Contemporary Concerns Study

Yash Raj Films: Evolution of Strategy

Dharmendra Hiranandani Rishabh Raj

Roll No: 1511091 Roll No: 1511115

Mentor:
Professor Pranav Garg
Assistant Professor
Corporate Strategy and Policy
IIM Bangalore
CCS - Yash Raj Films: Evolution of Strategy

Contents
Acknowledgements................................................................................................................................. 2
1 Introduction .................................................................................................................................... 3
2 Motivation....................................................................................................................................... 3
3 History of Yash Raj Films ................................................................................................................. 4
4 Evolution of Strategy....................................................................................................................... 5
4.1 Economic Choices ................................................................................................................... 5
4.1.1 Higher number of movies per year ................................................................................. 5
4.1.2 Firm scope ....................................................................................................................... 5
4.1.3 Ancillary streams ............................................................................................................. 6
4.1.4 Franchise building ........................................................................................................... 7
4.2 Strategic Choices ..................................................................................................................... 7
4.2.1 Forward integration into distribution ............................................................................. 7
4.2.2 Talent management ........................................................................................................ 8
4.2.3 In-house Marketing ......................................................................................................... 8
4.3 Organizational Choices............................................................................................................ 9
4.3.1 Organization Structure and Processes ............................................................................ 9
4.3.2 Leadership ....................................................................................................................... 9
5 Interdependencies among the choices ......................................................................................... 10
6 Conclusion ..................................................................................................................................... 11
7 Exhibits .......................................................................................................................................... 12
8 Bibliography .................................................................................................................................. 20

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Acknowledgements

We would like to present our sincere gratitude towards our guide, Professor Pranav Garg for his
excellent guidance throughout the course of this project. The lengthy discussions in his office room
and Skype were the source of immense motivation for us, academic and otherwise. His unwavering
confidence in our abilities and his persistent encouragement made this journey thoroughly enjoyable.
We would also like to thank him for taking his time out even while he was several time zones away.

We would like to thank our friends and colleagues, Ayush Agarwal and Chaitanya Kansal, for the
numerous discussions we had on the topic.

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1 Introduction
“At 45, I’m being fearless once again. I’m stepping out of my comfort zone and into the minefield of
the young and restless … I want to end with saying I’m Befikar (without worry) in keeping with the
spirit of my film but honestly, I’m s**t scared!”

- Aditya Chopra, CEO Yash Raj Films (Groves, 2016)

The Hindi film industry (popularly referred as ‘Bollywood’) has been witnessing a transition since 2001
when the Government of India granted it “industry” status (IBEF Insight , 2013). While the movie
production part of the industry has been dominated by few clans and their associates, the last couple
of decades have seen various changes such as influx of foreign production houses as well.

The statement by Mr. Aditya Chopra, as he geared up for the release of his fourth directorial venture,
‘Befikre’, points to the risks associated with succeeding in this creative industry. His statement also is
also indicative of the pace of change in the industry—it requires even the well-established movie
makers to constantly evolve and adapt so as to stay relevant. Further, the industry has also witnessed
a reduction in the shelf life of movies over the years, increasing the risk associated with movies further.
Amidst all these changes, the path that Aditya Chopra has taken for Yash Raj Films (henceforth “YRF”)
necessitates a thorough strategic analysis.

The purpose of this study is to analyse the evolution of the strategy of YRF amidst the changes
discussed above. This analysis can provide interesting insights into the strategic choices which
production houses are making in business characterized by blockbuster economics. Our choice to
analyse YRF is explained in the next section.

2 Motivation
Yash Raj Films, one of the most prolific movie production houses in the Mumbai-based Hindi movie
industry, enjoys a dominant position among Indian production houses. Over its four-decade long
existence, its box-office record has been stellar—it has produced the maximum number of hits, super-
hits and blockbuster movies among all production houses (Exhibit 1). This has positioned YRF as the
marquee name in the industry.

The granting of official industry status to Bollywood unleashed a wave of corporatization and ushered
professionalism and modernization into an industry hitherto run mostly by family-owned production
houses. A number of Hollywood-based production houses have also entered Bollywood and invested
heavily during the last two decades (Sharma, 2014). At the same time, the compensation model
changed for star actors from a fixed fee to a revenue/profit sharing model (Nahta, 2012). Amidst all
these changes, YRF has managed to cement its position as an important production house in the
industry.

