Prateek's Musings

First Exposure to F1

I started following Formula 1 for a brief period in my childhood during the final years of Michael Schumacher's championship streak, only to get back during the pandemic when the topic came up while speaking to a close friend. Thanks to a reasonably priced Hotstar subscription, decent internet connection and a new-ish TV at home, I followed the sport through the COVID-19 stricken 2020, controversial 2021 and one-sided 2022 seasons. Then life happened, I moved to another city for work and lost access to all of these, only to be limited to highlights on YouTube.

While OTT subscriptions and binge watching took a back seat, I started watching movies on the big screen more frequently. From not watching a film in theatres for years together as a child, I now watch at least one movie a month on average in theatres. So when I saw my current and previous pastimes come together, I knew I was in for something special.

Synopsis and Credits

F1 is the story of Sonny Hayes (Brad Pitt), a former Formula 1 driver who is forced to leave the sport thirty years ago after a horrific crash, post which he spends a decade on gambling and failed relationships before embarking on a journey of making one-off appearances in different types of car racing events across the United States. After one such appearance, Sonny is approached by an old friend and former F1 driver Ruben Cervantes (Javier Bardem), who has bought a team named APX GP. After failing to score points for two and a half seasons and the imminent risk of a fire sale; Ruben offers Sonny a seat to save the team and fulfill his long lost dream of winning an F1 race.

The movie is directed by Joseph Kosinski, who last made Top Gun: Maverick in 2022, the sequel to the 1986 film Top Gun starring Tom Cruise. Joseph co-wrote the story with Ehren Kruger who wrote the screenplay. Kosinski also served as producer alongside Jerry Bruckheimer, Brad Pitt and seven-time F1 world champion Sir Lewis Hamilton among others. Hans Zimmer provided the soundtrack, while Kosinski's regular collaborator Claudio Miranda is the cinematographer.

Watching in IMAX

For the uninitiated, IMAX is a specialised projection standard with one of its key features being a taller aspect ratio (1.43:1 or 1.90:1) than the usual scope aspect ratio (2.39:1). F1 has been filmed for IMAX, hence it only made sense to watch the film on an IMAX screen.

Thankfully, the Mumbai metropolitan region has 6 theatres equipped with IMAX screens, spread pretty well geographically. Each screen has different projection and audio configurations, which results in a slight difference in their overall quality. Kaustubh Debnath aka KDCloudy has a Google sheet with the specifications of all the IMAX screens in India, which informed me that PVR ICON at Phoenix Palladium in Lower Parel could provide the best experience, with its Commercial Laser projector and 12 channel audio.

This wasn't my first time watching a film in IMAX, but I had started very recently. It started in December last year, when I watched Pushpa: The Rule at the newly reopened Miraj Cinemas at Wadala. Later in February this year I caught the re-release of the iconic Interstellar at the equally iconic EROS Cinemas in Churchgate, and later returned to Miraj Cinemas to watch Mission Impossible: The Final Reckoning. While the audio-visual experience at both venues was amazing, it couldn't match the experience at the Phoenix Palladium PVR.

Thoughts About The Movie

I went in with high expectations in terms of watching the cars on track, and pretty low expectations with respect to nuanced story telling and character development, and I was not disappointed one bit. It is the perfect popcorn entertainer to be experienced on the big screen, and kept me engaged from the first frame to the last. The film has the expected sports drama trope of redemption, but it doesn't resort to melodrama and sticks to tension.

The visuals of the races were breathtaking to say the least. Although it's unfair to compare the technical standards of Indian films with tentpole Hollywood films produced by the big studios, I was pleased by how realistically they were able to blend the APX GP drivers battling it out on track with the real world F1 drivers. The soundtrack is rousing, the theme especially is fairly simple but extremely catchy, and so were some other tracks.

Brad Pitt as Sonny Hayes really stole the show amongst all the actors. His character has a lot of baggage - a massive crash that all but ended his career at his prime, a gambling addiction that manifests itself with his racing tactics, multiple failed relationships that reflect in his professional choices. But Pitt stays true to the genre and channels the swag and passion for driving for the most part, only showing glimpses of vulnerability here and there.

