We may fail to source film content through acquisitions, co‑productions
or own productions
We earn revenues by exploiting Indian film content that we produce, co-produce or
acquire from third parties, and then distribute through various distribution channels.
Our ability to successfully complete our own productions, to enter into co-productions
and to acquire content depends on our ability to maintain existing relationships,
and form new ones, with creative talent and other industry participants. In particular,
the pool of creative talent in India is limited and, as a result, there is significant
competition to secure the services of actors, directors and producers, among others.
This, in turn, can cause the cost of contracting such creative talent, and hence
the cost of film content, to increase as market participants offer higher fees to
creative talent to secure their services. We believe maintaining existing relationships
is key to enabling us to continue to secure content and to exploit such content
in the future.
We depend on our relationships with theatre operators and other
industry participants to exploit our film content
We generate revenues from the exploitation of film content in various distribution
channels through agreements with commercial theatre operators, in particular multiplex
operators, and with retailers, television operators, telecommunications companies
and others. Our failure to maintain these relationships, or to establish and capitalise
on new relationships, could harm our business or prevent our business from growing.
Delays, cost overruns, cancellation or abandonment of the completion
or release of films may have an adverse effect on our business
There are substantial financial risks relating to the production, completion and
release of feature films. Actual film costs may exceed their budgets and factors
such as labour disputes, unavailability of a star performer, equipment shortages,
disputes with production teams or adverse weather conditions may cause cost overruns
and delay or hamper completion of a production. Where a film we have contracted
to acquire from a third party experiences delays or fails to complete, we may not
recover any advance monies paid in relation to the proposed acquisition. Where we
enter into co-productions, while we typically seek to put in place contractually
capped budgets that are pre-agreed with our co-producer, given the importance of
ongoing relationships in our industry, longer-term commercial considerations may
in certain circumstances override strict contractual rights, and we may feel obliged
to fund cost over-runs where there is no contractual obligation requiring us to
do so.
Piracy of our content may adversely impact our revenues and
business
Our business is highly dependent on maintenance of intellectual property rights
in the entertainment products and services we create. Piracy of media products,
including digital and internet piracy and the sale of counterfeit consumer products,
may decrease revenue received from the exploitation of our products. Consumer awareness
of illegally accessed content and the consequences of piracy is lower in India than
it is in Western countries and the move to digital formats has facilitated high-quality
piracy in particular through the internet and cable television.