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Business News/ Mint-lounge / Features/  Ryan Kavanaugh: A crack at movie mathematics
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Ryan Kavanaugh: A crack at movie mathematics

The owner and chief executive of Relativity Media on acing modest budgets and making inroads into India

Kavanaugh plans to remake some of Relativity’s films in Indian languages, with local talent, and for local audiences. Photo: Michael Buckner/Getty ImagesPremium
Kavanaugh plans to remake some of Relativity’s films in Indian languages, with local talent, and for local audiences. Photo: Michael Buckner/Getty Images

Ryan Kavanaugh, the 40-year-old chief executive officer of Hollywood studio Relativity Media, has traded the one-and-a-half-hour drive from his residence in Malibu to Beverly Hills, California, US, for a 7-minute chopper ride. He flies his own helicopter and says it is akin to meditation. “Piloting a plane requires complete surrender of extraneous thoughts. When you are flying, you can’t think of anything else. For 7 minutes, my brain is clear," says Kavanaugh, alert and attentive. Seated on a sofa at one of the suites in the Renaissance Mumbai Convention Centre Hotel, he is sipping a Diet Coke.

Kavanaugh is every bit a Hollywood aristocrat—he lives in a Malibu home with his second wife Jessica Roffey, a model, whom he married last month; has a holiday home in Hawaii (though his phone is not switched off); and is a practitioner of Kundalini yoga, learnt from various teachers over four years. He wears bracelets in brown and cream and a Sikh kada on his wrists; a set of beads blessed by the Dalai Lama, and another “dipped in 11 sacred rivers". His cluttered wrist also sports a black watch which looks like the Apple Watch but is a $9 (around 560) one from a drug store that tells him his pulse. He passionately practises archery. “Yoga bounces me a lot more, it gives me more clarity and at the end of each session a lot of things come to me which otherwise might not," he says. Kavanaugh also builds his own drones.

Illustration: Jayachandran/Mint
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Illustration: Jayachandran/Mint

His studio is known for churning out profitable films, though not necessarily blockbusters. “Eighty-five per cent of our films are profitable. That’s the complete opposite of what happens at big Hollywood studios," he says. The studios, Kavanaugh says, are stuck in their old ways. “Their model is blockbuster or bust. To use a cricket analogy, either they hit the ball over the boundary or they are caught out...there’s no in-between. And today this means that 85% of their films actually lose money," he says.

Kavanaugh’s first introduction to this model came 15 years ago, when he started co-financing and producing movies for many of the major studios. Before he made a film of his own at Relativity, he had produced and financed more than 60 movies.

After that experience, he chose a completely different path. Relativity’s films have modest budgets. “We do not spend $100 million on marketing our films. Nor do we make $300 million on all our films," Kavanaugh says, adding that the company produces low-budget films for targeted audiences. In India, this model comes closest to Vishesh Films, owned by Mukesh and Mahesh Bhatt—the crucial difference being that Relativity’s strategists often use mathematical tools to understand what may or may not work at the box office.

Kavanaugh started young, and it wasn’t the easiest of journeys. He grew up in Brentwood, Los Angeles, with his Jewish parents—his father, a doctor, and mother, a real estate broker. They wanted him to be a lawyer or a doctor and warned him off the entertainment business. “I didn’t study either streams. But I read a lot and started studying music from age 10," he remembers. After college he ended up at investment firm Morgan Stanley, which introduced him to the world of finance. He says his Hollywood stint can be described by the famous words of Mahatma Gandhi, inscribed on a wall in his office—“First they ignore you, then they laugh at you, then they fight you and then you win" (he owns four-five first-edition books by Gandhi). On the opposite wall is an Albert Einstein quote: “I am thankful to all those who said no to me. It is because of them I did it myself."

Ryan Kavanaugh’s non-entertainment business is big. He owns nearly 20 companies in the pharmaceutical, biotechnology, aviation and dog food sectors. His brother, a lawyer, looks after the day-to-day operations of some of these companies. Philanthropy is his other passion. He runs the Ryan and Jessica Kavanaugh Foundation that donates “time and money to nearly 40 charities for children and animals in need. He acquired the American dog food company FreeHand a few years ago, and donates millions of tonnes of dog food every year. He lives with five dogs and six parrots in his Malibu home.

Kavanaugh describes his company as “a content engine" that he is bringing to India. “Indian content can’t be imported. It must be made here. India can be telling dozens of stories like Limitless every single year," he says. He has watched many Hindi films and it’s hardly surprising that he believes they are all like Moulin Rouge!. “It is not just me who is bullish about India. India is bullish about India," he says. He plans to remake three-four of Relativity’s films in Indian languages, with local talent, and for local audiences.

The first four films have already been selected. The Best Of Me, released in the US in 2014, will be remade here with Balaji Motion Pictures. The other remakes include 3 Days To Kill, an action film that starred Kevin Costner and Amber Heard, Masterminds, a comedy, and Oculus, a thriller. Relativity also hopes to shoot the sequel of the Henry Cavill- and Freida Pinto-starrer Immortals in India. Immortals grossed $227 million around the world.

Relativity entered China 10 years ago, much before it decided to venture into India. “Hollywood studios had already flooded India and I was waiting to see them fail," says Kavanaugh. “In China we are the only studio to own a distribution company and we are releasing 11 films in that market." Relativity has an official distribution licence for the country and other US studios want it to distribute their films in China, he says.

It took Kavanaugh a visit every month for 10 years to get a foothold in China. “There were big entry barriers in terms of protocols and regulations," he says. But persistence paid. Despite censorship, he says, it is one market that will grow: There are 20,000 movie theatres in China and 1.5 billion people. There are 40,000 theatres in the US and 300 million people. “Eventually, there will be some 100,000 theatres in China. So the market is just beginning, and the rules will eventually figure themselves out," he says.

He is equally, if not more, upbeat about India. In the US, 13- and 14-year-olds are watching more online video than television. India, he believes, isn’t far behind. Millions watched the Cricket World Cup on Hotstar, the app launched by broadcaster Star India Pvt. Ltd. He believes India is on the cusp of something big. There isn’t much available on streaming and on smartphones yet but, by 2020, the country will have the largest number of smartphone owners in the 18-25 age group. “Those are the real tastemakers, audiences that determine what works and what doesn’t," Kavanaugh says.

The Lakshmi Mittal group, one of the shareholders in B4U, is already committed to investing $100 million in the JV with Relativity, says Kavanaugh. The money will go into building a digital platform, to remake movies and invest in infrastructure.

It may be growing harder for Kavanaugh to enjoy films as he keeps tearing them apart for analysis. “But I like to go back to old films to see what inspired me. “Somewhere In Time with Christopher Reeve is my favourite," he says. He found The Matrix films revolutionary. “It was a completely different world," he says.

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Published: 18 Apr 2015, 12:25 AM IST
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