Arjun Sankalia

Syncing up with Sony Music’s Arjun Sankalia

To say our guest on indialicensingpost.com is a veteran of the music industry is an understatement of the highest order. He’s worn many hats along his long and illustrious career from strategic marketing manager to handling the complete international music profile to amateur hobbyist DJ to present day as the senior director International music and publishing and head of licensing at Sony Music Entertainment.

A big warm welcome to Arjun Sankalia. Thanks for talking to indialicensingpost.com

Arjun: Thank you. It’s a pleasure.

ILP: You’ve been with Sony Music for over 19 years now, which means you’ve seen the glory days to the Napster phase and now the whole digital boom. Tell us a little about your journey. Did you want to quit at any point and seek safer climbs?

AS: There are many questions in there. It’s very interesting that you mention Napster. If I remember correctly I think Napster happened 2 weeks after I joined Sony Music in May of 1999, so I don’t know if I’m the “bearer” of bad luck but it’s quite a coincidence. How did my journey begin? I decided I wanted to be in the music business very early, since the 8th or 9th grade, I’ve always wanted to do something to do with music. I’ve always been very passionate about music, since the age of 8 or 9 I started collecting records and recording cassettes off the radio. So I was always looking for opportunities to do something with music because someone once told me that if your interest or hobby becomes your career, then you’re not working. So, I took that pretty seriously. When I was starting off my career there weren’t necessarily many opportunities… meaning Sony obviously wasn’t there, this was way back in the early 90’s, so in an effort to get a degree or a qualification I went out and did an MBA degree in Advertising and I was very clear that I wanted to do international music, so that ruled out all the Bollywood labels, so to answer your question, yes I did hedge my bet as far as my career was concerned and I actually worked in advertising for 3 years. To answer your question did I feel like quitting? I actually did quit in 2002 and went back to work in an advertising company but quickly realized that advertising is not what I want to do for the rest of my life and I quickly came back to Sony Music in three and a half months and have not left since then.

ILP: According to the LIMA Global Licensing Report 2017, Music (product licensing and merchandise based on music groups etc –  which doesn’t include licensing of music itself for advertising and other commercial purposes) clocks 1% of the 262 billion $ pie. Is this in-line with your assessment?

AS: I don’t know the right way to answer that question. If you look at the $ 262 billion figure that would not only include recorded music but worldwide concert grosses and things like that because the current IFPI valuation of the music business is around $14-15 billion. So if you were to take that $2 billion number against the $14 billion figure, I would think that would be in line for the licensing & merchandising business, though I would not necessarily consider myself an expert on the same.

Music Merchandise Grew to $3.1 Billion in 2016

ILP: How big do you think the actual music licensing & merchandising business in all formats is globally and in India? Which one commands the largest share?

AS: Licensing of music in ancillary products or into products like hobbyist, TV shows etc in the West is quite large, but obviously it is not that large in scale in India for various reasons like cost, development of retail, I would suspect a large amount of merchandise which is sold in the West is via LIVE events and through retail, both of which (LIVE and organized retail) are still growing in India. I don’t think we are there yet.

Nai Palm Sony Music

ILP: According to the LIMA Global study – in Retailing of licensed merchandise – India ranks 20th and contributes just 0.3% compared to US at 60% of the overall business. Are you seeing green shoots as far as licensing is concerned? Are channels like e-commerce and modern retail helping? Given that music consumption is on the upswing, the L&M business could get a fillip as well?

AS: You’re definitely right. We are seeing green shoots in the overall licensing & merchandising business. I can see from where we are sitting (near the office), there is a merchandise store which is called Planet Superheroes which is right across the road and one kilometer down the road, there is an Entertainment store called Title waves, but I don’t know if this has to do exclusively with music and rightfully so. I don’t know if you were to compare the sales of Avengers vs Star Wars vs music – what the ratio would be. But again to answer your question, yes green shoots are there in terms of retail and there are people out there going and investing in retail. Yes ecommerce is playing its part. Its taking care of availability. I could be sitting in Baroda or Kanpur and a “Bazinga” t-shirt is just a click away. But one must juxtapose is over the last 5-8 years it with the death of conventional retail, with stores like Rhythm House shutting down

and Planet M. Another way to put it is if modern music retail were still around it would benefit the sales of music merchandise because if I’m in a music store I’m more likely to buy music merchandise, the music store would be more skilled at assessing that if I’m selling say 10,000 Justin Bieber cd’s I could sell a 1000 Justin Bieber t-shirts. Now, fact of the matter is there is no music retail and modern retail is underestimating the opportunity to sell music merchandise.

Image result for fan wearing an ed sheeran tshirt

ILP: India is one of the countries where digital music sales have overtaken physical sales. According to the FICCI M&E report 2018, sales through digital channels account for 65% of overall music sales. More than half of the sales are through ad-supported streams, followed by mobile personalization (25%). Digital downloads accounted for a mere 2% of the overall sales – has the dust settled for the foreseeable future at least or are you suspicious of another technology disruption around the corner?