Its current position as an industry lynchpin is counter-intuitive given the competition from more
experienced and deep-pocketed foreign production houses, increasing star power, and shortening life
of movies. We seek to examine the strategic choices made by YRF and how the choices have
contributed to the success of the firm. In essence, we seek to understand the key dynamics that govern
a blockbuster-based industry and how can a firm establish itself as a central entity in a changing
environment.

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3 History of Yash Raj Films

The history of YRF is interlinked with its founder and a stalwart of Indian movie industry, Yash Chopra.
Yash Chopra was the younger brother of another giant of the Indian film industry, B. R. Chopra. The
duo made several movies together in 1950s-60s under the elder brother’s banner called B. R. Films.
Starting off by making movies about controversial social subjects that brought out the intricate
morality of relationships and questioned the anathemas of society, Yash Chopra decorated his movies
with melodious songs with strong female characters dressed immaculately. He commercialized his
movies using foreign locations and top bracket stars. While Yash Chopra’s portfolio of movies spanned
different genres, the genre of romantic movies became synonymous with Yash Chopra and has
continued to live as his legacy post his demise in 2012 (Ramnath, 2012). If his achievements as director
were staggering, his work as a producer was no less.

On his 39th birthday, 27th September 1971, Yash Chopra created a new banner called Yash Raj Films
(Dwyer, 2002). The separation of the banners was the subject of much speculation in the film press
during 1970 (Sing, 2012). Although there is no single version of the event, but it has been chronicled
as an emotional occasion for both the Chopra brothers (Pradhan, 2012).

“He gave me everything in the world that a brother could give. I never thought I’d ever live separately
from him but when a man gets married, he eventually feels he should have his own unit. It’s a very
natural desire, it’s not wrong.” - Yash Chopra

Both brothers held different views about cinema itself. While the elder considered cinema as a vehicle
for a social message, a tool towards an end, the younger thought of cinema as an end in itself!
(Pradhan, 2012)

He [B.R. Chopra] was always keen to make films with a message. If you’ve got nothing to say, why
make a film? I don’t have that in me. For me romance is also a great message. Even if it’s not a
message, I like to make a film on human relationships and romantic stories.”

-- Yash Chopra (Pradhan, 2012)

This statement provides an insight into the differing views that Yash and BR Chopra held towards
movies. Thus, starting Yash Raj Films was primarily Yash Chopra’s decision because at the age of 38,
he wanted to be his own person, produce his own movies, and make a distinct name for himself in the
industry. It is interesting to note that when he left BR Chopra to start his own production banner, he
was still on a salary and not a partner in his brother’s firm, but the desire to captain his own ship made
him take the plunge. His first production was the film Daag in 1973. Over the years, Yash Chopra
unearthed and nurtured new actors, composers, and singers, many of whom have gone on to great
heights in the industry. To be a part of a YRF film is a goal for creative or technical talent in the industry.

"It was like a dream come true. Working with him was more than an experience."

- Katrina Kaif, lead actress, Jab Tak Hai Jaan (IANS, 2012)

After establishing YRF, Yash Chopra directed only four movies for other production houses primarily
during the early days of production house (1973 to 1978). Similarly, from 1973 to 1995, YRF produced
16 movies, all but 6 directed by Yash Chopra (Exhibit 2). Thus, for almost two decades, Yash Raj Films
was a vehicle to finance and produce movies directed by Yash Chopra. The production house and the
director became synonymous, thus giving Yash Chopra complete creative control over every aspect of
movie making. It was only in 1995, when YRF launched Yash Chopra’s son Aditya Chopra with Dilwale
Dulhania Le Jayenge, a debutant director was launched by YRF. Post DDLJ, as the movie is fondly

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remembered, Yash Chopra handed the reins of the production house over to Aditya Chopra who began
the process of converting largely a one-man production house into a movie studio (Bhushan, 2009).

Thus, it can be said that it was Aditya Chopra who ensured the continuity of YRF into the post-
corporatization era of Bollywood. YRF morphed itself into a Hollywood-esque studio by expanding into
all aspects of movie business, from production to theatrical distribution to music, digital and more.
Under him, YRF scaled up from one movie every two years to almost three movies per year. YRF has
placed itself as a central entity in the movie business which captures significant value that the movies
produce, commands a dominant position vis-à-vis stars, and scouts and nurtures talent.

