREkta Jeetendra Kapoor is an Indian TV and film producer. She is the creative head and Joint Managing Director of Balaji Telefilms, her production company. She is the daughter of Hindi film actors Jeetendra and Shobha Kapoor. Her younger brother Tusshar Kapoor is also a Bollywood actor.

Ekta Kapoor has produced and co-produced numerous soap opera, television series and movies. Her most famous television ventures have been Kyunki Saas Bhi Kabhi Bahu Thi, Kahaani Ghar Ghar Kii, Kasautii Zindagii Kay,Kahiin To Hoga and Kkavyanjali which started airing on STAR Plus. Since then, the shows have continuously been among the top rated programs on Indian television and generally being shown on Star Plus (a television channel in India). Today, Most of her creations begin with the letter "k" due to her superstition that it brings her good luck and fantastic reputation but most recently she has decided to take away from "K" and has started some soap operas with different letters as she did earlier in her career. Some of her other popular creations are Kis Desh Mein Hai Meraa Dil, Kitani Mohabbat Hai Kya dil mein hai, Kahe na Kahe, Kasamh Se, Pavitra Rishta, Bandini and Pyaar Ka Bandhan. She has also done a lot of shows like "Kaun Jeetega bollywood ka ticket" and thers on starplus. She has also produced five Bollywood movies out

of which Kyaa Kool Hai Hum starred by brother Tusshar Kapoor. After Kyaa Kool Hai Hum, she also co-produced Shootout at Lokhandwala with White Feather Films, Mission Istanbul.

Ekta Kapoor has produced several TV serials, most of which continue to air on her first network STAR Plus but now only two of her serials still air on it. While some of her other productions air on Sony Entertainment Television, Zee TV and the new television channels 9X, NDTV Imagine and Colors TV. Balaji telefilms has also produced the movie Love, Sex aur Dhoka which released in March, 2010. She has also been parodied in movies such as Money Hai To Honey Hai.

JEETENDRAJeetendra (born 7 April 1943) is a popular Indian actor.Early lifeJeetendra was born Ravi Kapoor in Amritsar, Punjab in 1943 to Amarnath and Krishna Kapoor.[1] His family were Punjabi. Ravi Kapoor was born in a business family that dealt with imitation jewellery. While supplying jewellery to V. Shantaram, he was cast as Sandhya's double in the 1959 movie "Navrang”

CareerHe started in Bollywood in the late 1950s when filmmaker V. Shantaram gave him a chance as actress Sandhya's double in Navrang (1959), but got his first big break when Shantaram cast him as hero in Sehra in 1963 & then in Geet Gaya Pattharon Ne (1964). Since then, he has appeared in almost 200 films. Jeetendra came into the spotlight in 1967 with Ravikant Nagaich's Farz, which went on to become a golden jubilee success. The tee shirt and white shoes he

picked up from a retail store for the "Mast Baharon Ka Main Aashiq" number in Farz (sung by legendary Singer Mohd Rafi) became his trademark. His vigorous dancing in films like Farz, and Banphool won him the epithet of the Jumping Jackflash.

In the 1980s, Jitendra was frequently paired up with Sridevi or Jayapradha for remakes of South Indian potboilers courtesy of Rama Rao Tatineni, K. Bapayya and K. Raghavendra Rao; some of these films were produced by Padmalaya Productions. Featuring elaborate sequences with colorful clay pots, dozens of extras, electronic music by Bappi Lahiri, and lyrics by Indeewar, movies like Justice Chaudhry (1982), Mawaali (1983), Himmatwala (1983), Jaani Dushman, and Tohfa (1984) were huge hits despite low critical acclaim.

He recently made an appearance in a popular TV serial Kyunki Saas Bhi Kabhi Bahu Thi as an old man. He was a judge of Jhalak Dikhla Jaa, an Indian dance competition on Sony Entertainment Television.

Personal life

Born in Amritsar Punjab, India. There he was friends with Rajesh Khanna who was also born in Amritsar. Their mothers attended Kirtan at same place. Jeetendra spent his childhood in Girgaum, Mumbai. He used to live in Ramachandra Building in a middle class locality. He still cherishes his memories there and visits the place during Ganapati festival every year. In her authorized biography,Hema Malini claimed that they almost got married, but she backed out. He then married his childhood sweetheart Shobha Kapoor, and has a son who is also an actor, Tusshar Kapoor and a daughter, Ekta Kapoor, who runs Balaji Telefilms. They producee popular TV serials in Hindi, Tamil, Kannada and Telugu. They have also produced five Bollywood films, two of which have Tusshar in the leading role. Jeetendra made a brief appearance in one of his daughter's produced films Kucch To Hai (2002) where he appeared alongside his son Tusshar.