AS: I’m actually not suspicious of a tech disruption. I think one should look at digital in India and China differently. What digital and ad-supported has done to the business is that it has actually expanded the addressable market substantially. You’ve never had as many people participating in music consumption by sheer volume using the same kind of device. You’ve had record players at one point, then cassette players and cd players but device penetration has always been low or limited. Now if you were to take every mobile phone is a music player, and there are 800-900 million users in the country and once there are 100% smart phones along with data penetration. The other great thing is with all the streaming services out there, the need to pirate either consciously or subconsciously has reduced dramatically. I haven’t been to a train station lately, but earlier if you went there, you could pick up an mp3 CD with 100-150 songs burnt onto them for a 50-100 buck. Today at least in the top 30 cities, I don’t see the need for anyone to buy these as the music is readily available to you and given the central position the mobile plays in everybody’s life why would you want to do it? Now you can’t even give a CD away, 5 years ago you could give it to someone thinking they will grab it. Now most computers don’t even come with a CD drive.

ILP: Music companies seem to be venturing into a wide range of activities such as producing edutainment-based content for children, current affairs magazines, concerts, themed restaurants, artist management, hardware products, business content & spiritual content to name a few. Which activities have you explored and how have the results been?

Sony Music devotional music

AS: Spiritual content we’ve always had within the company, and that could have been organic or inorganic, because spiritual / devotional music is 5-7% of the market, I’ve seen in places like Mapusa (Goa) market you get a lot of gospel music, if you go outside Siddhivinayak you will find a lot of devotional music which followers pick up on their way in or way out, so we’ve always been in the spiritual / devotional space. We recently around 3-4 years ago started a kids content division, which produces edutainment and DIY stuff, there’s some really cool stuff which will be launched shortly. We’ve not ventured into the LIVE space, but we are in the talent management / artist booking space with some of our artists.

ILP: Has the rate of piracy declined with the introduction and increased affordability of new streaming services?

AS: I would say Yes. I don’t have the stats, but I would surmise even anecdotally that after accessibility has increased, the rate of piracy would have dropped. For example, how would you carry around 100 cd’s in the car? There is no need. Because even if you buy it how you going to listen to it? If you were to look at the sales of headphones and blue tooth speakers, then you’ve got a music system. strategize can see that there is definitely an upswing. If you go to a hostel you will find most of the students playing their music on their Bluetooth speakers. The phone has become such an integral part of you now, you first ask can I do it on my phone and if I can, why should I buy something else? I don’t own a music system at home. Many people spend a huge amount on music systems but use blue tooth speakers. These things prove that the mobile is playing the music off a legit service. If you’ve got 220 million users on in india on you tube, that’s a sizeable number. And with the CD you were either playing it in the car or at home. I don’t think those exist anymore. I don’t know when the last time was I put the CD into even a DVD player. Things have changed drastically.

“I don’t own a music system at home.”

ILP: YouTube still remains the no. 1 destination for music and music video consumption. Facebook is looking to jump into the fray as well. Does this bode well for the music labels? Tell us a little more about your licensing strategy with respect to these players.

AS: Yes, it does bode well from an overall aspect, it does bode well for the music industry. Youtube being the #1 service and #1 place for self-expression and others express themselves I presume that Youtube is the #1 source for music consumption in the world. But there are various issues related to Youtube which I’m sure you’ve read about which pertain to the “Value Gap” which is that the remuneration from Youtube is not necessarily in-line with what one would get from a standalone music service. But those issues are being addressed and Google has launched its own music service in various places. But my philosophy is that Youtube is a licensed and legitimate way to consume music and the nuances of how to make it more equitable for all stakeholders are being looked at.

ILP: Why haven’t we seen as many brands licensing music for their commercial communication? According to Pradeep Guha of 9X Media, he feels and I quote “the fault lies with the stakeholders of the music business who tend to discount their own product. Advertisers consider music almost the last in the food chain as far as their spends on commercial communication is concerned” unquote. Your views on the same?

AS: I think it might have to do with an overall knowledge, consciousness, awareness of copyright. When I was in advertising there were these urban legends that one didn’t need to pay for music if I change a note or if you used it for less than 20 secs you didn’t have to pay. I remember in the 80’s there were line by line copies of international tracks without any worry of copyright infringement. So because of this lack of awareness no one was aware of how much it would cost to clear the copyright. The second legacy issue is I think I think Pradeep Guha is right in the sense that it’s the “last thing in the food chain“ ad filmakers haven’t been paying as much attention to the use of music in their communication. However things have started to change with more awareness with people paying what is considered to be fair value for the track being used. For example we licensed the Ed Sheeran’s track “Shape of You” to a Unilever brand last year and it got approved by International offices and it was a decent amount. It’s more of a mindset issue where if say the production cost of a film is a crore (10 million) and they’ve kept aside 10-15% for the track, then it becomes a budgetary issue. What I try to tell people is that if you think the track really fits well with your communication then instead of pegging it to your production cost, peg it to your overall media spend. Because a 1 crore commercial might actually have a 100 (1 billion) media plan behind it. So instead of 50 lakhs of 1 crore, is 50% but 50 lakhs of 100 crores is not necessarily the same. You may lose out on a few on-air rotations of the spot but the deal is a lot more equitable and realistic.Because if you’ve written a script around that particular song, it should command a lot more value. So they look at it as part of the whole media buy and not as a fraction of the media budget.

ILP: Give us some examples of successful sync or music licensing deals that have happened in the recent past?