Damson Idris gives an earnest performance as Joshua Pearce, Hayes' younger teammate who is talented but inexperienced, and also pretty scared about the possibility of losing his place on the F1 grid if his team sinks. Kerry Condon plays technical director Kate McKenna, whose character is pretty important in the whole scheme of things, but is unfortunately subjected to some of the commercial cinema tropes. No complaints though.

Coming back to the racing, it is pretty accurate for the most part. There are obvious cinematic liberties, and a couple of them are pretty outrageous for ardent F1 fans. There is an incident that happens in one of the races that could end very differently in real life. In an earlier race, the tactics employed by a driver result in a very light penalty than what would be meted out in the actual sport. But these act as plot devices and keep you at the edge of your seat rather than take you out of the film.

Final Thoughts

If it's not become obvious by now, I highly recommend watching this film watching this movie on the big screen, especially on a 4K LASER IMAX screen for the best theatrical experience. If you are an F1 fan, you will get the rare experience of watching these machines on the big screen. If you don't follow F1, you still get a thoroughly engaging commercial movie experience.

My "Bridge-Burning" Moment

A little over two years ago, a desparate situation led me to take up my recent role - in an industry I knew nothing about but had begun to hate as a consumer, in an organisation that wasn't the most sought after, and in a team that was just getting formed. I put my haeomoglobin-rich blood, profuse sweat, hard-to-come-by tears, receding hairline, recently stabilised sleep schedule and poor metabolism on the line, and managed to scrape through for a while.

A few months ago, I got the opportunity to repeat most of this in a new role. I had already spent more time in this role than my previous two, and I wanted to do something totally different, so I tried my luck and got through.

And then came the time to have the "talk" with my manager, who himself had been asked to take up another role in the organisation. My breaking of the news met with a series of emotions - denial, betrayal and anger being the first ones to surface. These were followed by a mix of carrot and stick statements like "we were planning to give you a bigger role", "you are nullifying everything you have done so far", "I can stop you but I'm choosing not to", "you shouldn't have burnt bridges like this" etc.

I did not budge despite attempts from multiple people to convince me, and the change finally went through after an agonisingly long period of time, thanks to some prompt talented rangoli artists who also design talent management policies when they are out of rangoli powder.

Temporal Changes In Career Choices

My late maternal grandfather was a State Government officer, and spent his entire career working for them. My father started off as a State Government employee for a few years, but soon joined a Municipal Corporation where he worked for 25 years until his superannuation. Many of my friends' parents working in the private sector also spent their entire career with the same company.

Today, I know someone who just took up a lucrative new role abroad just two months after they had joined their current role, after spending under two years in their previous role. I have friends who went from being employees to founders to artists!

Coveted public sector jobs are unmatched in terms of pay and perks when compared to roles with private companies that don't look for extreme levels of exclusivity. When you want to get done with your education loan at the earliest and get a home loan to buy a home for your family, you want to earn more money as soon as possible; and the easier way to make that happen is to switch jobs often.

Movers and Shakers

When people in junior or mid-level positions decide to switch jobs, they will mostly put in their own effort to find a suitable role, prepare for it and go through the evaluation, negotiation and verification process to land it. But I also learned that when some people in leadership roles move, they prefer taking their junior subordinates along to hit the ground running immediately. The junior employee in the first case is a "mover", but I would label the senior leader in the second case a "shaker", because they could shake up an entire department or even a business unit if they take a lot of people along.

From the point of view of the junior employee in both cases, the first case demands a lot of time, effort and a bit of luck; while the second doesn't as much. Doesn't it also make the second move a little less meritocratic?

The Flavour of A Favour

Don't throw your dictionaries at me, but isn't a favour something done with an expectation of a similar action in return at some point in the future? So, if your boss offers you a role in his new team at their new organisation, who is doing the favour and when will they consider it to be fulfilled (probably not the right word but you get what I mean)?

Both of you save time needed for discovery, and expect things to continue the way they were as soon as your partnership kicks off again. Unfortunately, many of the remaining variables in the equation change, and the result might end up being underwhelming for both.