The subsequent sections of this report elaborate the evolution of strategy by identifying the choices
that made YRF successful and categorizing the choices into economic, strategic and organizational
advantage. Post that, interdependencies are identified between these choices which provide YRF with
superior competitive positioning in the industry and enable to command excessive surplus compared
to its competitors, both domestic and foreign.

4 Evolution of Strategy
The wheel of choices (Exhibit 3) highlights the journey of YRF from a boutique production house to a
studio led model. In effect, these choices have morphed an organization led by one individual (Yash
Chopra earlier or Aditya Chopra subsequently) to a professionally run multi-division organization. We
now breakdown the choices with economic, strategic and organization rationale and later identify the
interdependencies between them.

4.1 Economic Choices

4.1.1 Higher number of movies per year
The basic film production banner was established in 1971. The number of movies produced by Yash
Raj has risen consistently across the years. (Exhibit 4) The in-house production team has grown
gradually. Currently, they are producing 3-5 films annually, with a capacity of producing up to 6-7 films.
The aim is to reach production of 9 films per year under the YRF banner to ensure sizeable releases
each year and adequate diversity in terms of genre (YRF, 2016). This has been the central theme of
de-risking followed by YRF – to expand and diversify its portfolio considerably so as to minimize risks.

The movie production business is inherently risky as elaborated by blockbuster economics (Morris,
2012). Further, shortening of movie life means that chances of a hit or a miss are considerably higher
now. Since every movie is an independent draw with its own likelihood of success, releasing more
movies increases the likelihood of success at the overall studio level.

To substantiate this, we plotted the total revenue generated per year netted by total budget spending
per year. It can be seen that post the tumultuous year of 2007 (Das Gupta & Bhat, 2011), the average
income earned by YRF has increased significantly as compared to before 2007 (Exhibit 5).

4.1.2 Firm scope

YRF had been gradually expanding its scope from only movie production into other related businesses.
A major stimulus, which accelerated the process, came in 2007 when its big-budget movies failed
miserably at the box office. YRF earned only 10% return from four high-budget movies, down from
85% from three films in 2006 and 150% from three films in 2004. In 2007, big-budget films such as
Jhoom Barabar Jhoom starring Amitabh Bachchan, Abhishek Bachchan, Preity Zinta, Aaja Nachle with

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Madhuri Dixit and Laaga Chunari Mein Daag with Rani Mukherjee bombed at the box office. What
saved Yash Raj Films was the Shah Rukh Khan-starrer Chak De! India (Das Gupta & Bhat, 2011).

“Instead of making one movie for Rs 50 crore, you can now make 10 movies for that money. So your
risk of failure is distributed across more films. And with big stars and banners not being able to
necessarily pull audiences, it is a safe bet to stay afloat,”.

– Asish Patil, VP (Business) and Creative Head, YRF (Das Gupta & Bhat, 2011)

The table below shows the type of business and year of entry for YRF. The most important implications
of increasing firm scope are two-fold: de-risking of the business using a studio model through multiple
revenue streams and appropriating a larger share of the returns from each movie (project).
Table 1 Different division starting year for YRF

Subsidiary unit Year of Establishment

Film production 1971
YRF Distribution (for own and other prod. Houses) 1998
Home entertainment and music 2004
YRF studios and technical 2005
YRF Merchandise 2006
YRF Talent management 2009
Y-Films 2011
YRF Entertainment 2011
Yomix 2012
yFX 2016

In 1998, YRF ventured into film distribution. As we discuss later, entering distribution is a major
strategic choice that YRF has exploited to garner bargaining power over other stakeholders. Post 2000,
YRF expanded aggressively to increase its scope with the YRF Studio and Technical established in
2005.Error! Bookmark not defined. This was contrary to the common practice of outsourcing format
conversions, transfers and subtitle spotting requirements etc. Currently, YRF is equipped to handle
most of these in house under its subsidiary, YRF Technical. YRF also has an independent talent
management, VFX, merchandise, digital comics, home entertainment and music divisions. These
divisions allow YRF to increase its revenue base while also allow it to capture maximum possible value
from its movies.

Apart from increasing firm’s revenues, having these additional divisions accrue multiple strategic
advantages to YRF which are discussed later in the interdependencies section.

