Wednesday, January 30, 2008

Resourcefulness and Indian business

It was one of those days while I was studying. The exams were drawing close and I needed to photocopy some notes. I landed up at our friendly neighbourhood "xerox" center. It was during this visit that I observed the ingenious process of warming up his old machine. (Excerpt from previous post) The panel on the side facing the operator is removed ( it usually doesnt exist) and a lighted match is used to heat a coil on the side. Voila! the machine is warmed up before you can say photocopier. The trick they use to lower the cost of the copy is to dilute the toner (with kerosene presumably).

Also, if someone photocopies a book for the first time, he asks what the book is about and he creates a couple of copies for himself. So the next time someone comes up with a request of the same book, all he has to do is hand over a copy, bound and ready to use.

Resourcefulness is an integral character of the Indian business as much as it is a character of the Indian businessman. Of course, there is a local word for it too, jugaad.

The examples of washing machines used for creating lassi is a very famous one. Windshield wiper fluid? Use Tobacco water or use regular shampoo - the drivers will tell you. There are numerous such examples. One firm I know employed an architect to supervise the building activities of its vendor - the said architect was the employee of the firm. Needless he was able to achieve a very good cost reduction since he really knew where the wasteful expenditure could be cut.

Which is why Indian IT (or any industry including automobiles, post Nano) has to be in the Indian market. Indians are very good at cost cutting, adjusting and making do with less than ideal conditions. When Indian frugality and resourcefulness meets American perfection, there is a great opportunity. Add Japanese processes and you know why Maruti Suzuki is a winner all the way. Being in the Indian market is an education unto itself. Are you here yet?

Thursday, January 24, 2008

Swalpa Adjust maadi

The cab strike in Bangalore brought out a thought. We are good at adjusting. Indeed, if I may say it so, we are the best in the world. But the fact that we are good at adjusting has a good and bad side. On the one hand it helps us work through constraints, rules, but it also makes us try less for perfection. Confused?

Swalpa adjust maadi, or in Indian English, "Kindly adjust" is perhaps our second biggest phrase, after the ubiquitous Chalta hai. Between these two phrases, one thing really leads to the other.

The adjusting mentality ensures that nothing, almost nothing is perfect and you get used to getting everything in a less than perfect condition and you adjust. If the salt in food is a bit more, if the roads are a bit bad, if the cellphone reception is a bit below par, indeed even if the quality of anything is sub par, nobody expects to be "penalised". We are all adjusting, aren't we, in a less than perfect world one way or other?

Therein, comes the second part, chalta hai. If it works or helps you gets by then it should be fine. So, if the salt is just a bit more or if the roads are a bit bad or if the cellphone reception is a bit bad that you have to stand out on the parapet to talk, or if the quality is just a bit bad so what? Chalta hai na?. Remember, I am working under far from perfect conditions, after so many adjustments?

Its a thought that is work-in-progress, perhaps a longer post for some other time.

Wednesday, January 23, 2008

The cab strike and a few notes

The last couple of days Bangalore went through a harrowing time. Well, thats wrong. Bangalore did not, but sections of the city, the segment which depends on company transport to reach their places of work did. It has brought out the good and bad side of Bangalore only too well.

Firstly, here companies have to provide transport, otherwise employees will never be able to reach them on time. Of course, they can drive down to work, but given that it is a limited option, companies do provide transport. Public transport in this city is meaningless. You can use it occasionally, but to use it daily especially to offices located on the outskirts is quite difficult. Part of the problem is that Bangalore is a circular city, unlike Mumbai which is linear. So, here, you have people moving from any part of the city to any other part, so there are no clear distinctions between which is a high traffic route and which is a low traffic route. So, to have bus routes that caters to everybody is also out of question. More importantly BMTC makes money by sourcing its buses to companies - so, in the peak hour when the bus services ought to be the most, its buses are busy ferrying employees of companies. Now, before you point fingers at BMTC remember they too have to make money and if this helps them fund and improve services, why not? Hopefully the Metro will get built, but that is still some time away. (The Metro is being built to some arbit specification of Bangalore so ITPL, Electronic city are as far as Hyderabad or Chennai on the route.)