AS: Shape of You done with a Lever brand, Black Keys song will go air shortly, Saregama’s done a lot of sync deals. We’ve licensed music to Micromax to Bajaj for a motorbike which had a track from Bhaag Milka Bhaag. Theres a lot of action happening in this space. Even in the Chinese market a similar state existed – it takes 8-10 years to work out. So at some point in time we will also catch up.

ILP:How does a new artist go about licensing their music? Do they have to produce the track and come with hobbyist video or will Sony music help them with that?

AS: Yes you can come with the finished product and we will help them market it. But more often than not we sign up an artist and work with them on overall artist development. There are many aspects involved like song writing, song production, the whole creative process, the physical process which has to do with the creation of the song, then the deployment of the track either in India or around the world, then there’s marketing within which comes music video creation. Now, here many things have changed. Earlier when broadcast was big you would showcase your music video on multiple TV channels to sell your product, today there’s a stat that says millennials look at their phone about 150 times a day and if let’s say out of those 150 times, they are 80 times looking at Instagram, then you need to be present in the persons media feed. And now with the culture of everyone becoming a creator, you can’t have just one video, you need to have a whole allied marketing strategy with dance off challenges, memes and all these ancillary pieces of content to sell that piece of content. The idea is you need to have multiple pieces of content instead of just one showing up in people’s media feed at any point in the day and we help people strategise on how to go about it. And today the beauty of social, with the extreme access that fans have to their stars, I could write to Donald Trump if I wanted to via Twitter. If I see my favourite artist playing with their dog and I like dogs, I’m going to be a lot more interested in their content. So there’s a wide spectrum of content which needs to be put out. All of this needs to be factored into the plan.

Image result for keke dance meme

Image result for kolaveri di meme

ILP: In this age of social media overload what’s the tipping point for an artist to be taken seriously by a music label to license their music? Is it a million fans on Youtube?

AS: I don’t think there’s a specific number. With A&R guys the finesse lies in identifying the parameters for spotting the talent early in the artists trajectory rather then when they’ve already got a million fans and have become mini-celebrities.Its like the stock market you want to jump in as early as possible. And there are many tools and companies worth a lot of money like Soda tone which can help you identify what is buzzing among people. I read this book, there was this story about how on the Sunset strip there would be all these record executives who would go there  to see these glam metal bands perform and if you saw more than 3-5 A&R guys sitting in a bar, then there would be most of the labels bidding to sign that act. But if 3 months earlier you were the only guy there then your chances would be much better.

ILP: Does Sony music help Indian music artists launch globally?

AS: Yes, we are keen to take Indian music to the world stage. That is an objective. Indian music has had its moment on the global stage with AR Rahman at the Grammys but when will we have our sustained moment. But I think the question to be asked is  when will we have our own Meghan Trainor or our own Despacito and I think that will happen sooner than later because if you see the rise of Latin or K-pop outside of Latin America and Korea around the globe, India should follow soon whether its hindi or english or tamil, one does not know. If I were to be bold I were to say next 3 years if I was not I would say the next 5!

Thanks for speaking to us at indialicensingpost.com Arjun! We look forward to keeping the communication going and receiving feedback from our listeners and readers and your responses to the same. Cheers!

Nick-ing it in the bud – Dan Frugtniet

We caught up with Dan Frugtniet – VP – Licensing & Business Dev at Viacom International Media Networks (VIMN) on the sidelines of the India Licensing Expo for a candid chat on his travels across India, state of play for his portfolio of brands, piracy, and his advice to first-time entrepreneurs.

ILP: You seem to have a highly in-depth knowledge of India having traveled extensively across the country in the 90’s and now in your current role as VP, Licensing & Biz Dev for Nickelodeon & Viacom Consumer Products. How has the licensing industry shaped up according to you since then?

Dan: I’ve traveled a great deal across India back in the 1990’s and have some fantastic memories of your country. I joined Viacom 8 years ago and witnessed how much India has changed dramatically over the years. Especially the licensing space has seen huge changes I would say in the last 3 years. It’s always a pleasure to visit India and this is my second visit to the India Licensing Expo so thanks again for welcoming me!

ILP: In your current position at Viacom you oversee the Emerging Markets region, please share some of your insights on how these markets are shaping up vis a vis the global landscape.

Dan: Each market has its own nuances, tastes and preferences and we like to look at them independently rather than a one size fits all approach. All of these markets for Viacom Nickelodeon Consumer Products are showing a positive upward trend as far as licensing is concerned and we continue to expect YoY growth as we move through 2018-2020.

ILP: Which are some of your key properties and some of those in the pipeline?

Dan: Our 3 biggest brands in the portfolio from an India licensing perspective are MTV, SpongeBob SquarePants & Dora the Explorer. SpongeBob has his 20th Anniversary in 2019 so there will be lots of activities to help celebrate including new Seasons and a 3rd Movie in the pipeline, and Dora is 20 years old, but they still have massive consumer fan bases around the world. So, we continue to nurture and grow these evergreen properties. But we are also now very much focused on Paw Patrol and rolling out new categories and SKU in India over 2018-19 and onwards. This property is a global pre-school juggernaut and continues to win awards and gain fans all over the World!  At the same time, we are beginning our journey with Shimmer & Shine, an awesome girl’s pre-school property, and Mattel will launch Toys Q1.2019 in India with new licensees and new categories to come.

ILP: When do you think a brand is license ready?