4.1.3 Ancillary streams

“Functioning for more than 40 years, Yashraj Films has produced stellar movies like Kabhi Kabhi, Silsila,
Dilwale Dulhaniya Le Jayenge, among others and what better way to keep the legacy alive than by
designing products bearing a YRF film's stamp in one way or the other. That was the idea behind
establishing YRF Merchandise division in 2006 - a natural extension to production of movies”

- Rohit Sobti, GM, Licensing and Merchandising, YRF (Behrawala, 2012)

One of its success story has been the marketing strategy employed by YRF to promote its Rs. 1.5 billion
extravaganza, Dhoom 3. Dhoom 3 brought a paradigm shift in merchandising revenues. YRF launched
children toys to motorcycle accessories to tap on ancillary stream as well as market the movie.

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Another category of merchandising that YRF is looking to tap is that of graphic novels through another
subsidiary, Yomics, which was started in 2012. This has been supported by the fact that YRF is
increasingly creating more and more movie franchises. YRF has been one of the earliest movers when
it comes to creating a franchise around its content with the latest addition being Ek Tha Tiger series.
Their most successful franchise has been the Dhoom trilogy. Emphasis on merchandising has helped
in this strategy as well.

“Movie merchandising brings three fold benefits to the producers,” First, it helps to promote the film,
second, it establishes the characters in memory extending a film’s life span with the possibility of a
sequel; lastly the all- important factor: “it brings revenue which is over and above the box office sales.”

– Rudrarup Datta, Head of Marketing and Production, Viacom18 (FPJ Bureau, 2014)

4.1.4 Franchise building

For the first thirty years of its existence YRF produced standalone movies, implying the story, narrative
and characters of one movie held no association with another movie. In 2004, learning from the
success of Hollywood movie franchises, YRF experimented with action packed Dhoom series. Dhoom
went to become a brand in itself akin to the fast and furious series. It became so successful that while
the first installation featured a new comer John Abraham, later franchise attracted Bollywood A-lister
Hritik Roshan and finally one of the mega stars of industry Amir Khan. Dhoom 3 went on to become
one of the most successful movies of all times. The franchise also opens up ancillary revenue as seen
from the Dhoom franchise.

Franchise building enables the company to capture more value as the brand recall is already high and
hence marketing spends are lower. It also de-risks the revenues of the company as a successful
franchise has its own fan base. Finally, it enables a better deal negotiation with exhibition theatres.

4.2 Strategic Choices

4.2.1 Forward integration into distribution
Yash Raj forward integrated into distribution of movies and has ramped up its distribution strength to
become the largest screens provider to any producer. YRF now distributes most of the big budget star
movies, irrespective of the production house. Exhibits 6 and 7 give the count of screens for the top
five movies (per number of screens) for the last five years. It can be seen that YRF was instrumental in
generating this high count for the industry.

Forward integration into distribution creates a couple of benefits for YRF. First, in an era where the
star’s power with regard to dictating terms of engagement with production houses is increasing,
forward integration provides effective counter to re-balance the bargaining power with stars. While,
in order to appropriate greater surplus, the stars are entering the production business, they need a
reliable distribution partner for greater screen footprint. YRF has placed itself neatly in this space and
has made itself non-substitutable for stars who want to distribute their own produced movies. One
example of such a deal is between Shahrukh Khan’s Red Chillies Entertainment and YRF for the
distribution of the former’s movies.

Second, forward integration becomes even more relevant given that the shelf life of movies is
shortening. Now, a hit or a miss is decided in the first weekend and sleeper hits have become a thing
of past. Any producer has to capture as much revenue as possible in the first week itself and for that
a distributor with greater reach is important.

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4.2.2 Talent management

2000s were a period of rapid change in Bollywood. With the government recognizing Bollywood as an
“industry”, it paved the way for foreign studios like Fox, Disney, and others to enter Bollywood. As the
studios burned money to attract stars for their movies, indigenous studios like YRF were left to devise
an alternate path. YRF experimented by producing non-star led, low-budget movies but met with
limited success (Das Gupta & Bhat, 2011). This strategy was a definite departure from its success recipe
in the 1980s and 1990s that involved making movies with star actors.

YRF adopted a strategy of scouting talent, recruiting and nurturing it, and locking it in with a multi-
year movie deal. YRF established Yash Raj Talent as a separate division under the leadership of its
former marketing head with a mandate of nurturing the next generations of Khans, aka the megastars.
YRF manages these new actors right from movie selection to brand associations – giving the actor 360-
degree management while ensuring an exclusive contract with YRF. New actors pay a share to YRF
even for a commercial that they do – quite a reversal of bargaining power vis-à-vis the star actors.