But amazingly, people were seen bike pooling and carpooling and even sharing rickshaws to reach their destinations. On the first day rickshaws made a killing, but on the second day instances of rickshaws asking for too much actually reduced. On the second day, traffic had reduced, perhaps because of all this vehicle sharing.

All in all, the strike has ended and now we can get back to complaining about how rash the cab drivers are and so on and so forth. But, please to be noting, they are an important aspect of work here, if it were not for the cabs and buses, work would be that much more difficult...

Tuesday, January 22, 2008

Your data or mine?

Last week, we called our gas delivery agency (Hindustan Petroleum) to ask for a refill. It was a regular thing, something we have been doing for 3 odd years now.

And he said, we lost your pincode, so can you please come and give your address proof and documents again? So, we said fine and went to the place and they tell us their "system" has "locked" some 200 user details because of which they cannot accept any order from us. So, till I provide proof that I exist, they deny my existence. I carried a delivery slip of last month and their triumphant retort - it does not have a pin code see? Ok. (And all this without a trace of an apology or anything.)

Is getting a pin code so difficult? The whole world knows what the pin codes of Bangalore suburbs are. Besides, you have delivered to us for the past 3 years.

What bull? It is your system, you lost my data without having a back up or whatever and why am I supposed to suffer? This happened some time back ICICI (another long term customer) as well and they told us that lost all my details in the Mumbai flood because of which I had to sign a "new agreement." Great. Again, you lost my data - I have no idea who will get their hands on it, but in any case, why do I, the customer have to bear the brunt of someone losing my data? If I lose any data tomorrow, the bank or the gas agency will bear no liability but why is that if they lose my data, I have to run around and get documents and provide it to them?

In all these transactions with any company the burden of proof is with hapless customers and that is because there is no law which makes it important that they take care of their data. Or that they need to ensure that they dont lose data or if they do, they need to ensure that the customer is not affected. I doubt if there is any law that prevents this from happening.

(With ICICI I ended up making a few visits and giving the documents. With the gas agency, we reached a compromise which basically meant that we have to courier details to them and they will give us a cylinder on "priority" - which has no meaning, but we will know soon.)

Monday, January 21, 2008

Oooh, IT is dead

or so croon the stock marketeers (and many others). As this edit in Mint says

The bad news is that analysts, some of whom want to be writers, and writers, many of whom want to be analysts, have continued to use the same language they have always used to analyse the numbers of IT companies

Brilliant. As far as the market goes, it has just been about meeting targets quarter on quarter. You miss a step, you lose market cap. Unfortunately, nobody has no clue about the direction that Indian IT going to take. Remember, it has already gone through a couple of torrid times and come out shining. So, SAAS has been a market in the making ever since I can remember, as has package implementation and there are a few similar items that keep appearing in reports.

But heres a question. If the US market does face a slowdown and there are a cost pressures where will the work go to? No prizes for guessing. Perhaps if there is a slowdown, IT cos might buy a company or two - how does that sound? Maybe, maybe, just maybe one of the companies might just stick their neck out and buy a product company or two (as some people want them to)? Perhaps they will use some of the innovations here to create something there? Well, truth be told, what IT companies do today is but a small piece of the entire range of work that is outsourceable. So, as the article rightly says, the future direction of IT is not a single one, it is a possible multiple directions.

Cabs strike in Bangalore

Actually most yellow board vehicles like maxicabs and trucks are on strike. Why? The govern(or)ment wants to control the speed of these vehicles using speed governors - which to me is a stupid thing to do especially since it is being done for a particular class of vehicles and applies only to Karnataka vehicles. As it is bad roads and mad traffic keep speeds low. (Curiously, AP also wants to do something similar.)

