In the 1990s when a rookie TV producer called Anurradha Prasad started B.A.G. Films --- (some old hands in the company say the strange acronym stands for Bhagwan, Allah, God) --- skeptics sneered that it was another flight of fancy of a young girl from a well connected political family of Bihar, a state that can easily be dubbed the Wild East of the Indian political theatre.

But over a decade later, critics have been more or less silenced. B.A.G. Films is today a listed company and showing decent financial results to investors, if not exactly setting the Arabian Sea on fire. It has a media training institute up and running, is doing several shows on TV channels, including Doordarshan’s terrestrial network, and has two feature films ready for release. Add to all that are its recent forays into FM radio.

B.A.G. Films Ltd MD Anurradha Prasad

“After the initial public offer in 2003, we were in a phase of consolidation as we realised we needed to move into a different league where more established players were operating. That’s the reason why we didn’t get into new businesses,” B.A.G. Films LTD MD Anurradha Prasad told Indiantelevision.com, sitting in her plush office in the company’s swanky corporate headquarters in Noida’s Film City on the outskirts of Delhi.

There are also talks about B.A.G. turning into a broadcaster with the launch of at least one TV news channel (crime to be specific), if not two. But Prasad hushes away queries on this subject saying such reports are “purely speculative at the moment.” Rather, she counter-punches by asking, “Do people realize that starting a TV channel is not child’s play? And news channels are costly affairs.”

Such assertions notwithstanding, rumours are still doing the rounds that B.A.G. is quietly preparing to launch a TV channel relating to crime news and shows as it has gained some expertise in this field by producing crime shows for Star News.

'Red Alert' on Star News strengthened the channel's crime slot

Incidentally, two such shows, Sansani and Red Alert, might not still be figuring in the Top 50 list, but do get ratings, which Prasad points out, are “heartening and encouraging.”

After the consolidation, comes the expansion. According to B.A.G. Films vice-president (systems and planning) Amit Jain, middle of 2005 the company decided to make forays into FM radio segment, animation and creating content for mobile phones and other hand-held devises.

Value-added services like content syndication and tailoring content for various delivery platforms for different technologies is going to become a big business, Jain explains.

“At the moment, almost 90 per cent of the revenue is coming from TV programmes. But over the medium to long term, we expect each of the new segments to contribute significantly to the overall kitty,” Jain avers, pinning his hopes on the business activities taken up by B.A.G. in recent months.

However, equity fund managers are still skeptical of the media company, promoted by Prasad and her Member of Parliament husband Rajiv Shukla.

Said an equity analyst who tracks several media company stocks, “In terms of business, B.A.G. is doing well, but the programming strategy is flawed, which leaves the company with little scope to scale up operations. In media, the whole game hinges on the scalability factor.”

'Siddhanth' on Star One gave Indiantelevision a star in Pavan Malhotra

Another capital market analyst adds that B.A.G. Films might be doing almost 20 hours of programming per week for various TV channels, but it needs shows to break into the Top 20 and Top 50 list of programmes.

“As a fund manager, I’d say B.A.G. needs to build up a sizeable market capitalization and show better earnings per share, which would come only when the company’s growth is good,” the analyst adds.

For the year ending 31 March 2006, B.A.G.’s net income from sales / operations were up 16.4 per cent to Rs 423.7 million from Rs 364.1 million the previous year. Net profit after tax stood at Rs 30.5 million compared to Rs 33.8 million in the year ago period. The company said that lower net profit after tax was mainly due to significantly higher depreciation charge due to capitalization of new building at Noida. The earnings per share (EPS) was Rs 0.51 for FY’06.

Woh Hue Na Hamare on DD

Apart from launching two movies, the company’s average programming hours per month during the quarter ended 31 March 2006 were 46 for Q4 as compared to 73 in the corresponding quarter last year. Over 95 per cent of the company’s programmes continue to be commissioned. A new launch during Q4 ended March 2006 was Woh Hue Na Hamare, a half hour twice-a-week soap on DD1.

Though B.A.G.’s Jain might not entirely concur with market and equity analysts, he does admit that the company is looking for both top line and bottomline growth. “Our balance sheet is very important and more important is the fact that it should reflect growth as we have to live up to our investors’ expectations.”

B.A.G. Films Ltd was incorporated in 1993. The company has six separate business units (SBUs) which are TV software, ISOMES- International School of Media and Entertainment Studies, film production, animation, FM Radio and new media & convergence

Here is a brief lowdown on each of the segments that B.A.G. operates in.

The biggest revenue earner for the company presently, content generation naturally gets prime attention from the B.A.G management.

'Poll Koll' strengthened the political satire genre on TV

Out of the 90 per cent revenue being raked in by B.A.G.-produced shows, a bulk of it comes from the Star Group, followed by Doordarshan (DD) and regional language channel Tara, which is promoted by former director-general of DD and ex-CEO of Star India, Rathikant Basu.

On Star News alone, B.A.G. has a number of shows like Sansani, Red Alert, Poll Khol and a programme on super-natural elements, Kaun Hai. On top of this, the company also does part news gathering for Star News as part of business process outsourcing (BPO).