It is not just the creative talent that YRF locks in, the technical talent also has a multitude of reasons
to stay put at YRF. It is long rumoured that YRF pays its talent below industry standards but provides
them with the best in class, state of art infrastructure (recording rooms etc.) which becomes a superior
playing ground for many creative artists. While such rumours may or may not be true, actors, directors
and creative staff are not bothered about remuneration while working with marquee brand such as
YRF as the association itself adds value to the individual.

“I’ve been paid the most by Yash Raj (for Fanaa and Rab Ne Bana Di Jodi). They also give you the best
equipment and space in which to perform. Once you work with them, it’s difficult to work with others.”

- Ravi K Chandran, Director of Photography, Black and Dil Chahta Hai (Baliga, 2009)1

Aditya Chopra started nurturing individuals who can produce movies as well. This considerably
reduces the pressure on the managerial bandwidth of Aditya Chopra and enables YRF to increase its
number of movie releases per year. Here again, the opportunity to associate with YRF attracts many
industry people who want to become producers.

“I get financial support from YRF, besides the marketing and distribution, not to mention production
and technical staff. I don’t invest my money in the project or any other film that I produce, and yet, I
have a three-film contract with the company, with the clause of profit sharing. It’s a win-win situation
for me, as without the headache of running a company I get to be a producer.”

– Maneesh Sharma, in-house producer, YRF (Sahgal, 2014)

4.2.3 In-house Marketing

YRF centralized the marketing function and established the marketing department under Tarun
Tripathi in 2004, who had just graduated from IIM Lucknow in 2002. The journey to use segmenting,
positioning and targeting were employed to movie making; the first output of this exercise Hum-Tum
stood out in the crowd of me-too movies and appealed to certain segment of audience only – primarily
metro and tier-1 female audience (AMANPREET SINGH, 2004). The film didn’t do well in rural circuits,
but churned enough money from the urban areas – thus paving the way for customer oriented movie
making and marketing approach.

Further, in the age where too many brands are competing to capture audience attention, it is further
more important for show business to not just create buzz regarding a movie, but create compelling
reasons in product and marketing for the audience to come to theatre and experience the product.

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With years of experience in designing and communicating the value proposition of movies or web-
series, the marketing function enjoys a learning curve advantage which enables them to improve the
marketing mix with every movie, thus producing superior results. It is an assembly line churning out
movies continuously.

It also enables YRF to quickly adapt to upcoming digital channels, experiment and improve their
communication strategy.

“Today, consumers respond instantly to content that is put out there and interaction is the key for us.
You get to know immediately if the content is being ‘liked’ or not, which opens up the possibility to
tailor your marketing campaign on the go with a quick turnaround time”

- Anand Gurnani, President, Digital, YRF (Pitch, 2012)

4.3 Organizational Choices

4.3.1 Organization Structure and Processes
The one-man production house of Yash Chopra now employs a mixture of a functional and division-
led organization structure under Aditya Chopra (Exhibit 8).

The credit for converting a one-man production house into a studio goes to Aditya Chopra. He took
over the reins of YRF soon after his directorial debut in 1995. He expanded YRF, set up distribution
houses abroad, took hold of domestic distribution, set up a music studio, home entertainment division
and studio facilities. The idea was to build all the facilities which could help YRF cut its costs and realize
full value from its creation. The state of the art YRF studio offers filmmakers a one stop shop where
every aspect of film making is addressed under one roof from ideation, script writing to post
production. As a result, YRF is able to hire creative talent at a much lower cost than others – so eager
are actors, technicians to work with the banner.

The independence provided to the film makers working under the banner of YRF, who otherwise have
to depend on outside finance and rapacious producers, has also been a key advantage to the studio
model. This increases the bargaining power of YRF studio significantly.

“At Yash Raj Films they go to the extent of telling you, ‘Don’t feel the pressure of commercial
considerations; just follow your vision” says director Kabir Khan (Baliga, 2009)

The idea behind the studio model was primarily to cut the overall costs in filmmaking motivated by
declining returns which YRF experienced for a few years. The studio model also helped YRF increase
its bargaining power in the industry which has been driven by the supremacy of star actors.

“Yash Raj Films is almost a university of filmmaking, with legendary expertise. Aditya Chopra had a
vision of creating a youth studio label concentrated on youthful movies.”

