She built India’s most successful television production company, but failed to prepare it for bad times. And then, she gave the tale a twist
There is no teeka on Ekta Kapoor’s forehead. There are traces of orange where the sacred streak used to be. It is surprising to see the once reigning queen of Indian television without her spiritual trademark.
But that’s only the superficial part of the transformation she and her company are going through. There had been a mercurial phase in Ekta Kapoor’s career, when she whipped Balaji Telefilms into a production frenzy of TV soaps and made families adjust their evening schedules to her show timings. At one point, she made 38 of the top 50 shows across Indian channels. Her infamous tantrums and unpredictable style of working were just a small price that her colleagues and business partners paid to partake in her success.
And then came the unravelling. The success was followed by the inevitable spending excesses and Kapoor perhaps came to believe in the eternity of her appeal. She failed to notice audience tastes were changing away from her over-the-top, heart-wrenching family dramas replete with the dutiful daughter-in-law, the vixen, the philandering husband and the mother-in-law with a heart of gold/coal.
As if all this was not enough, Ekta Kapoor sued her sole customer, Star Plus, for taking her marquee show Kyunki Saas Bhi Kabhi Bahu Thi (Because the Mother-in-Law Was Once a Daughter-in-Law Herself) off air. The timing couldn’t have been worse because a slowdown was just then forcing channels to squeeze budgets.
More of her shows went off air. Balaji had nine Hindi shows on air in September 2008; in a few months, the number was down to four. The company announced a net loss of Rs. 14 crore for the quarter ended March 2009 from a net profit of Rs. 24 crore in the same quarter the previous year.
In a span of a few months, her lucrative, exclusive contract with Star Plus broke. She won a similar deal with 9X channel, founded by former Star head honcho Peter Mukherjea, but the channel itself was a flop. And then came a month-long TV industry strike in November 2008. Suddenly she faced the risk of losing everything she had worked so hard to build.
Many stock analysts began to write her off as a one-time wonder who couldn’t adjust to a changing media milieu. “Sell” recommendations on the plunging shares of Balaji Telefilms became a norm. But they all ignored one factor: Ekta Kapoor’s resolve to work on her own shortcomings and her passion to rebuild Balaji into a thriving entertainment empire.
And that’s what started the third leg of her journey.
Kapoor has always been anything but ordinary. Her exaggerated forehead mark and her penchant for naming her shows with the letter K at the beginning were all part of a brand-building exercise. “I was interested in creating a brand. I realised that K, the teeka, the whole thing stood for a certain kind of television... It worked for me. The day I thought, now people are expecting a certain kind of show from me, I gave up the K.”
With the only exception of the good-luck rings on her fingers, Kapoor is letting most of her past go.
For starters, she is changing her own style. Kapoor was notorious for her temper and the tongue-lashings she gave her employees. With a lot of help from her mother, Shobha, who had founded Balaji in 1994, Kapoor has become a mostly mellower person, save for the occasional flash of temper.
Impulsive decisions, once the norm at Balaji, have given way to thought-through processes. Former employees recall how shifts would run late into the night, when a last-minute phone call from her would require them to throw away the portions shot through the day and reshoot.
Kapoor is no longer that capricious. “We’ve taken very strong calls that no last minute changes needed. If the script needs to be rechecked, then the script head, who we have now, rechecks the script after we write. No longer am I that involved with any one show that I’m making these night calls and changing everything.”
Kapoor hadn’t hesitated to break off her relationship with Star when Kyunki… was nixed and even announced that she planned to start a channel of her own. But today, she is more of a relationship builder. Not only has she patched up with Star, she has also begun working with top channels such as Colors and Zee and strengthened ties with regional channels such as Sun and Udaya.
Kapoor says she and her company are both undergoing a “metamorphosis”. She could do it alone if the changes were just in the script of her shows. But most of the fixing is to be done in the way the company is managed. She can’t do it alone. That’s why she brought in corporate finance professional Puneet Kinra to realign Balaji’s strategies and fix the operational irritants.
The Odd Pair
At first look, Kinra couldn’t be more different from Kapoor. He is the perfect foil for her creative, passionate self. This 38-year-old ex-PricewaterhouseCoopers hand is all about processes, risk management and cost control. But together, they seem to be evolving a formula to keep Balaji Telefilms a creative-focussed but soundly managed entertainment enterprise.