Awards, honours and recognitions

1998 - Guest of Honour Award at the 18th Ujala Cinema Express Awards 2000 - Lifetime Achievement Award in film personalities 2002 - Filmfare Lifetime Achievement Award 2002 - Lifetime Achievement Award at the Zee Gold Bollywood Movie

Awards in New York. 2004 - "Legend of Indian Cinema" Award at Atlantic City (United States).

2005 - Star Screen Lifetime Achievement Award 2007 - Dadasaheb Phalke Academy Award 2008 - Sansui Television Lifetime Achievement Award

SHOBHA KAPOOR MANAGING DIRECTOR:

Mrs. Kapoor has been instrumental in building the company from its small beginnings in 1994 to India's largest television content company today. From its inception, Mrs. Kapoor has been hands-on in the operational management of the company, controlling on set activity, operational efficiency. Given her wealth of experience, today, she works closely with the Group CEO in helping him discharge his responsibilities. Her stellar work in creating the Balaji organization and brand has resulted in a slew of awards, including CEO of the Year (Indian Telly Awards), Businesswoman of the Year (The Economic Times), and numerous Best Producer awards for television shows produced by Balaji.

TUSSHAR KAPOORTusshar Kapoor born 20 November 1976 in Mumbai, Maharashtra, India) is an Indian actor. He is the son of Bollywood actor Jeetendra andShobha Kapoor and brother of Ekta Kapoor. He studied at the University of Michigan and graduated with a BBA from the Stephen M. Ross School of

Business which is consistently ranked as one of the top business schools in the world.

Tushar made his debut with Mujhe Kucch Kehna Hai with heroine Kareena Kapoor in 2001. The next two years followed with a list of box office flops, although he was noted for acting alongside his father in the teen slasher film Kucch To Hai (2003). He was recognized for his role as a shy boy who gains the ability to become invisible in Gayab (2004).

He appeared in Khakee (2004) in which he starred with Amitabh Bachchan. He performed in Shart opposite Gracy Singh and Amrita Arora. It's a triangular romantic film. Then Ram Gopal Verma's Gaayab opposite Antara Mali. Its a science fiction film. His few more films are their which are again Balaji Productionand will be shortly directed by Satish Kaushik and Raj Kumar Santoshi.

SHORT OVERVIEW OF THE COMPANY DEPARTMENT HEADS

Akshay Chudasama:Widely respected in industry circles for his deep insight into corporate law, Mr. Chudasama is a partner at J Sagar Associates. He specialises in mergers and acquisitions, consumer protection and dispute resolution.

Dhruv Kaji:A highly respected Chartered Accountant with experience spanning over two decades, Mr. Kaji is a financial advisor and strategic consultant. He was associated with Raymond Ltd, and Pinesworth Holding Ltd.

Pradeep Sarda:Chairman of the Sarda Group of Companies, Mr. Sarda possesses rich experience across multiple industry verticals, including paper, engineering, construction and real estate.

Puneet Kinra, Group Chief Executive Officer:As Group CEO, Puneet is responsible for all businesses of Balaji including Television, Motion Pictures and New Media. Having hired Puneet from PricewaterhouseCoopers (PwC) in 2008 to define & execute the growth strategy of the Group, Balaji has since hired reputed professionals, restructured existing businesses and entered new businesses in the Media and Entertainment vertical.In addition, 'Alt Entertainment' and 'Hoonur' are two more initiatives of the Company that Puneet has spearheaded in the last 2 years.At PwC, Puneet was responsible for setting up the Corporate Finance and Investment Banking practice in South India. With over 15 years of experience in finance, deal advisory, target search/evaluation, structuring and cross border transactions, Puneet has advised many corporate and private equity players on transactions in Media, Telecom, Real Estate & Infrastructure, Energy, Healthcare, Hospitality, Retail, Pharma, Communications, Technology, FMCG and Manufacturing sectors.Puneet holds an MBA from The Australian Graduate School of Management (AGSM), University of New South Wales.

Srinivasa Shenoy, Chief Financial Officer:Over the past year, Srinivasa has substantially overhauled financial controls, MIS processes, audit systems, computerisation and risk management templates in the firm to a standard comparable to global companies. He has also substantially beefed compliance processes at all levels.

Before Balaji, he was Business Head at Radio Mirchi (India's largest radio station company), heading the Delhi office. He also has extensive work experience at McDonald's and PwC. He holds a MBA from the Indian School of Business, Hyderabad and is a rank holding Chartered Accountant.