- Ashish Patil, Business & Creative Head, YRF (AFAQS News Bureau, 2010)

4.3.2 Leadership
The evolution of YRF has had deep imprints of the vision of the father-son duo – Mr. Yash Chopra and
Mr. Aditya Chopra. Yash Chopra started the production house in 1971 as an attempt to express himself
in the film fraternity, to run his own ship. For the next 20 years, the banner saw many highs and lows
but worked as a one-man production house. It was Yash Chopra’s vision which formulated the YRF
stamp of quality.

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“He is a film-maker of very deep conviction who has never compromised on his basic cinematic values
— dignity, literary value and a sense of aesthetics.” says Mr. Javed Akhtar, who has worked with Yash
Chopra on multiple successful projects like Deewar. He goes back to the time when Yash Chopra’s
career hit a low during the days of ‘Sarkailo Khatiya’ and ‘Choli Ke Peeche’: “Many self-respecting
directors got carried away by that wave. But not Yashji. He preferred to be marginalized rather than
succumb.” 1

Aditya Chopra took over the reins of the banner post his directorial debut, Dilwale Dulhaniya Le
Jayenge, in 1995. This resulted in a complete shift in the way the production house was run. The film
industry was changing rapidly and Aditya understood the limitations he faced as a creative film maker.
He realized he cannot be at the centre of creativity at YRF. He needed to on board more writers, film
makers, technicians under the banner of YRF to increase the number of films made under the YRF
banner. Thus the YRF production house evolved to its present form of YRF studio. This also helped
Aditya in exploiting the full value of their creation.

“Yash Raj has a simple mantra — money spent should show on the screen; it should not be used for
fluff off the screen. That’s why a Rs 25 crore film from Yash Raj looks like a Rs 40 crore film while the
reverse is true for many other producers.”
- Kabir Khan (Baliga, 2009)

Thus in effect, it’s the contrasting passions and world-views that these two individuals have that has
led to path dependence in evolution of YRF’s strategy. While Yash Chopra made movies out of his
passion, Aditya Chopra morphed the boutique production house into a successful studio combining
the legacy and inheritance of his father and his own business acumen.

The role of the external environment in shaping this strategy cannot be ignored. Faced with tough
challenges of corporatization and increasing stars’ bargaining power, Aditya Chopra has daftly used
his father’s relationships to bring stars on board while simultaneously scouting and locking the
potential stars of the future. While the vision of Yash Chopra was to make movies that highlight human
dilemmas and power of relationships with utmost attention to the aesthetics of movies, the new laid
out vison of YRF under Aditya Chopra is “from speaking to Indians all over the world to reaching out
to a global multicultural audience”

5 Interdependencies among the choices

The above mentioned choices have great strategic interlinkages which we identify and expand in this
section (Exhibit 9).

YRF’s foray into distribution provides them with risk reduction and diversification benefits – it
increases the firm’s bargaining power vis-à-vis stars as YRF has consistently provided highest number
of movie screens. In an era of shortening life cycles of movies, achieving a grand opening is a necessary
condition that no star can do without for his movies.

The higher number of movies produced per year aids in further cementing the benefits from
distribution. More number of movies allows YRF to club star-based and non-star-based movies
together as a deal to theatres.

YRF also has an in-house marketing department and spends a greater share of movie’s budget on
marketing utilizing innovative marketing tools. YRF is invariably successful in creating a buzz around
the movies it produces which further helps attracting the attention of the audience. The marketing
machine also helps attract newer talent for the talent management function, as the creative talent is

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lured with multi-film deals and wants to be associated with a production house with proven marketing
prowess.

The ability to provide a multi-film contract to upcoming stars to lock them in the YRF ecosystem
accrues from the greater number of movies that YRF produces. One should also add the YouTube
movie series produced by Y-Films and the number of performance opportunities for new talent
increases considerably.

Increasing the number of movies increases the chances of creating a hit which is later turned into a
franchise (i.e., multiple sequels). YRF already boosts of India’s most successful franchise Dhoom. This
franchise which started with practically nobodies in the movie industry, became so successful that
megastar Aamir Khan came on board for Dhoom 3. Hence the increased number of movies increases
YRF’s ability to attract talent and decrease the star power that that likes of Khans yield. Increased
number of movies also facilitate the back-end processes as the technical talent including the
marketing department enjoys economies of scope and learning curve advantages. Thus YRF is able to
extract greater value per rupee spent on technical aspects of movies.

