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Balaji Telefilms: The road ahead
Aug 10, 2009

Balaji Telefilms enjoyed a sustained run as the leader in the television content industry for many years. Recently however, the company has suffered due to structural changes in the industry. In this article, we shall take a look at the road ahead mapped out by Balaji Telefilms in the company’s latest annual report.

What went wrong?
The following factors have gone against the company recently:
  • Old warhorses retire: Trademark shows such as Kyunki Saas Bhi Kabhi BahuThi and Kahani Ghar Ghar Kii went off air. It may be noted that old serials are profitable because the development cost is recovered and the contribution (revenue-variable costs) received helps the bottomline.

  • New offerings did not take off: Balaji Telefilms launched an ambitious project - Mahabharat. It was expected to run for at least three consecutive years and hence expensive sets were installed for the same. However, the serial went off air. Balaji was forced to write-off the entire expenditure of Rs 95 m because the set was tailor made for a ‘period’ drama and could not have been utilised for any other serials. Additionally, debts of Rs 182 m from the broadcaster 9X were written off because recovery was considered doubtful.

  • Losses in investment: Balaji Telefilms generally invests its surplus funds in debt funds. However, a small percentage of funds invested in equity funds led to a diminution in value of Rs 44 m due to the stock market meltdown.

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