Actually speed is not the issue here. The issue is bad implementation of rules. In Karnataka you can do anything on the road and pretty much nothing will happen. People argue with traffic policemen while they break rules, and often, get away with it. Most rules are barely implemented. Signals, one way rules, parking rules almost everything is broken with impunity. Maxi cabs carry a thousand people (like this) and they are basically old chariots fitted with diesel irrigation engines on a rickety cabin framework employing kids to shout the name of the destination. (how many rules broken, go figure)

Simple solution: Get a 100 cops from Mumbai on an onsite assignment of a month or two, IT style and they will make more money than Bangalore police ever did in a year.

In a city where public transport was good or half decent, this would hardly make news. But here, the city pretty much comes to a standstill. Schools declare off, offices (employees, really) are managing somehow and the only persons who are laughing all the way to the bank are the rickshaw drivers.

A 1000 words here

see this techno devil at work here. Indian Express has offered some gaffes of this sort in the past, but this one was too good to let go by. Captured today morning!

The image has poultry workers in protective suits amongst chickens.
The caption reads, British PM Gordon Brown and wife Sarah arrive in New Delhi on a two day visit.

Eh :)

Saturday, January 19, 2008

On Shopping

You have a choice.

There are two methods of shopping. One, the antiseptic variety where you go to a lifeless faceless mall, pick up the stuff you want, run through the cashier and thats it. And the other, is well, the equivalent of riding a horse into pitched battle sword in hand fighting it out all through the way and winning your prize. What would you prefer? Most men would prefer the former, even the most battle scarred veteran. I leave it open as to what women would prefer.

The malls in India are making shopping the forgettable experience that it is with the former. Well, not exactly, but as compared to the latter experience that is. So, where can you get an experience like this. If you have a truckload of patience to try it out or even to accompany one who can try it out, try it out in some bazaar - most cities have a shopping bazaar that you can use to test your skills. I am sure there are many other bazaars and for die hard negotiators everything in the world is negotiable, vegetables and bus tickets included.

And of course, for the die hard negotiator, this is like gaming or gambling or even the share market. Go play...

Heres a primer. How to negotiate like an Indian. This is slightly dated, and only because I wanted to write a similar piece myself. And perhaps I will pretty soon...

Friday, January 18, 2008

Pilgrims progress

I have often written about pilgrims and how at most spiritual centers in India, the pilgrim is taken for a royal ride. This time, it is about Sabarimala. Easily the second richest temple in India - considering it is not open all through the year, this place is a complete mess during the "season".

Sabarimala, unlike other spiritual centers has its whole existence centered around a 41 day penance and 3 kilometre trek to the shrine. The shriet, in the middle of the Periyar Tiger Reserve has had its share of pilgrims being attacked by animals - all of which are taken as "gods will" and more recently, landslides, lathi-charges et al.

All of which is fine, but there is a fair amount of apathy when it comes to pilgrimage centers. Why should it be a pain to get darshan of a god, any god? Why does it always have to involve hours of queues and jostling and pushing and bad hygiene?

Tirupati stands out in this respect. It is a lot better than what it was and perhaps it can get better too. Some of the others just keep getting worse and worse. I heard a friend talk about Pandharpur recently and it was not good to hear.

Many of the others surely, can do a bit for the pilgrims. Perhaps, if the darshan is comfortable, they will go back feeling back better that their god is happy with them? In a country that thrives on spiritual centers, perhaps making these places easy and comfortable to visit will actually make a difference to the "happiness" of the millions who visit these shrines? What does it take to keep a temple and its surroundings clean and make it easier for pilgrims to visit? After all, the money that they put in the donation box thinking of god comes only to humans who "administer" these trusts and to the humans who run the government? Many of these are savings, hard earned money which these humans squander. So, why not provide simple decent comfort in return?

Meanwhile, the government is trying to get the name of the temple in the Guiness book of world records - perhaps it should try its luck in getting the place in shape.

Thursday, January 17, 2008

Aye auto

Bangalore is a nightmare as far as autos are concerned. Oh, add Chennai, Delhi to the list. Actually every city other than Mumbai is a nightmare as far as auto rickshaws are concerned.