In effect, all these activities increase the firm’s scope, which increases the complexity that the
company faces. With higher pace of change in the external environment aided by continuous
innovation in digital technology, YRF’s organization structure has evolved into a complex functional
structure. The core functions of production, distribution, technical, marketing support both film
production unit as well as Y-Films.

To arrive at this organization structure, Aditya Chopra had to scout for talent within the movie
industry as well as outside it. Akshaye Widhani (Head, YRF Studios), for instance, was a banker in
New York, and had two offers from India — one from ABN Amro and the other from Yash Raj Films.
He was pretty clear that he would not join a film company but Aditya Chopra convinced him over a
two-hour meeting. Ashish Patil (Head, Y-Films), likewise, has was an industry veteran who came on
board from MTV (Das Gupta & Bhat, 2011).

6 Conclusion
With the analysis of Yash Raj Films, we have tried to understand how a one man led production house
has morphed into a full-fledged studio and a force to reckon with in Bollywood. We have also tried to
elucidate how a firm, in a blockbuster economy, goes from a mere creative acumen supplier to a
consolidator of diverse creative acumens - in essence, how it goes from being a creative to a creative
plus business entity. The impact of the above mentioned choices is clearly understood in the Exhibits
10, 11, and 12 where it can be seen that YRF produces superior performance than other production
houses, be in terms of higher footfall per movie or extracting the most in the first week (first week
collection as % of total gross) or gross revenues collected per footfall. In the end, we have analysed if
the above mentioned seemingly independent choices in isolation were not truly independent in
collection. It is by understanding the interdependencies of choices, one can truly understand the
impact of choice that Aditya Chopra took in 1990s and 2000s – to turn the boutique production house
of his father into a Hollywood-esque studio!

11
CCS - Yash Raj Films: Evolution of Strategy

7 Exhibits
Exhibit 1. Success rate of various production houses

Hits
(ATB +
Hit
Releas Super Semi BB +
Name ATB BB Hit Rate
es Hit Hit Super
(%)
Hit +
Hit)
Nadiadwala 20 0 1 3 7 0 11 55%
Grandson
Entertainment
Shree Ashtavinayak 17 0 2 0 5 2 9 53%
Cinevision Ltd.
Yash Raj Films 52 2 7 5 7 6 27 52%
Dharma Productions 30 1 2 2 6 3 14 47%
Pvt. Ltd.
Balaji Motion 25 0 0 2 4 3 9 36%
Pictures
Tips Industries Pvt. 25 0 1 3 2 2 8 32%
Ltd.
Fox Star Studio India 32 0 0 1 7 2 10 31%
Pvt. Ltd.
Excel Entertainment 16 0 0 0 3 2 5 31%
UTV Motion Pictures 81 1 4 4 6 9 24 30%
Eros International 69 1 1 0 11 7 20 29%
Vishesh Films Pvt. 43 0 2 4 2 4 12 28%
Ltd.
Viacom 18 Motion 42 0 0 3 4 3 10 24%
Pictures
Mukta Arts 17 0 0 1 0 3 4 24%
T-Series 28 0 2 1 2 1 6 21%
Reliance 33 0 1 2 2 2 7 21%
Entertainment
Venus Records & 22 0 0 0 3 1 4 18%
Tapes Pvt. Ltd.
Ram Gopal Varma 23 0 1 0 1 2 4 17%
Productions
Puja Entertainment 25 0 0 4 0 0 4 16%
Ltd.
Percept Picture 26 0 0 1 0 1 2 8%
Company

Source: Box Office India website

12
CCS - Yash Raj Films: Evolution of Strategy

Exhibit 2: Movies produced by YRF from 1973 to 1993

Year Number of Movies Produced Directors

1973 1 Yash Chopra
1976 1 Yash Chopra
1977 1 Ramesh Talwar
1979 2 Yash Chopra, Manmohan Krishna
1981 2 Yash Chopra, Dilip Naik
1982 1 Ramesh Talwar
1984 1 Yash Chopra
1985 1 Yash Chopra
1988 1 Yash Chopra
1989 1 Yash Chopra
1991 1 Yash Chopra
1993 3 Yash Chopra, Naresh Malhotra, Deepak Sareen

Source: Box Office India website

Exhibit 3: The choices made by Yash Raj towards a studio model

Figure 1 Choice wheel of YRF towards a studio model

13
CCS - Yash Raj Films: Evolution of Strategy

Exhibit 4: Number of movies released by Yash Raj Films per year

Count of Movies Per Year - Yash Raj

6

0
199319951997200020022004200520062007200820092010201120122013201420152016

Source: Box Office India website

Exhibit 5: (Total Net Gross – Yearly Budget) for Yash Raj Films

Total Net Gross - Total Budget (Rs. M)

