Mktg - Big Idea

When one has a name like that, one can’t afford to think small. Not that we can fault the Reliance-Anil Dhirubhai Ambani Group (R-ADAG) for skimping on the plot or on the investment support. Two years ago, when R-ADAG unveiled its corporate identity, it reportedly spent a whopping Rs 40 crore to set the ball rolling. Today, as the group prepares to consolidate its entertainment businesses under the Reliance Entertainment vertical, it has more than doubled its budget to Rs 100 crore.
Of course, the spend befits the plan. And more than matches up to the combined might of competition in the Rs 513-billion entertainment and media market in India (PricewaterhouseCoopers estimate for 2007).
Reliance Entertainment—whose core focus, according to the group website, “is to build significant presence for Reliance in the entertainment eco-system, across content and distribution platforms—currently has nine lines of businesses. It includes Adlabs, Big 92.7 FM, Zapak, Big Flicks, Bigadda, Big Motion Pictures, Big Animation, Jump Games and Big Music & Home Entertainment. The company is expected to launch its bouquet of 20 channels under the Big Broadcasting umbrella.
It’s a mammoth task, to say the least, to try and bring all the different lines of businesses under one umbrella; but here’s how the restructuring and rebranding programme is likely to roll out over the next few months. While FE was unable to reach senior executives at Reliance Entertainment for comments, we’ve put together the plan based on valuable inputs from agency sources, current and ex-employees of the various Reliance group companies.
To begin with, all the business verticals under the Reliance Entertainment umbrella will be christened and aligned with the brand name Big, followed by the name of the business. Industry sources say that even the name of the group holding company, Reliance Entertainment, may be relegated to history. “There’s a chance that the name of the holding company may change to Reliance Big Entertainment,” says a marketing executive with a rival company who didn’t want to be identified in the story.
Sources within the group indicate that Adlabs Films, which the group acquired in 2005, will be merged with Big Motion Pictures, which will have two divisions—the exhibitor Adlabs, which will be rechristened to Big Cinemas, and the film production unit, Big Motion Pictures. By the end of first quarter of 2008, that is, June 30, the cinema division grew by 184%, contributing Rs 78 crore to the group’s revenues. (Currently, R-ADAG has a market cap of nearly Rs 1,00,000 crore, group assets in excess of Rs 31,500 crore and a net worth of Rs 27,000 crore.)
The film processing and services division also recorded a 45% increase to Rs 30 crore.
The film production and distribution division logged a revenue growth of 372% to Rs 53 crore. Adlabs currently has a market capitalisation of over Rs 2,400 crore.
Adlabs Films had a huge presence in film processing, production, exhibition and digital cinema when the group acquired it. The key content initiative of this division is across movies, music, sports, gaming, internet and mobile portals, leading to direct opportunities in delivery across the emerging digital distribution platforms including digital cinema, IPTV, direct-to-home (DTH) and mobile TV. The group has chalked out a pan-India expansion plan for the exhibition business that includes widening its presence to at least 90 cities and entering new markets overseas, including Nepal.
It is easy to see why the group is betting its shirt on this particular vertical. Adlabs announced a 217% growth in its consolidated revenue to Rs 254 crore by the end of first (June) quarter of 2008. Synergy Adlabs, the company’s television content production business, posted a major revenue increase, as much as 727%, to contribute Rs 17 crore in the first quarter of 2008.
While the FM business in the country is yet to get over its teething troubles, R-ADAG is looking at the sector with keen interest. The FM radio business under the BIG 92.7 FM is working on a footprint spanning 45 cities, 1,000 towns and 50,000 villages. It is expected to reach 200 million people across the length and breadth of the country. The aim is to create a network that is innovative and contemporary, yet retains the essential element of ‘Indian-ness’ in its content. For the record, the radio business contributed Rs 51 crore (to Adlabs) in the first quarter of 2008.
The group’s home entertainment business is also part of a massive expansion plan. Bigflicks.com, which provides movie on rental besides a movie download facility both in India and abroad, will bolster its internet-based service with a pan-India chain of DVD stores. The service is subscription-based.
Staying with home entertainment, Big Music & Home Entertainment, which launched its first product, Kireedam, in June 2007, has made rapid strides in the Hindi and south Indian film industries with successful musical launches, such as Cash, Johnny Gaddaar, Dhamaal and Happy Days. It is pinning its hopes on the digital platform—internet, mobile and radio networks—in addition to traditional physical formats to stay one up. It will also foray into events and live entertainment.