In Bangalore, the minimum which is 12 for the first 1.2 or so kilometers is now set to increase to 15 or 20. Why? Because CNG will be more expensive from, 27 to 37 rupees - compare that 50 bucks a liter of petrol.

In Bombay, where rickshaws run on CNG, by and large, the minimum is 10 rupees (the distance is a little lower, but overall, it is cheaper there) and in Navi Mumbai where rickshaws run on petrol the minimum is 11 rupees.

Between the two places, petrol in Bangalore is expensive by about 2-3 rupees per liter than Bombay. Having said that, if you do the math, it is apparent why this is daylight robbery. A small car gives an average of anywhere from 12 to 15 km per liter and that translates into a running cost of about 5 rupees per kilometer (give or take a few paise depending on the cost of petrol). So if you owned a Maruti 800 which gives you about 18 odd kms to a liter of petrol your running cost is barely 4 rupees at todays rate of petrol here, about 50 bucks. And autos on an average here, charge about 6 rupees or more a kilometer when their running cost is far lower and the fuel costs are lower. Add to the odds that every now and then the rickshaw driver will fleece you or haggle with you on the change or take you on an unwanted city darshan and the "cost" of it is simply too much. And then you wonder why people take their own vehicles?

The economics of running an auto are two fold. One, in a place like Bombay where many rickshaws are run by their owners, they get the risk and the return of owning their vehicle. So, they take care of their vehicles, put in all the bling and take care good care of it. (I know that this is changing to a owner renting out to driver model) In most other places, Bangalore included, rickshaws are run mostly by a syndicate who let out their rickshaws to drivers for about 250 odd rupees a shift. During this time if something happens to the vehicle, it is the risk of the driver - not owner. Not surprisingly, they need to make this money and more or they risk losing their daily earnings. And the owner, not surprisingly, does not need to take care of his vehicle. All of which makes it a losing proposition to the end user.

So, this whole game of increasing rickshaw fares benefits who - the auto owner and nobody else. He will up his rental and get the driver to pay more who in turn has to fleece more and the customer, at the end of the day will look for a way to buy a car and get away from this whole hassle of getting into an auto. Ask any Bangalorean...

Monday, January 14, 2008

Retail notes

Over the last few months, I have been a regular shopper at Reliance Fresh. Why? More than convenience, I like their prices, their range and the fact that I wont get cheated on weight. I know that when there is a festival, they wont charge me more just because there is a festival round the corner (and they are pretty much the only ones who do that). The kiranas, vegetable vendors everybody jacks up the price because there is higher demand. (I wish the queues at their counters were better managed...)

The kiranas are nimble chaps, they know how to make a buck in the market. So, over the past few months I have observed that many of these kirana chaps buy stuff from Reliance and sell it to their customers - obviously at a higher price than what they buy at. So, obviously Reliance has a good sourcing model that is able to buy cheap, which means the consumer gets the benefit. In this case the kirana acts as a go between, and makes some more money in the bargain.

Nothing wrong with that, except that as a consumer all this opposition to organized retail and the fact that organized retail will kill kiranas is coming not from the consumer, but from vested interests, those who want to keep doing the same thing and continue to make money.

Thursday, January 10, 2008

Tata Nano

The whole unveiling of the Tata Small car has been amazing. For something that took 5 years, and had critics carping all along, this is no mean achievement. Even yesterday as I scanned the papers, the critics were having their last gasps.

One said, with European safety standards, it will never be possible.
One said, it will push up crude oil prices
Another said, there is no market for the one lakh car.
And another one said, this will open up an entry level market - after that people will buy heavier, bigger fuel guzzling cars.

There have been other attacks as well - starting from charges of congestion to safety to urban pollution. I was reminded of a quote - For everyone who is saying no, there is someone who is going ahead and doing it.

There were a few who wished Tata well - notably Anand Mahindra. Bajaj attempted to steal the show, but remember their vehicle is some 4 years away - by which time the market can well be redefined.