Abhijit Nath, Vice-President, Risk & Investments:Abhijit is responsible for identifying and implementing risk mitigating strategies for all material transactions of the Group. He is deeply involved in new strategic initiatives, especially in the motion picture business wherein every film transaction is analyzed and approved by him.Abhijit also works with the Group CEO on partnerships, leveraging his past experience of the private equity and strategic finance worlds.Prior to joining Balaji, Abhijit worked for RREEF, the private equity arm of Deutsche Bank, and ICICI Venture, the largest private equity firm in India, working on investments totalling over $ 300 million. He has also worked in Deutsche Bank in investment banking and global markets.

Abhijit holds a MBA from the Indian Institute of Management, Ahmedabad and has an undergraduate degree in economics from Delhi University.

INDUSTRY OVERVIEWThe Indian media and entertainment industry pegged at Rs 548 billion in 2008, exhibited a growth of 12.5% over the previous year. This significant growth in the market size is mainly witnessed due to an individual’s increasing propensity for discretionary spending. Indian production houses are operating across multiple platforms and are constantly unearthing the potential of under penetrates geographies. Consequently, today they have built scale and are attracting foreign media companies as well as investments. The market is flooded with new content delivery platforms that occupy a significant position in the distribution portfolio of players. However, in wake of the prevalent economic slowdown that began in the last quarter of 2008, the scenario has changed tremendously. The Indian media and distribution platform is compounded by the greater need for accountability and measurability demanded by advertisers today.

STRONG SUITSBefore hitting the economic slowdown hurdle, the media and entertainment industry enjoyed a reputation of the fastest growing sectors of the Indian economy. It caters to a vast customer base across the segments of television, films and now extending to mobile, internet and other delivery modes.

Diversification is the key to the growth and sustenance of any industry today. Media and entertainment is no exception. With the advent of superior technology platforms the industry is exploring new platforms. Online distribution channels, web-stores, multi and mega-plexes are various platforms to showcase and provide for sound business propositions.

In addition to these, the DTH services have opened a whole new platform for business. With the introduction of pay per view services, DTH has enabled the content providers to make an entry into the homes of the consumers. TRAI’s “must carry” regulations and control on pricing are however presently limiting the scope of this business model.

THE BALAJI ADVANTAGEDriven by an effective modus operandi, coupled with its inherent strengths, Balaji Telefilms Limited is geared for sustainable, long-term growth. The company’s experience and insight have enabled it to further hone its capabilities and give itself the coveted extra edge in the marketplace.

The following characteristic strengths have enabled Balaji to surge ahead and take an undisputable leadership position in the television area.

1. Supply Chain Management2. Compelling Content Deliverer3. Product Management4. Talent Management5. Stringent Internal Audit Procedures6. An Efficient Management Team

SWOT ANALYSIS

STRENGTHS Targeted Content Creativity as a

Disciplines Constant

Improversation Exploring new

vistas Strong

Management Skilled Talented

Pool Conducive

Environment

WEAKNESSES Lack of Scalibility Over Dependence

on Key Personnel Difficult to Sustain

Success

OPPORTUNIITES Strategic Alliances Creativity as a

Discipline Corporatization Exploring New

Genres Shift from TV to

Movies

THREATS Competition from

other Production Houses

Plummeting Share of Mass Entertainment.

Strengths

Strong creative team: The company’s serials accounted for 79% of the aggregate TRP of the weekday prime time shows featuring in the top 100 Hindi cable and satellite shows. Being the leader in the Hindi mass entertainment space, accounting for more than 40 of the top 100 programmes, some of its popular serials have been on air for years now but still dominate the TRP ratings. Balaji has also been very successful in regional programming.

Low overheads: Balaji’s budgeting discipline is responsible for a strict control of costs. The budgeting discipline has the following priorities. Each programme is appraised as a profit center and costs are compared with the budgeted target across every episode, artiste, location, and people expenses. Secondly, project life cycle management comprises of a holistic perspective of shooting schedules, scene wise artiste requirements, ongoing shooting progress and final product delivery before shooting commences. . Further, Balaji has invested in captive sets, wherein the company has in house sets, which helps in saving the hiring cost, and enhances production quality. Also, the company has reduced its dependence on vendor equipment by investing in sophisticated lights; sound recording equipment resulting in substantial cost savings. Balaji has two state of the art post production suites, which accelerates the conversion of recorded material into episodes and enhances the flexibility to review the produced content with the objective of revision and improvement.

Weaknesses

Over dependence on key personnel: Ekta Kapoor is the creative director of Balaji and is chiefly responsible for the company’s success. Although Balaji has a proper structured creative team in place, it still heavily depends on Ekta Kapoor. Balaji Telefilms evinces a lot of interest from aspiring actors

who are eager to work with it. Initially the company doesn’t have to pay high fees to these aspiring stars. However if any of their actors becomes very popular then high fees have to be paid to them. Besides this the popularity of the serial hinges on the performance of these key actors to some extent and their exit can hurt the TRP’s of the show.