Besides these, Reliance Entertainment might seal its much talked-about $1-billion deal with Steven Spielberg’s DreamWorks production company sooner than later. The move would enable Spielberg to exit from the Paramount Studio umbrella. According to international news reports, R-ADAG would invest $500 million in DreamWorks’ new productions and another $500 million in debt through JP Morgan Chase. Earlier this year, during Cannes Film Festival, R-ADAG announced that it would bankroll eight production companies owned by Nicolas Cage, George Clooney and others.
R-ADAG’s Bigadda.com, a social networking platform for web and mobile, and Big Animation, which was formed when Reliance Entertainment bought the Pune-based animation studio AniRights Infomedia in 2007, are working hard to force ahead in their respective fields.
So will the DTH television service, which R-ADAG entered recently with Big TV DTH. The point to remember is, Big TV DTH is a wholly-owned subsidiary of Reliance Communications and not part of Reliance Entertainment despite the obvious synergies. The company has unveiled its advertising campaign across various media platforms.
Interestingly, both in the print and outdoor ads, the body copy does not use the word Reliance ADAG in big bold font as one would have expected. Instead it is mentioned at the bottom of the ads against a thin blue strip. Jagdish Acharya, executive creative director, Mudra DDB, the advertising agency that has worked on this campaign, clarifies, “The brief that we received from the company spoke about how Big DTH would redefine entertainment. The campaign was mandated to reflect this philosophy.”
Anmol Dar, CEO, Superbrand, feels, “There’s a certain equity linked to the name Reliance. I do not know if they will abandon that equity and strike off again from the scratch. It sounds strange to me.”
So why isn’t the brand Reliance highlighted in the new ads? Acharya says, “This is now going to be the fixed format for all the entertainment businesses. There are certain guidelines that we have been given about the logo, colour scheme and the manner in which Reliance ADAG will endorse its entertainment brands.” Acharya points out that the format and the use of the Big logo will be consistent across all the businesses, though the name of a particular business will have a separate font and graphic style.
Farokh Balsara, head of media and entertainment at Ernst & Young in India, and partner with the Risk & Business Solutions Practice, says that it would be unfair to compare Reliance Entertainment with any of the other business verticals of Reliance ADAG. “Currently, Reliance Entertainment doesn’t have a strong brand positioning in the market and they need to create one consistent brand image. It is good to show strength with one single brand and that is what they are trying to do.”
A senior advertising professional has a different take. “Reliance as a group comes with its own baggage and hasn’t been in the media lately for all the right reasons. Perhaps, it doesn’t want the target audience’s perception of the new business to be coloured by anything else,” she says. One vertical that may not sport the Big prefix is Zapak, the gaming portal, which has build a considerable equity among its target audience over the past three years. Zapak acquired more than one million registered users in the first four months of its launch; the current registered user base exceeds three million, according to the group website. The company has moved to a free-to-play model and is building a pan-India gaming infrastructure with the launch of state-of-the-art gameplexes and massively multiplayer online games.
The company also has a strong merchandise business through co-branding association with Bollywood films like Bhootnath, Love Story 2050, Rock On and some others. It is estimated that 25% of the Zapak’s revenue is contributed by the merchandise business.
It is also unlikely that the name Jump Games, a publisher and developer of mobile games, would change much as it doesn’t directly deal with end consumer and audiences. That doesn’t mean it will go slow on the expansion part. It is aggressively looking to acquire top mobile content licenses and brands for distribution on its mobile worldwide network. The deal will provide Reliance an opportunity to exploit its expertise in the US telecom market and get exposure to a segment of the cell phone industry that is geared for high growth.
Jump Games is already top of mind with its innovative gaming content endorsed by some of the best global brands. Its Bappi Da Disco King won the Best Mobile Game Award (India) in 2007. Distributed across the US, Europe, South Africa, Australia, the Middle East and Asia, Jump’s games can be played on leading networks in over 40 countries.
Of course, the rebranding exercise cannot be achieved overnight. The group has hired an international branding consultant to design the logo for the umbrella brand Big logo. “The advertising and branding cost for each new launch would be to the tune of Rs 35-40 crore,” says an official working closely on the roll-out plan.