But whatever it is, Tata has managed to bring the focus of the world to India. What McDonalds did with its Aloo Tiki, what Nokia did with its 1100 and to a certain extent what Tata did with Indica and Mahindra with Scorpio or Bajaj with Pulsar to name just a few, has been overshadowed. India is "the" land of new paradigms.

Whoever required a car to be a tonne heavy and bulky and travel at 100 kmph? Especially when traffic in a city crawls? Why not go for a small, light car that can take you comfortably at about 40-60kmph within the city? If all vehicles moved at that speed, traffic management
would be a lot easier as would safety considerations.

Of course the city will get congested thanks to the small car, but why would it get
congested if there were good public transport options? Well, of course, the cities need
roads - good ones at that, but thats something that needs to be built. Why do roads need to
be of SUv battering quality? Why cant they be better?

Of course safety will be an issue. But tell me, is an auto safe? Is a motorcycle safe? Of course, more petrol will be consumed. But, having made a beginning with a small light car like this, technology can surely get better? Perhaps a battery driven light car is a real possibility. What if version 2.0 of the small car had an electric option? An LPG option? CNG?

The possibilities are immense, from an urban transportation perspective. It could potentially change the way we move around in cities.And perhaps get rid of all the autos as well from our streets (I mean, rickshaws will be replaced by this beauty).

Trouble is, the auto companies have been living for 100 years in their own world. A world of
their own creation. Now someone has tried to shatter it. And how. Thanks Mr. Ratan Tata for
showing the way...

Perhaps, apart from all this, the Tata small car will also have another paradigm busting fallout. From the land of elephants and tigers, to the land of elephant mahouts and tiger tamers with cellphones and laptops the world view of India could change - to the the land of the small car, the Nano...

State of two nations

as captured on Google news today.

Of course, this is a random moment, but you get the picture...

Wednesday, January 09, 2008

Cheap housing

I was reading this post at The Examined life, and it struck me that this is what is happening in Bangalore. It looks like, real estate prices are being driven by a small segment of people in the second last para of the post. (Make no mistake, small and not small are relative terms, as are cheap and expensive.)

Cheap houses in Bangalore today means, 25 lakh upwards. Expensive houses means in the range of about 80 odd lakhs and then upwards. And I agree with Ravi when he says that a solution is in the offing. (The solution is only partial, surely in Bangalore, we need more and better roads.)

As of now only Bombay has a real option. Have money? Stay closer to your place of work. Less money? Go further away and use the public transport to reach your place of work.

So, in a place like Bangalore there is nothing that you can get for anything like 25 lakhs today and given the rather pathetic state of public transport, the only option you have is to buy a bike and drive all through the traffic. Anything lower than that, you can forget it and think about staying on rent (and paying an arm and a leg).

A related article, here in Mint. Here Niranjan rightly argues for creation of new cities, but I think that even here cheap housing will be difficult - given current conditions. Case in point being Bidadi - where there is a potential city being created. Land prices are already nearing the prices in Bangalore, so if you think Bidadi or Jigani will be a middle class heaven, it is tough. Navi Mumbai did have this effect on Mumbai at one point, as did Thane, Dombivli and the other suburbs, but it is tough to see that happen today. Mahamumbai is another case in point where prices are already driven up in anticipation.

Here is what happens in a "new city". Builders offer huge living spaces with the result that the budget still remains half a crore, except that you get a much bigger space there. Nobody, really nobody wants to sell small houses for the middle class. How do you get around that?

Monday, January 07, 2008

State of innovation in India

An article that looks at a ten year prediction made in 1997.

Pretty interesting. Worth a read. Gives a clue as to what direction the IT industry might be taking here.

He is specifically happy with Bharti Airtel and Jet Airways and thinks Novatium might be a big future innovation from India. Not to forget, zoho.

Real estate plateaus

in Bangalore, sort of. Atleast according to news reports. Why? If I were to put it very simplistically, there are two reasons.