Dan: That’s a million-dollar question. I think a property needs to build a strong and robust connection with the audience in an impactful manner (which in our case could be through a TV show or digital content). With that built-in audience, it gives a licensor like ourselves the confidence to go out into the market and monetize it with consumer products.

ILP: According to the latest LIMA figures the global licensing business is valued at $272 Billion of which character/entertainment licensing comprises a majority share of 44.7% at $121 billion. Viacom has a significant play in this space. What has been your strategy to grow this category and take it to newer heights?

Dan: At Viacom, being a big portfolio Licensor and specifically a pre-school powerhouse in the character entertainment space, we are continuously investing in both nurturing our evergreen franchises as well as building and launching new  properties  that will appeal to our core target-demographics i.e. kids 2-12yrs. We want to be present wherever they are and entertain and educate them in the best possible way. JoJo Siwa is a great example. JoJo has a HUGE global following as a tween social-media talent – her YouTube footprint has had 1.3 billion views! We created a consumer products programme for her, and JoJo’s signature hair-bow became a global trend with over 10+ million bows shipped in 2018!

ILP: Closer home, retail sales of licensed merchandise in India have grown a total of 44% to $1.476 billion over the last 4 years. This despite a HUGE grey market. How is Viacom tackling the problem of piracy? Any key steps based on learnings from other markets?

Dan: Yes, piracy is a HUGE issue we all face globally and we continue to work with the customs and police departments in all our markets to ensure our IP is protected through enforcement, etc. We rely on our partners to help report counterfeit products and then take immediate action to address it. Anti-counterfeit operations require the support of all key stakeholders from Licensors / Licensees / Government Depts / Retailers and Distributors.  Part of the problem-solution is to identify and clean markets of fake goods, but there also needs to be a focus on education of consumers and parents that counterfeit products are potentially dangerous and may injure a child.

ILP: You have experience in vertical licensing businesses with a client direct model as well as Licensing Agent model in a variety of territories. Which has proved to be more productive and efficacious?

Dan: In India, we work with our JV business Viacom18, and they manage all of our IP in India and South Asia and do some amazing work and deals in the region. Myself – I have spent the last 13 years working on Direct-to-Licensee and also Agent models so understand the nuances of each, and they both have an important place within any Global Licensor to expand their licensing business.

ILP: What are your key checkboxes for signing up a licensee?

Dan: For me personally, I like to see a lot of passion in potential licensees that they are going to give their 110% to not only recoup their MG investment but to also develop an innovative product that is priced competitively and ultimately is appealing to our target-demos and sells at retail.   Ultimately, trust is a very important factor, this is an essential part of any successful licensing deal as let us not forget that the contract terms are long and we need to work together for years, so it should be a happy partnership built on strong foundations for the long-term. Finally, I would say communication is the other key factor, if there is a problem I want to hear about it right away from my Licensees or Agents, then together we can find the solution!

ILP: What is your advice for a young entrepreneur looking to set up a licensing business?

Dan: Find your passion. Do you have an idea that you think you can execute or a product that you believe in and also believe that other people need and would pay for? Then go out there and start networking. Meet with a few experienced folks in the business, get their feedback and together sharpen the idea or product until it has achieved a certain critical mass. The next big thing could be waiting for you just around the corner. Keep your eye out for it and remember to come to the Viacom Nickelodeon Consumer Products team first!

 

 

“Re-Imagining” Entertainment – Dhimant Bakshi

We managed to catch up with Mr. Dhimant Bakshi, Jt CEO, Adlabs Imagica on the sidelines of the India Licensing Expo. To listen to the interview you can scroll to the bottom.

 

ILP: Give us a little background on Adlabs Imagica. We know its a 130 acre property in Khopoli, which is on the outskirts of Maharashtra and is India’s answer to DisneyLand, but tell us more about what you have to offer?

Dhimant: This is a dream our promoter Mr. Manmohan Shetty saw years ago when he visited DisneyLand in California and his dream was why can’t we create something with Indian content that is a themed destination with Indian pricing in approach but international in terms of ride quality and guest experience that is world class. It is a dream that we all live by. We firmly believe that the Indian demographic is perfectly poised for such an offering and we really want to give Indian-nes in our entire experience apart from various other international flavours that we can blend in, and get some of the best in class rides made. Some of our rides are as good as Universal or Disneyland both from a safety stand point and ride quality. So we also said we have to create Indian IP which is related to the park and convey the Indian-nes in what we really do.

ILP: Talk us through the buffet you have on offer at Adlabs Imagica. You have a waterpark, a theme park, a snowpark etc.

Dhimant: Our approach was to build an entertainment district really. So we started off with the theme park which is a 74 acre property with 25 rides and attractions. Apart from that we have a 20 acre water park with 14 rides and the wave pool, apart from that we have India’s largest snowpark with real edible snow and we have a 4 star hotel called Novotel Imagica , managed very well by Novotel. So apart from these 4 anchor properties we recently launched “House of Stars” which is India’s first official Bollywood hall of fame which has sets as well as characters. Apart from that we have “Eyelusion” which is trick-eye museum, which is a first time one would see this concept in a theme park. We also have integrated with “Chhota Bheem: The Ride” which is the first character based roller coaster ride in a theme park. And since you used the word buffet, I must use the word “sumptuous” to describe our offering at Adlabs Imagica. One can really pick and choose what they would like to consume. There’s something for everyone. And what really tops this up is after a day of fun and entertaining experience, there is a wide range of themed-cuisines options which is designed and operated by our own team. This is coupled with merchandise and fantastic guest experience that, of course, has to go without saying.