If you go in knowing unexpected things could happen, you end up being better prepared to handle most surprises that will come your way. This might result in some honest extra effort which will not go unnoticed if the results are good.

To Each Their Own

A popular quote in Marathi by a spiritual leader (Late) Sadguru Wamanrao Pai roughly translates to - "You are the only person responsible for how your life shapes up." If you accept a favour, you are bound by expectations of loyalty and certain levels of output. Meeting or even exceeding expectations is a reflection of your competence and your efforts, and deserves rewards. Expecting loyalty however is stupid, and so is being bound by such expectations. Professional aspirations are always individual.

You could spend a lot of time and effort getting another job, but that will be of your own volition. Sticking to your current job will also be your own choice. In both these cases, you would be prepared to handle the good and bad outcomes, without attributing them to someone else.

If you do choose the second option, treat it like the first one. Expecting something extra will only lead to disappointment and pain.

My Perception Of Sales

In my pessimistic view, sales is the process of fooling someone into spending money to buy something that just barely meets their requirements. This happens for a number of reasons. A salesperson might not possess enough knowledge about the product/service offerings they have been hired to sell, which results in them selling something which either falls short or seems overkill for the customer's requirements. Another salesperson might not have the ability, time or willingness to understand the customer's requirements. And then there's another person who wants to earn maximum incentive with minimum effort, and just focuses on selling those products/services that serve this purpose.

Are All Products Differentiable?

My retention of marketing concepts is zero, but I believe product-market fit is at the top of the agenda for marketing managers and product managers. Some industries have limited scope for customisation and by extension feature-based differentiation. My limited experience in banking has led me to believe that banking products targeted towards retail customers are pretty much the same. E.g. most banks will offer a normal savings account with similar interest rates and add-ons like debit cards, redeemable reward points and so on; alongside special variants for kids, females, senior citizens etc.; followed by multiple tiers of membership-based premium offerings with wider range of add-ons and privileges. The reasons for that could include financial viability and regulations among others.

The Conundrum Of Human Capital

Irrespective of the increased use of telesales, adoption of digital marketplaces and evolving abilities of virtual assistants, sales will remain a personal process involving actual salespeople in flesh and blood. In banking and financial services, there are outbound sales personnel who reach out to customers to identify prospects, generate leads and close them successfully; and inbound sales personnel who largely engage in lead generation by getting referrals for new customers from existing ones, or pitching more products/services to existing customers.

Revenue is the product of number of customers, product holding per customer and revenue per product. Companies have to expand the footprint of their salesforce and boost their average productivity to maximise both customer and product sales count. Hiring more salespeople costs money and time which could go into other revenue generating activities, hence it is largely handled by people in non-revenue generator roles, i.e. HR personnel. Salaries in India are obviously lower than those in developed countries, but from an informal survey of the salaries of frontline sales personnel across leading private sector banks in India, I observed that salaries are even lower than those offered by the WITCH companies. This also lowers their switching costs and makes it easy to jump from one job to another, driving up attrition, resulting in more hiring and more costs.

Productivity is also linked to hiring. HR personnel cannot possess the same level of functional understanding as the experienced hiring manager. To paraphrase the words of Prof. Sunil Maheshwari, the current Alumni and External Relations Chairperson at IIM Ahmedabad, hiring has become more about certificates over competence. Competence is extremely difficult to evaluate, and competence evaluation cannot be scaled up for large batch sizes. As a result, most folks who end up getting hired are misfits who don't possess the ability and drive to learn and grow. A smart salesperson would understand their incentive structure in and out, and identify ways to maximise their incentives; but these misfits won't even be able to do that. All this puts an invisible ceiling on the optimum productivity level which could only be reached or breached if the hard-working folks overachieve by huge margins, creating that pareto effect of 20% of the salesforce bringing in 80% of the revenue.

Processes Exist, But Are They Effective?