Investing in real estate is a hobby in Bangalore. It was always a hobby for some segments (read businessmen, government babus, sons of the soil), but with IT chaps getting in the picture the market suddenly became larger and smaller at the same time. Larger because many far off tracts opened up and are still opening up and smaller because they were also quite choosy. So, property prices began to rise and coupled with more jobs and more people settling here, it was a nice cosy cycle.

And it will continue, as long as newer companies are set up and the IT boom keeps going - point being, for anyone else to buy houses, there has to be a similar boom.

But as IT hits a slowdown (well, or atleast slightly reduced growth, margins) the compensations reduces. As the dollar value goes down, the amount of money that comes in from onsite postings reduces proportionately. And the future value of compensation is a little uncertain. Why future? Even the present is uncertain thanks to variable components that are the norm in this industry. Then the fact that IT is no longer only Bangalore - it never was, but IT is slowly taking wings in many other parts, so a migrant driven IT in Bangalore might see many families slowly going back to their hometowns - ranging from Hyderabad to Trivandrum to Chennai. In other cities like Bombay and Delhi for instance, money is from multiple sources each with a critical mass. Business, stock markets, mafia (lets not pretend it does not exist) - all of which are surely present to a smaller extent here too, though I think IT is the driving force in Bangalore.

So, will prices go down? Not so soon - they have plateaued for now.

But if interest rates go up and the IT industry faces a protracted slowdown, perhaps yes. At this point, interest rates may actually go down and talk slowdown in IT is a little premature, but cross your fingers depending on which side you are.

Sunday, January 06, 2008

Reliance in IT

This is the ADAG groups latest move. In a field that is crowded, so to say, with the Infosyses, Wipros, Satyams and Cognizants not to mention captives, is this a good move? Actually, there are pros and cons, as always.

Setting up an IT company is not easy today. It used to be and still is, in certain niche areas, but not for a generic one. Reliance probably has a good chunk of IT work being done for its Rcom division, and if it is being used only for telecom networks, it is probably a good idea. But if this is being done with the intent of offering an "umbrella" service line, it may not be such a good idea.

For one, Reliance has no brand name in IT services beyond infrastructure management - which really is their core. Since most IT work is done abroad, even the big 3 are barely known in the US and it has taken them significant work to get to where they are today. To attract employees, Reliance will end up paying a premium since they have to work in a firm that has virtually no history in this industry. Yes, surely the big 3 also started off as nobodies, but that was nearly 15 years ago. Today they are the whos who of Indian IT.

When you start off with a high employee cost, the margin goes down. As it is companies are experimenting with various methods to keep costs down. And the market today is no longer fancied with IT companies. The stock prices of some of these companies are slowly but surely skidding. (Mindtree is trading below its listing price today - Infy is near a 52 week low).

Also land prices are at a high, though it must be mentioned that the industry is going through slightly lean times, which makes it difficult to find jobs - Reliance might end up striking good bargains. Reliance surely has cheap bandwidth available, presence in multiple countries using FLAG and Yipes. And some expertise in terms of its communication business. Time to leverage it? Sure.

But perhaps it is a better idea to work on it as a niche service provider rather than try to become what the other IT services are today.

Lenovo, IBM, Tata, Jaguar

FT, via rediff, dissects Tatas proposed takeover of the Jaguar brand. Is there a parallel between the takeover of IBM by Lenovo and this one?

Firstly, I am not sure if Jaguar and Land Rover can be taken in the same breath. Between the two there is a big difference. Jaguar is surely a marque brand, but Land Rover is not a luxury brand by any length of logic. (Correction: Thanks to Karthik below it turns out both are fairly high end brands.) (To me both the brands are more of an oldish brand). Obviously there is no overlap between Tata and the Jaguar brand, but that is how companies build their portfolio. Tatas launching something like Toyotas Lexus will take many years if they did not take a route like this.

Interesting suggestions through the article. In case they care to remember, Tata recently took over Corus. Now for an automobile, they control everything from the mine to the brand. Does not sound too bad right - how many other companies can boast of that?