ILP: So now lets talk about the business of licensing – how do you think licensing can help Adlabs Imagica?

Dhimant – Apart from being very obvious that it adds to the revenue stream, more importantly what we feel is that there is a need of Phy-gital experience that one has to get. We as a theme park can give a physical-outdoor recreational experience that one would really look for. With the onslaught of media and so many characters coming and going, they need a place to live in really, when most other characters start from a animation, TV show or game etc.

Ours are all original characters – designed, created and owned by our in-house team, its a long journey. While we will look up to Disney for inspiration, our efforts is to slowly and steadily make products and services that are appropriate for Indian market. Make them affordable, yet aspirational without trying to charge an undue premium. And we really want to fight piracy and find a more collaborative solution of licensing wherein it’s a more revenue share approach as well. It is not just me charging you a licensing fee and not caring what happens to you later. We want a win-win and collaborative approach for both parties.

ILP: How is this merchandise being distributed? Is it primarily at the theme park?

Adlabs Imagica’s range of bags

Dhimant – Yes, primarily at the theme and water park, but very interestingly we have made forays into Hamleys. it’s more a retail arrangement not a licensing arrangement like a DTR. Apart from that we also have Amazon, Flipkart, Myntra, Jabong, Limeroad, First Cry – many such online channels through which we sell our merchandise. And people recognise and love our characters, whether it’s a Gautam Budhnagar or Trivandrum, the love travels far and wide and thats what really gives us the high / impetus to create more such characters. (So the strategy seems to be make them fall in love with the characters at the theme park and get them to buy when they travel back?) Catch them young and watch them grow.

ILP: Any other plans in the L&M space that you can talk us through right now?

Dhimant – This is really our first effort in the licensing market. The way we planned was to spend the first 4 years building our own characters, we really were not open to getting in external characters, primarily for the reason, that once you get into the trading mindset you will never build your own brands. Apart from the investment, it’s the time and effort that our team has spent on creating the characters from scratch and getting them right, and then, opening doors for other characters. We see Imagica as a place for all characters, very secular. Infact, we are open to other alliances. We definitely want that India progresses and content is consumed well, and merchandising options is going to be a logical output. If you see right now with the number of channels, it is complete media over-load so 1 is to build affinity and 2 to retain. Building affinity may happen but is retention really happening? We believe in having a 360 degree view. And the term which was used yesterday was ‘Sustainability’. There are conventional channels like TV and digital media for animation, but there is going to be a humongous overload and people will NEED to take a break and look towards physical form of recreation(then all roads will lead to places like Adlabs Imagica) and I hope and pray the industry opens up to more such collaborative licensing models. It shouldn’t be You vs Me, it should be YOU & ME.

 

ILP: Whats your advice for a budding entrepreneur wanting to start a business especially given the tectonic changes we are seeing in the retail space?

Dhimant – Before I go to entrepreneurs, I think what you have articulated as a question is a great business need. There are many angel networks and organisations like LIMA who can offer direction and guidance to young geeks and entrepreneurs and get sounded off on what they can do and receive feedback. We are happy to be a part of such organisations. There are many buzzwords and many people get floored into them without really taking a stock of their situation. Coming to your question, at an industry level we should probably build an incubation centre if I may use the word. And second, seeing what your idea can do for people, solve a problem, not just because there’s a whole lot of moolah sitting there and let me make money out of it. It is about going to the basics and have it all well thought out. It has to be a more long term approach. Essentially, it should be long term.

Thanks for the chat and the insights and thanks for talking to us at IndiaLicensingpost.

Audio:

Excel-ling since 1999 – Muslim Kapasi

To listen to the interview, scroll to the bottom and hit play.

He’s been a serial entrepreneur and the founder of the company which was established 19 years ago back in 1999 – has successfully managed to grow the company’s revenue from 1.2 Cr to over 80 Cr as of FY 16. The company was initially set up as a Home Entertainment line, Excel Productions Audio Visuals Pvt. Ltd. (aka THE EXCEL GROUP) but has since ventured into many product verticals in the licensing and consumer products space such as Excel Home Videos, Excel Interactive, Movies & More, My Baby Excels, StarWalk, Excel Innovators and Nitroid. My guest today is Muslim Kapasi – CEO of the Excel Group. Hi Muslim, thanks for your time.

Muslim (MK): Thanks very much for the kind introduction. I’m very happy to be speaking with IndiaLicensingPost. You know how it is with social media these days. Always saying a lot more about you.

ILP: You’re a fairly media shy guy. We couldn’t find too many interviews of you, which is why we are so grateful you allowed us to speak with you.

Today Excel is one of the largest licensees in India, please take us through your journey. What were some of the pivotal moments?

