Informed industry sources say the new business foray could well be in sync with the company’s current line of activities.
MUMBAI: Having established a strong foothold in end-to-end post-production and visual effects (VFX) services in the country, Prime Focus Ltd (PFL) is understood to be considering a business diversification.
Informed industry sources say the new business foray could well be in sync with the company’s current line of activities. “Getting into film production seems to be a logical move,” said the source.
Namit Malhotra, managing director of Prime Focus, told DNA Money, “There is a possibility of business diversification.” He, however, declined to give away further details or confirm a foray into film production.
According to the 2005 annual edition of the Ficci-PricewaterhouseCoopers report on the entertainment and media industry, the sector is poised to grow at 19% annually from
Rs 35,300 crore today to reach Rs 83,740 crore by 2010.
Filmed entertainment, pegged at Rs 6,800 crore today, is expected to grow by 18% annually to Rs 15,300 crore by 2010. This, according to industry analysts, offers a huge opportunity to the existing players and new entrants in the film production business.
Prime Focus is also expanding its network in post-production and VFX services. Having commissioned its Chennai facility in September last year, it is aggressively targeting the Tamil film industry.
It is on the verge of acquiring another post-production facility to tap the Telugu film industry. “We are in an advanced stage of negotiations with a Hyderabad-based firm for acquiring their post production facility,” said Malhotra.
Industry sources, however, say the company has already finalised acquisition of Spirit DI, the post-production arm of Suresh Productions Pvt Ltd.
While the exact value of this acquisition is not known, sources said it would be through a combination of cash and stock.
“The Telugu film industry has a significant number of movies involving VFX and digital intermediate (DI). The new facilities will be aimed at providing quality post-production services there,” Malhotra said.
On an average, Indian film producers allocate 4-5% of the overall cost of film production to VFX and DI. The extent of allocation, however, is more than 5-6 times overseas.
“This trend is set to change, given that digital technology has already started to make a substantial impact on the quality of film production in the country. As more and more movies get produced on the digital platform, which is already happening, demand and allocation for such specialised digital post-production services will increase substantially. In such a market scenario, reaching out to the market by getting closer to them is a well-thought-of strategy,” said the analyst.
Prime Focus embarked on a major overseas expansion drive last year with acquisitions in Europe and setting up of a facility in the Middle East. It acquired majority stake in the £20-million media service firm VTR Group, followed by acquisition of Clear Post Production Ltd in the UK. Another acquisition, planned earlier, has been put on hold for now.
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