Difficult to sustain success: Balaji’s programmes accounted for 79% of the aggregate TRP of the weekday prime time shows featuring in the top 100 Hindi cable and satellite shows. The tastes of the viewers are fickle and it will be very difficult for Balaji to sustain these high TRP’s leave alone improving them. Thus Balaji’s impressive track record may prove to be its bane in the future.

Lack of scalability: Production of entertainment software is not a very scalable business. The channels that Balaji services are limited in number. Besides, talented directors, technicians, artistes required for expanding operations are not easily available. Most of the other production houses produce only one or two serials at a time finding it very difficult to scale up their level of operations.

Opportunities

Growth opportunities: The penetration of television sets and cable TV is very low in India. It is expected to increase due to the rise in incomes and a decline in the prices of television. Digitalization (CAS and DTH services) will increase cable penetration from 70 m homes in 2006 to around 113 m homes by 2011. The Indian television industry had a market size of US$ 3.24 bn in 2005 and is expected to reach US$ 9.34 bn by 2010, a CAGR of 24%. Advertisement spending in India is directly linked to the growth in GDP. In view of the country’s projected GDP growth, the country’s TV advertising market is expected to grow from Rs 66 bn in 2006 to Rs 123 bn by 2011. (Source: Balaji Annual report FY 07) All these developments will increase

the broadcasters ability to spend on content, which augurs well for content providers like Balaji.

Entry of new players in the Hindi General entertainment space: The Hindi general entertainment space will get more competitive with the entry of NDTV, UTV, INX Media. The broadcasters would try to maintain or increase their market share by improving their quality of content. Thus the broadcasters expenditure on content would increase. INX media has requisitioned Balaji to produce a couple of shows for it. Balaji’s programming hours would increase as well as its realisations per hour should also continue to increase in the future.

Threats

Plummeting share of mass entertainment: Balaji has produced many successful serials in the mass entertainment genre. However, it has not been very successful in other programme genres such as comedy shows, reality shows, music contests that are getting increasingly popular and are telecast on prime time. In fact, the share of mass entertainment channels in terms of viewership and revenues is reducing (as seen from the table below). If this trend amplifies in the future, then it can adversely affect the profits of Balaji.

Share of Indian TV viewership and advertising revenues(%) 2001 2003 2005

Channnel genre Viewership

Revenues

Viewership

Revenues

Viewership

Revenues

Mass entertainment

54 59 36 47 38 41

Regional language

35 15 40 18 37 25

News channels 1 10 3 10 7 12Hindi film channels

3 5 4 5 8 6

English Entertainment

2 4 2 4 2 4

Sports 2 3 10 13 5 7Infotainmnet/Kids

2 2 3 2 2 3

Music channels 1 2 2 1 1 2Total 100 100 100 100 100 100

Source: TAM and ADEX

Competition from other production houses: Balaji is facing increased competition form other production houses such as Creative Eye Limited, UTV Software Communications Limited, Maverick Productions, White Leaf Productions. All these production houses are competing for the same prime time slots on limited number of popular Hindi channels.

MY EVALUATIONIn the times of tremendous competition it takes great courage and innovation to come up with something that changes the face of television all around. Balaji Telefilms is the greatest example of how to single-handedly change the idea of prime time entertainment is people’s mind. The greatest success story that Indian Television has ever seen, Balaji Telefilms today is at the epitome of success and shows what great management and creativity can result into.

Balaji Telefilms was incorporated in 1994 and has redefined the Indian television space in this period. Making a strong start with hit

shows like “Hum Paanch”, the company rose to unprecedented heights in the late 1990s and 2000s. The satellite boom in India can in a sense be said to have been created and led by Balaji. The performance of the Hindi television channels and the dominance of the Hindi General Entertainment Channel was pioneered by Balaji content and run successfully for over a decade, with blockbuster shows like “Kyunki Saas Bhi Kabhi Bahu Thi” and “Kahaani Ghar Ghar Ki” garnering unheard of TRPs. The company has produced over 15,000 hours of television content since its inception, including content in Hindi, Tamil, Telegu, Kannada and Malayalam.

Today, the company occupies a dominant space in the television content creation space, with the No.1 show on Indian television to its credit and all of its shows among the Top 50 on television. Balaji has also diversified itself into all the 4 screens by bringing in new teams for the motion pictures, internet and mobile space. The company has also evolved with the times and significantly corporatized itself, bringing in a Group CEO and experienced professional team for driving the future strategic direction of the company. From a television content provider, they have evolved into a media conglomerate with organizational divisions responsible for television, motion pictures, internet and mobile.

Balaji Telefilms is the greatest success story the Indian Television, India Media has ever seen.