DQ Entertainment: Living Life in 3D

Mowgli in three dimensions could well become the game changer for DQ Entertainment (International). The mischievous boy and his jungle friends from Rudyard Kipling's The Jungle Book will be reborn in a 3D movie, expected to hit the big screen worldwide in 2012.

MAIN MARKETS: EUROPE 50 % US 30% Rest * 20% DIFFERENTIATOR: Diversified client base and a low-risk model CUSTOMERS: Three in the first year, 2002-03. A little over 100 today, including Disney *Mainly Asia, Australia, New Zealand and others

Hyderabad-based DQ, in which DQ Entertainment plc holds a 75 per cent stake, will produce it. "The whole ball game could change," says Tapaas Chakravarti, Chairman, and CEO. He cites Alice in Wonderland, which cost $200 million to make but grossed $1.02 billion, and Avatar, which cost $366 million but collected $2.75 billion. "These are big numbers and we are talking of time-tested big brands like Jungle Book," Chakravarti says.

After Mowgli, he plans to release one feature film every year. "Becoming a billion dollar company in the next five to six years is not a pipe dream," Chakravarti says. For Jungle Book, he is talking to leading movie houses (read: the likes of Disney and Warner). Chakravarti says DQ's "pre-sales model" has very little risk.

It has already made a name for itself in television, licensing the TV rights for Jungle Book in over 160 countries. That is a long way since 2002, when it got its first client. Chakravarti, 50, who began sketching with charcoal when he was just five and went on to pick up a degree in science and an MBA, slogged away in the corporate sector for two decades before deciding to chuck his job and focus on his first love, animation. Together with Rusi Brij (who has since passed away), he rustled up Rs 1 crore to start DQ. For the first customer, DQ worked for three to four months and made a profit of around Rs 7 lakh.

The big break came in 2005, when Disney liked DQ's entry in a competition for three-minute clips of Mickey Mouse in 3D, and gave it the contract for Mickey Mouse Clubhouse, a children's TV series. It became a huge success and DQ has not looked back since.

Says iLabs Chairman Srini Raju, who was the first of the five PE investors in DQ: "Given the nature of the business, the returns are not in terms of money but global recognition and intangible benefits." Raju and the other PE investors exited with big gains when DQ was listed on London's AIM bourse via DQ Entertainment plc.

Today, DQ has ten production facilities and a workforce of over 3,000 people in India alone. It also has its own intellectual property in Jungle Book and Peter Pan, among others. In 2007, it won an Emmy for a TV series. Staying up until 1 a.m. each day for global clients seems to be finally paying off for Chakravarti.