Saturday, January 05, 2008

Made in India

Or how to outsource an industry to India. It is very simple. The players are what we will call the customer who wishes to outsource stuff to India. Then there are those in India, who will do the work, we will call them employees. There are also sponsors, competing companies and other stakeholders in this whole business.

First locate a customer, if you are a company or if you are a customer, you locate a company. So, if you are a firm that wishes to outsource, you locate "companies". "Companies" should ideally have, young brainwashable recruits, have a low cost of operation.

Once you have chosen the company, you call on the best and brightest (or just the new recruits) for knowledge transfer. It is preferable at this juncture that a trainer is also in the group, so this trainer can pass on the knowledge to the recruits. Here, it helps if you have an expat(s) from your company who can go out and work for a short while.

The balance knowledge can be passed on via electronic media - CBT or phones. You need to activate chat forums and other electronic messaging systems so that you need to pass on only "delta" knowledge to the recruits.

A company needs to have, preferably, multiple training centres, offices and enough back up and risk planning capability. It is also important that they are located in catchment areas for the labour.

Once you are done, establishing the initial level of confidence with the first few projects, you let them off on their own. You could, ideally, spin off the company into an "independent" entity, so effectively, it could survive without you. Payments can be made via the existing system or via a barter system involving multiple currencies. That is the easiest part anyway.

So, you thought, this is how an companies outsource IT? No, with just a few changes to the nomenclature, this is how to set up a Jihadi Factory.

Not too different is it not?

(And then of course, as a failover and a backup strategy, ISI has involved Bangladesh - call it nearshoring - a nice red herring.)

Thursday, January 03, 2008

Heard on the street

Quite literally. This time from an auto driver with whom I happened to talk about the traffic in Bangalore. The talk meandered as the auto did, from traffic to, the increase in traffic, to the lack of development and the general ignorance of rules (even as he broke a few.).

Then it went on to politics and this guy was wishing fervently that the JD(S) family party in Karnataka does not come to power. He was also quite categorical in saying that nobody will vote for them after what happened in Gujarat and Himachal. Pretty informed guy I thought.

Of course, he was just one auto driver - and he was also a professional driver - a rare species in Bangalore, but having said that, I haven't heard such vociferous opinion on the street in a while. A harbinger of things to come?

Update: A report in the Indian express with results from a CNN IBN programme. (I think this is the attempt by media to now lionise Modi instead of vilifying him and then hope he falls, but if true, its interesting.)

Wednesday, January 02, 2008

Another terror attack

Another statistic - this time the statistic is "The first strike on paramilitary forces outside of J&K".

Then there will be another one, "The first strike on paramilitary forces in South India/North India" and then it will be another one, "The first strike on paramilitary forces in (Insert state name)" and then we can all keep counting bodies, inventing statistics - after all thats all that they are.

Oh, the ennui of it all. Today it did not even appear as a major report on news sites, Indian and foreign. And it has disappeared even as it appeared - it took me a long time to get some of the links. There are bigger things you see.

If this is not war, pray tell me what is? Pakistan has successfully outsourced yet another thing to India, the "Made in India"Jihadi.

And here is a chap who protested, no, not the attack, but his being searched.

When oh, when, will this government wake up? Oh, perhaps they wont, they will just bury their heads in sand and hope that they will get all the votes for the ignoring terror threat.

Moser Baer DVDs

Smart idea that. Sell a movie DVD for 28 rupees? And its not for rent, you own the damn thing. Amazing value for money. This is a contrarian approach. Until now the movie marketing machine worked on pricing the DVD at as high a price as possible. Which seemed to make sense. Sell one DVD for the price of ten, sell fewer and make money.

And that is playing into the hands of the pirates - who rip off cheap DVDs and a whole market has spun off in DVD rentals. Despite the best efforts of all concerned, the piracy market has not gone down - despite them selling cheap shoddy prints, bad picture quality and lobbying and enforcement? Why? Simply because the audience out there wants to watch movies real bad. Not everybody can afford a 100 rupee multiplex ticket for every single movie. So, people get together, rent a DVD player (or buy - its really cheap, especially in the used market - and in the bottom part of the market) and watch movies whenever they get time by paying a 20 or 30 rupee rental. Spread the cost over a few people and it is really dirt cheap.