MK: We started as a manufacturing set-up. I don’t think many people know how we actually started with our home video business first, and what led us into licensing. That’s where the whole seed was placed. We had a whole manufacturing unit. We were the sole manufacturers for 20th Century Fox and CIC which was a JV between Universal and Paramount pictures who use to manufacture their own videos in India, they had their own offices in India (this is somewhere in the mid-90’s), and we had done an OEM deal with these manufacturing companies. While we went about building a state of the art manufacturing plant which would meet with Hollywood standards, we hoped Bollywood would follow as well, but that didn’t happen. So we had a manufacturing set up but we were struggling with very low capacity, and this went on till 1997 till Cable and Satellite television took off and more and more consumers were exposed to LIVE news etc prior to which we only had the standard Doordarshan fare or you would have to rent a VHS and watch it at home on your video cassette player. So that’s where we were at that time. Piracy was booming. Very little manufacturing being done at our factory, we had debts and we had no customers. Fox was struggling at that time, CIC had shut down, they decided that India was a lost cause. That’s when we realized, we could pitch for licensing the products of the brands we were working with and build a business out of that. In hindsight I think it was a great decision, but if it were today, I would tell anybody NOT to do it. Having said that we signed up the Fox license to run the factory. Coincidentally, 6-8 months later we realized, that we were much better as distributors than manufacturers and a year and a half later we shut down the manufacturing completely and we started outsourcing manufacturing as we didn’t have the bandwidth, we didn’t have the time and we needed more folks in the marketplace at the front end rather than the backend. That’s how we got into the licensing business. That was a foot in the door. Factory ko chalana hai, factories bandh ho rahi hai. Fox was shutting down and we had set up the manufacturing unit especially for them. It was very empathetic of them to give us a license at not very difficult terms at all. They must have realized that they owed it to us. In fact one of the Fox officials whom I will not name said “You will burn out in a year or year and a half”, but that was not to be. Soon Disney came our way and then Paramount. Then we realized, we should diversify and the closest thing we understood was gaming, because gaming was still very much a physical product, so we signed on Electronic Arts (EA games) for PC games. The pivotal moment is that we diversified in the right product at the right time. As you realize with technology businesses, change is inevitable and what was peaking now was about to sharply decline and we could sustain as we had moved on and we had something else supporting us in that fray.

ILP: Your company has exclusive licenses of various global brands like Twentieth Century Fox, Disney, Marvel, Mattel, DreamWorks Animation, Warner Bros., Viacom, Turner, etc. for various product categories for the territory of India, Nepal, Bangladesh and Sri Lanka – what made you opt to license 3rd party brands?

MK: where are the 3rd party brands? I see all frontline brands. And a brand is a brand, isn’t it? In many ways, we went to some brands, some brands came to us. That’s how it evolved. To quote someone it was “path-breaking” It was like a friend from the industry who was a licensor at one of the licensing conferences said to me, “we had 9 companies pitching to us for the business, but we went with the 10th company who was not pitching to us”. I think the passion also shows, isn’t it? When you’re out in the market and putting a product on the shelves and how your placing the product in the stores, and then that itself becomes the center of gravity and attracts the right partners, the right brands etc.

 

ILP: According to the LIMA Global Study 2017 report, Entertainment/Character licensing accounts for 45% of the $262 billion sales at retail. How big do you reckon the market is in India?

 

MK: Market size is something I haven’t been able to nail down and everybody has their own take on it and the methodology of coming to that number is very different and very unique, but there is very little connecting those numbers either. When we talk to retailers, they have a different number compared to the wholesalers who have a different math, for the various categories and there is a lack of transparency, there are unaccounted ways of conducting businesses and all those numbers are superficially extrapolated by a particular study or entity. Very rarely have I seen these numbers become meaningful when you get onto the ground and start working. The $262 billion number does seem heartening, but in India, the 45% figure for character licensing does seem inflated. I wouldn’t put it at more than 15-20% of the overall business. Much of this has to do with how we manage characters and also we have a different consumer. Our consumer is price loyal and not brand loyal. Very often he’s happy to settle for a counterfeit which is at half or 20% cheaper than a branded product, so the quality, the utility and the price is met. That probably keeps us restricted in that space.

ILP: What are the key tick marks you must have in place before investing in a licensing programme?

MK: I wouldn’t want to put it down to any specific tick marks as we are largely driven by instincts or guts.

ILP: At the CBME 2018 panel discussion on the future of licensing, you mentioned that the growth of the licensing business would depend on the coming together of many different parts to make the overall business stronger and hit a 1-3% of retail. What are the impediments the industry currently face which need to be overcome?

MK: Yes, I think there are many impediments we need to overcome. Largely I think is the cultural impediment. We are not in a very conducive ecosystem. We have become very short-sighted “Whats on the table kind of approach” instead of thinking long term. Everything is so dynamic as well. You don’t know which retailer or brand is going to get purchased. When youre working with a licensor – 10-year relationship and you’ve nurtured a brand or character like your own, and you’ve made products standout and then suddenly…. Very often its easier to SELL than become SOLD. There are also other issues like infrastructure etc which we’ve known for years which haven’t rapidly changed either.

ILP: You are one of the largest licensees in the country, what are your expectations from a licensor?

MK: Loyalty. Its one of the most important ingredients. Loyalty and Trust. Very often a licensee goes to a licensor for a new product or category and takes It up, nurtures it over 3-4 years and builds it into something that everyone notices and suddenly everyone wants to pitch for that product category and you don’t want to be put in a place against those pitches.Its very disheartening and disorienting. If this continues, I feel the whole licensee, licensor relationship is going to stay very fractured. This change needs to come from the larger brands, the market leaders. When a small brand comes and offers you a license, you know that licensee is also going to squeeze that small company and he is going to tie in that company for 10 years or 15 years or even for perpetuity. When that becomes big the licensor has very little left to exit.

