Pyramid Saimira plans to float film content fund

MUMBAI: Pyramid Saimira Theatres (PSTL), one of the largest digital film theatre chains in India, is planning to float a film content fund that will help production houses create and finance content. The company is in an expansion mode, enhancing its digital theatre chain in India and overseas. It hopes to develop over 400 theatres in its network by year-end.

Confirming the development, PSTL MD PS Saminathan said: “We have plans to float a fund which will provide a steady flow of film content to our theatre chains across the globe. Initially, the fund hopes to raise about $150-200 million, which could go up to $500 million over a period.”

The infusion is expected to help film-makers produce films without delays. Producers will have to sell the copyright and marketing rights of the film to PSTL. Though the funding may not necessarily cover the financing of the film, sources said venture capital funds and high net worth individuals have shown interest towards investing in it.

The company has signed an memorandum of understanding with Infinity Film Completion, a division of venture capital firm Infinity India Advisors, which offers film guarantee and project completion services, including term loans for film projects.

The idea is to ensure that films are completed on time and within budget, thereby eliminating some of the risks in the business of film-making. Indian film industry is expected to reach Rs 13,000 crore by 2009.

With one leg in the film production business as well as control over exhibition, Pyramid Saimira’s business model eliminates the traditional middleman — the distributor. By virtue of its control over hundreds of screens, the company is able to simultaneously show of a film in multiple locations, which, to some extent, cuts piracy.

According to Saminathan, Pyramid Saimira intends to invest Rs 600 crore this year partly in direct funding of film production but mostly on refurbishing theatres. It will also arrange for about Rs 250 crore of institutional funding for production.

The move will also secure the supply side for PSTL, analysts point out. With PSTL, being part or full producer of the films, the company will have exclusive rights to the release of the films. This would make it privy to the first level of exploitation, before it is distributed to other players. It can also ensure a steady flow of content.

Internationally, film funds act like an alternate mechanism to private equity. The creation of such funds could help reduce the dependency on large dozes of private equity.

Many companies in this business are driven by individuals in the creative space, who find it very difficult to list themselves. The funds can partner with producers and directors separately as a team to bring in liquidity and make sure cash is distributed whenever the film is exhibited and the proceeds are received.