One component of the hiring cost is the cost of organisational onboarding and functional training. Organisational onboarding aims to introduce a new employee to the organisational hierarchy and structure and provide information about standardised processes followed across the organisation. Functional training enables the employee to become a productive salesperson by providing them knowledge about the product/service suite and directions for utilising various technical and non-technical systems for sales and performance tracking. Unfortunately, it is common for a lot of new employees to either completely miss these programmes, or have only a physical/digital presence with no attention. This is either because of the employee themselves taking things lightly, or their managers expecting them to start working from the first day instead of wasting time attending these programmes. Those mandatory quizzes with minimum passing percentages also get easily tackled with freely circulated answer keys.

The outcome of all this is that a salesperson starts working with incomplete knowledge, encounter more obstacles and end up getting solutions from senior colleagues who themselves got them from someone else rather than a standard operating procedure or a policy document, ending with a lose-lose situation for all parties involved. The customer feels cheated because they are provided incomplete and inaccurate information by the salesperson. The salesperson underperforms because they wasted time seeking help on a straight forward non-issue. The company loses revenue due to lower sales productivity, lower spread of the mis-sold product/service and potential future revenue due to loss of goodwill.

Non-adherence to standard operating procedure by some professionals like doctors and law enforcement professionals could be labelled anything from unethical and immoral to criminal, but the same gets an almost free pass and is even occasionally encouraged for salespeople. It might be foolish to except a salesperson to be as selfless as a soldier serving on the border, but the least that can be expected from them is upholding ethics. But if we want to ensure that a salesperson doesn't give the excuse of committing a mistake inadvertently, robust fail-safes need to be built into the processes themselves and the systems they utilise.

Moving On From Legacy Systems

A few years ago, I worked with a small software company which made web-based trading information exchange platforms for private banks (buy-side firms engaged in investing HNI money) and investment banks. These platforms were built on almost end-of-life versions of software building blocks, and hosted on oldest stable versions of server operating systems, and that really puzzled me. A conversation about this with a friend made me realise the principle behind this - Don't fix something if it ain't broken.

There is no point inconveniencing an end user for something that will change the current UX for the worse. But looking inwards, upgrading and modernising the backend systems will only make platforms more scalable and easy to maintain, and also eliminate the dependence on legacy stuff that could go beyond maintenance and debugging any minute. This doesn't mean that companies should adopt cutting edge beta tech either, but finding a middle ground between cutting edge and end-of-life software building blocks and infrastructure.

Conclusion

Passing the responsibility from people to standardised processes and scalable systems will free up the time of salespeople and boost their productivity. This productivity boost might lead to less employees feeling burnt out or misfit, enable them to earn more incentives and scale up business performance as a result. Organisations could become leaner and employees could expect better career progression. Standardised processes will improve customer experience and encourage referral, meaning more customers will buy and use more products from the company. Lower employee costs and predictable revenue streams will culminate into sustained long-term profitability both at the macro level and even in terms of unit economics.

My Connection With Films

As a fat kid with very few friends, watching TV was my only pastime. While I watched cartoons alone on most school afternoons, watching the World Television Premiere of some successful films on a Sunday evening with my parents is a core film-viewing memory. It was only after I stepped into adulthood that I started visiting theatres more often to watch a few films, and for the rest I relied on my hostel room's Wi-Fi connection and my experience of using torrents.

Sizing India's film business

With more than 10,000 theatres across the country, revenue from theatrical film exhibition in India are projected to reach INR 384 billion in 2024 and cross INR 512 billion in 2029 (Source). This number is miniscule compared to USA and China, but makes sense in the context of India's connectivity, technological penetration, disposable income and entertainment preferences.

Anecdotally, Indian film industries churn out scores of film every year, however their budgets and scales have been fairly modest. This trend has drastically changed in the last decade due to global critical acclaim and financial success attained by films like the Baahubali duology and Dangal. The stupendous success of the magnum opus RRR at the Oscars and Golden Globes have definitely put Indian films on the map of world cinema.