“Between 10-20 per cent of the revenue coming from Star News is through the news gathering BPO,” Prasad admits. Work from Star News contributed Rs 136 million or 32 per cent of the company’s overall revenue in FY06.

The company has already produced more than 5,000 hours of on-air software and has a rich footage library of more than 50,000 hours. Star Group (Star News, Star Plus, Star One), Sony Entertainment Television, Sahara Network, DD News are some of the channels that B.A.G. is associated with.

The darker side of life: Haqeeqat on Sahara One

B.A.G. has been associated with popular programmes like Poll Khol, a political satire on Star News, Kumkum- Ek Pyara Sa Bandhan soap on Star Plus, news magazines Rozana and Khabrein Bollywood Ki on DD News and multi-award winning Haqeekat on Sahara One.

“We are presently in talks with Sony Entertainment TV India for some shows, “Prasad said, adding that the company is also looking at exploiting other Indian language channels by producing or dubbing programmes in Tamil, Telugu and Bengali.

According to her, the revenues are not high in regional language television, but they are avenues of expansion and future growth.

After settling down in the media education space, ISOMES now targets an expansion

ISOMES or the International School of Media and Entertainment Studies has collaborated with the Missouri School of Journalism, USA, the oldest journalism school of the world.

ISOMES offers post-graduate diploma in broadcast journalism, TV production and direction and media management. The school also has six months diploma courses in acting and television direction & production, besides short-term courses like radio jockey, air time sales and TV editing.

According to Prasad, the media training institute is now ready for expansion.

B.A.G. is producing two films in 2006. One of the films Zindaggi Rocks stars Sushmita Sen and Shiney Ahuja. The film is scripted and directed by Tanuja Chandra and Anu Malik has composed the music.

Sushmita Sen rocks in 'Zindaggi Rocks'

The second film in Punjabi language called Mannat starring youngsters like Jimmy Sheirgill and TV star-turned –film actress Kulraj Randhawa. The film is directed by Gurbir S Grewal.

Made on modest budgets, the B.A.G.-produced films can be called small budget films if compared to the latest box-office hit Krrish (Rs 600 million) or some earlier films in recent times in Bollywood.

“We need to be watchful on the financial side as we are a stand alone company making forays into film making unlike established players who have corporatised a lot in recent times,” Jain says.

While Zindaggi Rocks cost Rs 60 million, Mannat’s budget was Rs. 17.5 million. But an aggressive marketing strategy like selling various rights judiciously makes B.A.G. hopeful that part of the cost involved in film making could be recovered before the release of the movies.

According to Prasad, “Almost 90 per cent of investment is recovered through selling rights and small budgets films can do this successfully.”

The company has plans to release five films by 2007.

B.A.G. Films has entered into a joint venture with Sieundesign Co Ltd, a leading Korean firm that has presence in production, distribution and licensing of animation films and TV series.

This initiative of B.A.G. is to tap the growing animation segment and also strengthen presence in the mobile telephony content business. The JV is proposed to be named Sieun & B.A.G. Animation Pvt. Ltd.

At present, talks are on with some American companies for creating content.

Entering the FM Radio business for B.A.G. Films was a natural stride towards forward integration, Prasad says.

With the government proposing to limit such cross holdings in different segments of broadcasting business via a legislation that is being hotly debated these days, such integration process may have to be reviewed by the company at a later stage.

The company has bagged the FM Radio licences for Haryana, Himachal Pradesh, and certain parts of Punjab, Bihar, Jharkhand, Maharashtra and Madhya Pradesh. For this purpose B.A.G. Infotainment Pvt. Ltd has been formed.

While the top management at B.A.G. is very bullish on the radio FM business, market analysts say as radio is a long gestation business activity, a lot of this enthusiasm might evaporate once operations start and a clearer picture emerges on revenues.

“The company has a long way to go in radio business, though an announced move to form a consortium with other smaller radio operators for airtime sales is a good move,” a fund manager with a Mumbai-based company says.

The world of media, entertainment, telecom, infotech and broadcasting is undergoing a change towards convergence. The benefits of technological advancement, convergence, digital broadcasting, high definition programming, streaming and compression and the challenges of an increasingly competitive market place, demand synergy and optimum utilization of resources to develop multi-purpose software for all media windows, B.A.G claims.

With an eye on tomorrow, new media initiative includes video streaming, animation and gaming, interactive content for broadband and mobi-sodes specially developed for mobile phones and handheld devices.

The company already provides voice content including news, cricket and sports, jokes, astro forecasts, celebrity interviews, Bollywood reviews and music album reviews in four languages, Hindi, English, Tamil and Malayalam.

“Value added services are becoming popular in India and content would be the greatest pusher for such initiatives,” explains Prasad on why the company is flirting with activities for which there are specialized outfits already operating.

“Presently, the revenue is not big as telecom companies take away the maximum share (80 pr cent), but over a period of time we see the content provider’s share too increasing significantly,” Jain adds.

A group of professionals are working closely to explore opportunities, which are coming through 3G.

(Rs 47 = 1US$)