ILP: Do you have aspirations to have your own home-grown brand?

MK: Not really. We have a lot of aspirations, but we don’t have space and the time, being such a force in the licensing space. Our DNA is a licensee. Whenever there is a new character we are always trying to figure which are the categories or IPs that are best suited to take that particular character to market? We are very licensing driven, but ever so often the thought does cross our minds since we work with so many brands. But I don’t think we’ve done enough in the licensing space yet. There’s still a lot to do and a lot of growth to be achieved.

ILP: How do you gauge customer appetite for a particular brand, since you need to be ahead of the curve?

MK: The simple answer is to BE the CONSUMER and satisfy those needs. And of course, while we are handling so many brands and categories, we do have customer insights coming through our feedback channels.

ILP: Which category of your range has proved best suited for licensing? Any key learnings you would like to share?

MK: I think I’ve already answered this. All have equal potential. There’s a lot yet to be done. If there’s a less important category I would say soft toys because that is so well covered. But there is so many new IPs being launched every day. SO many new movies coming out every week.

ILP: So you feel that’s a problem now? Too many new IPs launching?

MK: I think that’s the order of the 21st century. The problem of plenty. To digress we have more people suffering from obesity issue than the starvation issue. Likewise, we have a lot of content coming in with a lot of aspirational value but not enough takers. Or the consumer seems to be overloaded with choice – too many characters and within characters too many colors, shapes, sizes, concepts and that is going to remain for a while.

ILP: You seem to have a great desire to help upcoming entrepreneurs nurture their dreams and bring their vision to fruition. How does a budding entrepreneur build a license-ready brand?

MK: I think to follow your heart. Many times we got into categories when people told us not to get into them, and we realized the more somebody was telling us NO, the more we wanted to go ahead. That’s the advice I would give. Don’t let fear or somebody else deter you from your dreams. And many times that’s where the big pot of gold is sitting and nobody is uncovering it.

Making heads turn! Ace jewelry designer Mrinalini Chandra

Following your heart in a world of conformities is inarguably an audacious act. That is exactly what Mrinalini Chandra is doing and making it large! Her debut collection called PLEASE HAVE A SEAT showcased in Lakme Fashion Week 2014 took the fashion fraternity by storm. It was a hit and marks a humongous breakthrough in her journey. 

With an urge to take handcrafted finesse to a new high, inspired by the the rich culture & poetic verses of India, trained in Fashion Luxury at the Creative Academy, Milan & NIFT, New Delhi, Mrinalini Chandra worked at Tanishq (New Delhi) and Montblanc (Germany) before launching her own label in India. She was also listed as one of Asia’s top jewelry designers by WGSN – the global trendspotting agency.

In 2017, Mrinalini collaborated with global iconic brand Candy Crush to launch an exclusive range of jewelry for women and men.

We are going to talk about all of this and more with her, a warm welcome to Mrinalini Chandra!

If you would like to listen to the interview instead of reading, scroll to the bottom and hit play!

ILP: You’ve been very busy with the Shaadi of the year – how did it feel like designing jewelry for your favorite muse Sonam Kapoor?

MC: It’s always an incredible experience to make anything for Sonam. She is the warmest person to work with and everything you make for her, she brings it to life. It is nice to see someone do justice to creativity. It was really nice to make the Kaleeras for her. She was the most resplendent bride ever; so real and traditional. In a world, where everyone is trying to be too modern and different, she stuck to the most traditional way of dressing as an Indian bride and she did all her ceremonies as they were meant to be in her Punjabi culture which was the part that I loved most about the wedding. It wasn’t about breaking any norms but doing something that she really believed in and doing it with utmost honesty. Kudos to her. 

ILP: Bollywood plays by a different set of rules. How does a girl from Lucknow with no “godfather” get a foothold in the industry?

MC: That’s a very tough question to answer. I feel that I am still figuring things out in my journey and when I look back, I feel I have come a long way. I have never aimed to be in this part of the industry. I have always thought of creating a better product every time I work on a project. From the very first product that I designed to the Candy Crush project, it was always about creating something better than the last time. So, for me, this has been a very exciting journey and I am lucky to have people in the industry, who see the beauty in it and have supported me as well. Of course, the journey has its ups and downs, but it sure has been a rollercoaster ride. I am blessed with a great support system: my family, my team and my incredibly gifted karigars. The high is that if you can create the visions you have in your mind with people who have not seen it but are willing to give the chance, I think that is the most satisfying feeling of being in this field. There is no substitute to hardwork. 

ILP: What does the brand Mrinalini Chandra stand for?

MC: I would like the brand to evolve into something stronger but I also want it to retain the qualities it has always had. The brand is all about evoking a sense of wonder. Every time I create something, I want people to be a little surprised by it. I want the brand to evolve into something classic – like a Dior or Chanel which becomes a part of your trousseau. If you buy earrings from me, even though they are not precious jewelry, but it is precious enough for you to relate to it, tell your story, keep your secret and pass it on to your next generation.

ILP: Since ILP is primarily about licensing, tell us about how artists, like yourself, view collaborations with global brands to reach different segments of the market or reach a completely new audience?