And now Moser Baer sells movies at 28 odd rupees. Great idea that. It is the idea that has the potential to kill piracy. At that price many years back, I barely got a music cassette, so I dont mind building a library. At this price, my take is that it is no longer profitable to be a pirate. Imagine that? The last time gold control laws were relaxed (and taking Indias example), gold smuggling went down. Cheaper than enforcement? Sure. Make the damn thing available - the days of shortages are went. The jury is still out on the technology and the quality, but in any case, it has to be way way better than what the pirates offer today.

(Update: These DVD's are very good. I picked up one today with a reminder to pick more up. They have a good library in quite a few languages apart from Hindi. Nice.)

The same thing now needs to be done for music too. Bollywood, get legal, allow legal torrent downloads for 10 bucks a song - and watch that market boom - atleast you will make some money as opposed to none today.

Tuesday, January 01, 2008

The movie marketing machine

The last few days have been spent thinking about movies. For no reason, except that in the past week, I have watched about 5 movies. Over multiple choices. From the local DVD rental shop to the multiplex nearby and my own DVD. I liked some movies, disliked some and wondered what the hype was about the others. And that set me thinking.

The movies are a lot different from what they used to be or how they used to make money. The dynamics of the industry has changed.

Now the number of sponsors (partners - radio partner, TV partner, media partner, cellphone partner, web partner) that you see at the start of a movie and the product placements that you see through a movie are as many as what you see in a soap opera on TV.

The whole business of a good movie is now geared to make you make that one visit to the theatre to view the movie. The greater number of people who fall for it, means the greater amount of money you make. Earlier, when the number of screens was lesser, the week 1 acted as a build up week to the rest. So, the movie could run for weeks and the stakeholders kept making money on it. Now, the whole game is to get you make that one visit at the earliest, preferably advance booking and much of the money is made before the movie is released. Once it is released, the first week is usually the highest grosser for most of the movies. Only really good ones or ones that get great reviews do better later on or in the DVD circuit.

So, from that perspective it is a mighty effort to put in all the work and see the audience either bomb or burst into rapturous applause in nearly a day. Which is the obvious reason why a repeat business mentality has crept in. Sell older movies, create merchandise, re-release movies, release movies with unedited shots and newer tracks and exclusive tracks on DVD and so on.

Effectively it is one big mean marketing machine. From the trailers and teaser websites, ringtones to the interviews that happen with every movie ending up with the lead star saying, "This is a different movie" to "This is the movie I dreamt of doing in my life". I remember the first couple of time I fell for that hype while watching an interview - Madhuri Dixit announced that her favourite song was from one of her upcoming movies and Salman Khan announced that a particular movie he was doing was Neelam was his dream come true. And both the movies were absolutely crappy movies, but thats what they were doing, they were marketing it. And then, all those stories about fights on the sets, chemistry gone wrong - the whole thing is just marketing. All so that you make that one trip down to the multiplex.

However, it is not a solitary force. As the marketing machine grows, there are other forces that counterbalance it. The power of reviewers. Apart from the ones who write in newspapers, there are some pretty good web reviewers and then there are the bloggers and many influencers - who influence friends into watching or not watching a movie. So, between the space of a few shows, all the marketing effort could go down the drain.

So, if you are sure or even if you arent sure of the audience reaction (how possible is it to predict?), the trick is to get that one trip in for the maximum audience. Hence, now, the smartest thing to do is to release as many prints as possible in as far off places before the reviewers and the mavens do their trick. Whereas earlier, the producers tried to create a short supply of prints and wait for the people to come in. Now, the prints go all out. Indeed, newer channels are opening up - web downloads, foreign markets, dubbed prints - anything to maximise that first chance...

And for a great review of movies in 2007, heres where you go...