Competition puts Pentamedia Graphics on notice

It was just a matter of time. It had to happen and it has begun. The world number three in computer animation industry and the Indian pioneer, Chennai-based Pentamedia Graphics Ltd is now the gold field for start ups for talent mining. One such out fit that is nibbling at Pentamedia's talent and market is Total Infotainment Ltd, Chennai.

There are several on the horizon. The one that is being actively talked about is a start-up under incubation by Maveric Systems Ltd, Chennai. The reason for the hype on this outfit is the investor interest it has attracted. Investors like IFC, Spectranet and Bollywood superstar, Shahrukh Khan, are showing active interest to associate themselves with the incubated company.

Running the show at Total Infotainment is as chief executive is Mr. V.S. Sundararajan, former president of Pentamedia Graphics' US subsidiary. Assisting him is Mr. Subash Babu, senior vice president and another ex-Pentamedia Graphics employee. Total Infotainment, promoted by Singapore-based businessman Mr. Anil Jhunjhunwala, is said to have attracted a sizeable number of technical persons from Pentamedia Graphics.

Naturally, the business plan drawn by Mr. Sundararajan mirrors that of his former employer. The company operates in the domain of 2/3D computer animation, special effects, games and multi media - CD ROM duplication.

But he tries to be different in the manner of realising the goals. For instance, Total Infotainment does not quote for work based on man-hours to be spent. Instead it chooses to look at each order as a project, though its internal costing is done taking into account the labour involved.

Again, unlike Pentamedia, the company insists on getting the story concept on its story board before quoting for an animation or special effects order. "We will submit the pilot animation so that the prospective client knows about our technical strengths," explain the duo Mr. Sundararajan and Mr. Babu.

Meanwhile the mood at Total Infotainment is upbeat since the company has already, within four months of operation, boasts an order book position of $8.5 million including two computer/web based training projects. Like all other industry players Mr. Sundararajan hides under the non-disclosure agreement clause when asked about the project names.

The company signaled its domestic entry executing couple of projects for the big screen - Tenali, Krodham II, Anbudan, Priyamanavala - all Tamil films - and also one Telugu film. The company has also executed couple of ad film projects like Agsarcem, Funskool and Lion Dates.

According to Mr. Sundararajan, the company will be closing this fiscal with a turnover of $2.5 million, the next fiscal will be the period it hopes to take off in a great manner projecting a turnover of $20 million.

With $2 million investment already been made, the company is expanding its infrastructure and according to Mr. Sundararajan, another $18 million is being pumped into the venture.

But here again Mr. Sundararajan is cautious in drawing the money. "My capex will be based on the orders bagged. Moreover I am interested purchasing software and leasing the hardware," he says. A large portion of money is apportioned towards marketing expenditure.

The company is setting up an office in US and it already has one in UK. Incidentally Mr. Sundararajan will be shifting to US early next year, while the domestic operations will be looked after by Mr. Babu.

Currently the marketing is through direct mailing to production houses in the US and UK. According to Mr. Sundararajan, Total Infotainment will have a new and expanded board of directors early next year and the company is also working out an attractive stock option plan for its employees.

On the other hand work at the multimedia outfit promoted by couple of IIT-Madras graduates and incubated by Maveric Systems is proceeding smoothly. Contrary to what has been reported in leading economic dailies, the company is yet to be named formally.

Says Mr. Ranga Reddy, chief executive, Maveric Systems, "It is the press that is calling the multimedia company as Maveric Multi media. But it is not true."

Adds Mr. Bikash Mathur, executive director, "We are in the process of choosing a catchy name for the company. Right now it is a small entity trying to bring in people and yet to start generating revenues." The outfit has poached some people from Pentamedia Graphics.

Denying the various figures mentioned in the news reports relating to equity holding Mr. Reddy says that concrete business plans are being finalised. The entrepreneurs of the multi media outfit has to decide on the stakes to be offered to strategic investors like IFC, Spectranet and Bollywood superstar Mr. Shahrukh Khan.

"IFC is willing to invest upto $ 5 million provided the company is engaged in an export activity," adds Mr. Reddy.

What is clear, however, is that the people at the multimedia outfit are very ambitious and want to be the market leader.

According to Mr. Reddy, the incubated company will primarily engage in 2/3D animation business while looking at the possibilities of floating another company partnering with IFC, Spectranet and Mr. Khan to be in the video streaming business like Num TV and Sharkstream.com.

While the proposed joint venture company will source content from Mr. Khan's company, Dreamz Unlimited which owns rights for several Hindi films, the backbone/bandwidth to stream the video will be that of Spectranet. The promoters of the multimedia company will offer the conversion technology needed to stream the content via the Internet.

"Various plans are under discussion," is what Mr. Reddy is willing to divulge.

Speaking about the video streaming business Mr Mathur says that the company would use the latest component warehousing technology offered by an US based company.

"The modern technology will reduce our time to market. Dot TV is going to be big market as dot com," he adds.