Business Model Of Films By Dummies

There are three key aspects of the business of filmmaking - production, distribution and exhibition. Production encompasses selection of the base story or concept of the film, hiring or selecting writers to expand it into a screenplay with dialogues, hiring or selecting the director and other technicians, casting actors, readying the inputs required for filming, shooting the content and then enhancing the content with dubbing, re-recording, background score, DI, VFX+CGI and other activities.

Distribution involves the sale of audio and movie streaming rights to respective platforms, television rights to a TV network and sometimes dubbing rights to a specialist company. Production companies aim to recover the production costs and earn some profits through these sales. As the production company sells various rights, they decide upon a date for the theatrical release of the film in consultation with the industry's producer and distributor governing bodies, and streaming release dates with their partner platform. The extent of preferential treatment given to a film in setting a release date is directly proportional to the value of its theatrical and streaming rights, which is linked to the film's budget.

Distributors prepare for theatrical exhibition of the film by signing agreements with theatre owners and multiplex chain management. These agreements outline the number of shows, ticket prices and revenue share between the distributors and theatre owners. Andhra Pradesh, Telangana and Tamil Nadu have a cap on ticket prices; although the former two states allow this cap to be raised for some films with prior permissions from the Government.

Sustainable Scaling Of Film Production

More and more films with bigger budgets are being produced every year, as production companies and directors look to bring together ensemble casts, utilise modern technology and creating multi-verses of characters, akin to the Marvel and DC Cinematic Universe from Hollywood. However, reports suggest that the lead actor's salary is the biggest cost incurred during the production of a star-led film. These salaries are market-driven, and both producers and distributors know that stars can single-handedly bring in massive footfalls and theatrical revenues in the release weekend itself, thereby ensuring that the distributors break-even on their investment at the earliest.

However, a film's financial success is hard to predict because it depends on the its reception and the performance of other films released during the same period. In situations where films severely underperform, actors have ended up part of their salary to compensate the producers and the distributors. Therefore, it makes more business sense for the sought after stars to adapt the profit-sharing model and divide their salary into a fixed component proportional to the number of days they allot for a film, along with a variable component linked to the theatrical revenue and the value of the streaming rights sales.

The Inevitable Intervention Of Streaming Platforms

When the COVID-19 pandemic brought the world to a standstill, people sat up and took notice of streaming platforms. The massive influx of viewership emboldened them to sign exclusive deals with production companies to release films directly on their platform instead of theatres, giving them a lifeline and a way out of the accumulating interest.

While initial deals were pretty much always a win for the production companies, platforms have grown enough to enforce their terms and even revise the terms depending on a film's theatrical success and initial viewership garnered on their platform. I am not aware of the depth of their analysis of a film before signing or revising a deal, but it is a lesson that production companies could imbibe to choose whether to produce a film and decide the resource allotment and the scale of the publicity campaign and theatrical release.

The Not-so-Slow Death Of Cinema Theatres

If you are at least a 90s kid, you might remember the theatre where you watched a film for the first time. For most people, it is a single screen theatre that might have become defunct or even destroyed and replaced by a multiplex or a commercial complex. Apart from selected areas in some South Indian states, single screen theatres have fallen out of grace. Sudarshan 70 MM, a notable single screen theatre in the RTC X Roads area in Hyderabad and a big contributor to the financial success of some landmark Telugu films, was demolished in 2010 due to being unviable.

PVR INOX - the biggest multiplex chain in India has grown multifold in the last few years, both organically and through acquisitions, but their latest financial report clearly signal a top-line and bottom-line downturn along with poor unit economics. They have also managed to restrict footfalls from South Indian films by choosing not to screen films with a theatrical window of less than 8 weeks, and have resorted to signing exclusive deals for re-releases of older films which did not garner enough theatrical revenue during their original runs. Things are probably worse for some of the smaller chains.

Consolidation is the natural course in an asset-heavy industry like this, but distributors and theatre owners need to come together and find a way to make theatrical releases profitable for both parties without distributors having to press for higher revenue shares and theatres having to push food and beverage spends for top-line growth.

What's The Way Forward?

Streamlined processes, robust contracts, focus on the fundamental revenue stream needs to support creativity and innovation to make films a sustainable and more lucrative business to attract investors and audiences.