MC: I think it is a great way of giving an opportunity to new and upcoming talent. It helps you generate a visibility which is otherwise beyond your reach. I feel that is what luxury is all about. Someone sitting in Antwerp can place an order of something made with filigree. The best thing about collaborations is that brands from different horizons feel that there is compatibility and the result is always exciting. It brings together two cultures and people are up for newness.

ILP: Tell us about your experience partnering with global sensation Candy Crush. Jiggy George, Head, LIMA India & Founder & CEO – Dream Theatre called you one of the “most talented yet down to earth designers to work with”. What was your experience like?

MC: It was most exciting and fun experience working with on a collaboration with Candy Crush. It was not just about the collaboration but about the whole team and how it came together with everyone contributing to it in terms of not just putting in ideas but also putting their heart and spirit in it. That made it really very special to me. Since this collaboration has happened at an initial phase of my career, it has definitely been a milestone for me. I am very thankful for the faith that Mr. Jiggy George had put in me when I first met him and for him to think that this is worth investing in a young label like ours. My work is very craft oriented so for someone to see this possibility was truly visionary. I also think that the product that we made and the kind of responses that we have had, made a huge difference in the way that our label is now seen. 

 

ILP: Any particular collaboration on the global stage that piqued your curiosity?

MC: There have been a lot of collaborations that have caught my eye in the past. I like that major international sensations of brands collaborate with artists. I find this very fascinating. Of course, a lot of brands collaborate with models and singers but not much with artists as they have very strong opinions of certain things and brands have very strong ideologies which results in a bit of a clash. However, I like that because eventually both compromise and that, for me, is a collaboration in its true sense. I really like Louis Vuitton, which is a brand known to have very commercial products, collaborating with Jeff Koons which is a very different brand altogether.

Among Indian brands, the Manish Arora collaboration with MAC was really exciting. MAC is a brand known for its classic colors and not known for its fun and spunky nature whereas Manish is known for his out-of-box thinking. I loved the packaging in this collaboration.

ILP: We interviewed art aficionado Jasmine Shah Verma sometime back and she talked about her passion for taking art out of the galleries and to the masses via everyday objects like cutlery, lampshades etc. Do you think branded jewelry also holds the same potential?

MC: I think it definitely does. Also, because branded jewelery is wearable, and the potential of wearing it, the usage is much more. In fact the Hindu called my jewelry a “wearable installation” – which I really relate to. I like it more than being called a haute couture designer because of the high utility factor. I have clients who are known for their quirkiness. Its like they say it takes one to know one.

ILP: Tell us a little bit more about your product mix and distribution platforms.

MC: I started with basically every-day jewellery category moving towards the customized wedding range with not just the massive Kaleeras and but also wedding gift products. Customization is really becoming a hallmark for me because people want something different and I am more than happy to create it for them.

ILP: Do you face the problem of piracy of your designs?

MC: Yes, I do. India has very poor laws with copyright infringement. Labels, both established and younger ones, go this route and it breaks your heart. You do not know if you should take this as a compliment because you have put your heart and soul in creating something new. I feel with some new social media pages coming up, it is easier to shout out and point out piracy and it has noticed that people are in support of anti-piracy. That is very helpful and encouraging to us. I believe the consumer is not so unaware anymore, is more educated and smarter and because of social media exposure their knowledge is better. You cannot fool anyone so easily anymore.

ILP: Although the overall consumption of gold dipped last year vs the average over the past decade, India is still the 2nd highest consumer of gold behind China according to the World Gold Council. Are you looking at other precious or semi-precious metals to de-risk?

MC: Since I have started working, we have most commonly dealt with 24-karat, 22-karat and diamonds in 18-karat. Now what we see is, something very typical to Dubai, an offering from a 9-karat to a 14-karat which is becoming very prominent in India. In fact, I am myself working on a line like that. Silver jewelry has always been there. Precious stones are not so popular in India unless they are combined with white or yellow gold. Because platinum jewelry has a higher price point, I don’t see it working so much for women as much as wedding bands for men which would work. I do not see gold disappearing from an Indian market point of view. The younger women now still prefer gold but with a modern outlook. In a pret way, I see gold in 9 – 14 karat continuing to grow.

ILP: How do you balance art & commerce?

MC: That is the hardest thing I have ever had to do because when I am creating something I don’t want to think about how to monetize it. But sadly, I have to. Aditya, my husband, has taught me the importance of commerce and how to balance it with art.

ILP: Which designers do you draw inspiration from?

MC: In India, it would be Anamika Khanna. I have been a big fan of her since I was in college. I happened to interact with her just after my first show. She just stopped by to buy the products in the stall area. She said my products really caught her eye and commended me on it. That moment meant a lot to me. All her clothes are like an artwork which does not follow a regular pattern making process. I think she does draping on a mannequin and it comes off as an original. I don’t think she is a person who would compromise on the amount of work she wants to put in her designs which I really like and follow in my line of work as well. I would not like to compromise on my products. Sometimes the product gives minimal profit, but at the end of the day it is the client satisfaction that really matters.

On the international scene, I love many jewelry designers and follow their work. One of them if Jacqueline Ryan who takes her inspiration from Greens – its 3D jewelry. I’m not very clued into their personal lives, but I love their work and continue to follow them.