1,600
1,400
1,200
1,000
800
Post 2007
600 Rs. 475M
400
200
Pre 2007
Rs. 325M
-
1991 1996 2001 2006 2011 2016

Total Net Gross - Total Budget Average

Source: Box Office India website

14
CCS - Yash Raj Films: Evolution of Strategy

Exhibit 6: Average screen size comparison: YRF and others (top 50 banners)

Average Screens during Release - L5 years

3500 6

3000 5
2500
4
2000
3
1500
2
1000

500 1

0 0
2012 2013 2014 2015 2016

Others Yash Raj Number of YRF movies

Per Movie Avg 2012 2013 2014 2015 2016 Average Std Dev p-
Screen Count Screens Screens value
Others 1477 1579 1692 1987 1697 1686 171 0.0006
Yash Raj 2250 1681 1850 733 3317 1966 839

Source: Box Office India website

Note: Others refer to all the production houses as mentioned in Exhibit 1 expect YRF

Hence YRF has been able to capture significantly higher number of screens compared to other
banners during the last five years.

15
CCS - Yash Raj Films: Evolution of Strategy

Exhibit 7: Top 5 movies by number of screens – 2012 to 2016

2016 2013
Movie Screens Distributors Movie Screens Distributors
Sultan 4350 Yash Raj Dhoom 3 3650 Yash Raj
Dangal 4250 Walt Chennai 3600 UTV
Disney Express
M.S. Dhoni - The Untold Story 3900 Fox Star Krrish 3 3500 NA
Housefull 3 3650 EROS Besharam 3400 Reliance
Fan 3450 Yash Raj Race 2 3200 UTV
2015 2012
Movie Screens Distributors Movie Screens Distributors
Prem Ratan Dhan Payo 4200 Fox Star Dabangg 2 3400 NA
Bajrangi Bhaijaan 4100 EROS Ek Tha Tiger 3200 Yash Raj
Brothers 3400 NA Rowdy Rathore 2800 UTV
Welcome Back 3200 EROS Khiladi 786 2750 EROS
Dilwale 3150 Yash Raj Housefull 2 2650 EROS
2014
Movie Screens Distributors
Happy New Year 3850 Yash Raj
Kick 3800 UTV
Jai Ho 3700 EROS
PK 3600 UTV
Singham Returns 3500 Reliance

Source: Box Office India websiteExhibit 8: Organization structure of YRF

16
CCS - Yash Raj Films: Evolution of Strategy

President and CEO

Aditya Chopra

International Mktg and

Digital Production YRF Studios Entertainme
Distribution Operations Y-Films Mechandise
Anand Aashish Akshaye nt and Music
Sahdev Ghei Avtar Ashish Patil Manan
Gurnani Singh Widhani Vijay Kumar
Panesar Mehta

Source: From the official board database (theofficialboard.com)

Exhibit 9: Interdependencies

Figure 2 Interdependencies in YRF strategy

17
CCS - Yash Raj Films: Evolution of Strategy

Exhibit 10: First weekend gross as % of total gross (YRF vs others i.e., the top 50 banners)

First weekend gross as % of total gross

90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Grand
Total

Others YRF

Source: Box Office India website

Note: Others refer to all the production houses as mentioned in Exhibit 1 expect YRF

Exhibit 11: Footfall per movie (YRF vs others i.e., the top 50 banners)

Footfalls per movie

60000000

50000000

40000000

30000000

20000000

10000000

0
2006

2011
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005

2007
2008
2009
2010

2012
2013
2014
2015

Footfall per movie Others Footfall per movie YRF

18
CCS - Yash Raj Films: Evolution of Strategy

Source: Box Office India website

Note: Others refer to all the production houses as mentioned in Exhibit 1 expect YRF

Exhibit 12: Total gross per footfall (YRF vs others i.e., the top 50 banners)

Gross per footfall

140
120
100
80
60
40
20
0
1998
1993
1994
1995
1996
1997

1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Gross per footfall Others Gross per footfall YRF

Source: Box Office India website

Note: Others refer to all the production houses as mentioned in Exhibit 1 expect YRF

19
CCS - Yash Raj Films: Evolution of Strategy

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