As soon as he joined as group CEO in October 2008, Kinra realised that a confrontational approach with channels was not in Balaji’s interest. He encouraged the Kapoors to withdraw the case against Star, which they did. But his biggest challenge was to change the mindset of each employee from being in a content factory with one buyer to a market-focussed wholesome organisation. “Suddenly you had to be a service oriented organisation from an exclusive contract-based company,” Kinra says. The first person he had to work on was, naturally, Ekta Kapoor.
It worked. For the first time in years, Kapoor went out to television channel offices, pitched shows and faced rejection. She had earlier been used to picking up the phone and fixing a show with Star. Kapoor calls this one of her biggest learnings over the last year. Even with successful pitches, there was no guarantee all shows would be runaway hits. Kapoor had to be flexible about bringing in changes. “I look at it this way that if I am bringing in business for my company, I can tomorrow grow that company so much more,” she now says.
Kapoor may not always be convinced by what mom Shobha says, but it is clear that she listens to Kinra. While her family-drama formula still works for Indian audiences, she now realises that the sprawling Marwari and Gujarati homes in her soaps can’t touch a chord with the new audience, especially in villages.
Until the middle of 2008, Balaji’s functioning was both chaotic and expensive. Balaji bought everything from paintings and furniture to airport trolleys to use for its shoots. All of this was kept in a store room and was often stolen, because the inventory was never checked. Now, everything is bar-coded and accounted for by monthly inventory checks. Big expenses like in the signature K-show weddings are mostly gone or must be explained with top ratings. To Kapoor’s genius for creating characters, Kinra has brought his disdain for anything that defies commercial sense. “As a commercial person I can’t afford to fall in love with the product,” Kinra says.
Having built Balaji Telefilms into a maker of legendary TV shows, the mother and daughter pair had come to spend lavishly on production. Per-episode cost had ballooned from Rs. 30,000 in 1996 to more than Rs. 18 lakh in 2007. With a successful public share issue and Star’s position as the most-watched channel in India, the generosity didn’t pinch then. But Kinra has put brakes on that kind of spending. The per-episode cost has now eased to Rs. 11 lakh.
Can They Pull It Off?
Only a few channel executives are ready to talk about Kapoor, that too on the condition of anonymity. They say they believe in her creative ability and are sure she would make a strong comeback. Analysts, however, are sceptical and have downgraded the stock. In particular, they don’t like the company’s plan to invest Rs. 130 crore in making films and Rs. 20 crore in new media. “The big investments in films and new media will lead to further wealth erosion,” says Anand Shah, media analyst at Mumbai brokerage Angel Securities.
Even the television business is far from fixed. Revenues earned per show, known as realisations in industry parlance, have dropped to Rs. 16 lakh for the quarter ended December 31, 2009, from Rs. 27 lakh in the same quarter last year. Shah says this is because Balaji needs more shows and films to fire.
As joint managing director, Ekta is easing into a role that is more managerial than creative. Now Kinra has to find a new creative head for television. Kinra says attracting talent is his top priority, but he will also have to arrest the drain of the talent he has. During the transformation in the last 18 months, some of the old guard have left and even some new hires have left for better opportunities.
All told, Kapoor and Kinra believe a sound content mix will see them through the change. She is now venturing into newer, saucier streams of entertainment sought after by the new generation. But it is being done through another banner, Alt Entertainment. Balaji is too well-known for traditional plots to do this under its name. Alt Entertainment’s first film will be LSD or Love Sex Dhokha by cult small-film director, Dibakar Banerjee.
Five films are already in the pipeline from the group. Kinra says films are important. While the television business gets daily cash, a successful film earns money over a longer time thanks to DVD and music sales and product merchandise, he points out. “TV business revenues is akin to living by daily wages, you produce content everyday and you earn everyday while IP-based film and new media bring in the annuity model that we require to bring in revenues over a long period of time,” Kinra says.
As the next step, the K-pair wants to develop properties for mobile or new media content. The strengths in video content should translate into strengths on mobile and Internet, Kinra says. Kapoor has launched Hoonur.com, a portal to bring together entertainment talent and employers. She has also bought the rights to a Hindi detective character to develop a television series.
It is too soon to say that Balaji has made a successful comeback but small successes are visible. One of its shows, Pavitra Rishta on Zee TV, was Indian television’s most highly watched show in the last week of January. Balaji has 10 shows on air currently. Kapoor has also bought and is creating characters that could make for interesting capers on new media.
Many say it was Ekta Kapoor’s hubris that pushed Balaji into a crisis, but over the last several months she has also showed a willingness to accept her mistakes and let professionalism take over. Her passion to build Balaji into India’s Disney will not only depend on her creativity, but also her leadership through humility.