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Shahrukh Khan-The Entrepreneur

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Shahrukh Khan is a household name in India and is popular among Indian Diaspora abroad too. He is the CEO of Red Chillies Entertainment. He is one person who has correctly figured that he is not in the movie business but in the entertainment industry. Over the years Shahrukh Khan has changed from being nobody from Delhi to a person whose personal wealth amasses Rs 1500 making him the richest film actor in India(source:Business World). This was made possible because he never stuck to film industry alone.

An actor’s shelf life is limited and his making big in the film industry depends how his movies fare every Friday. You have to be consistent for a long period of time before you can reach a certain standing. Shahrukh having done that, diversified to make himself a brand. He entered into movie production with Red Chillies entertainment. He could be seen hosting events and even dancing at weddings and birthdays. Of course he charges heftily for that. His 40 min appearance alone can cost you around Rs 5 crore and he charges Rs 12 crore per film for which he work around the year. Also when IPL was started, Red Chillies Entertainment was quick to seize the opportunity and brought Kolkata Knight Riders for a sum of Rs 295 crores. Although the team has not performed well in the three seasons of IPL but it has posted profit in all the three years and going by the sum for which new teams were bought (Rs 1700 crores for Pune and Rs 1500 crores for Kochi), the price that KKR will fetch is anybody’s guess.

The realization that cricket comes under the bracket of entertainment industry helped him make a foray in the market. Apart from that he has hosted shows on T.V.

Red Chillies Entertainment is one of the companies that encompasses virtually all the entertainment sector in India. The revenue posted by Red Chillies Entertainment in the financial year 2008-2009 was Rs 73 crores. A break up of the company is given below
Red Chillies Films- This division is responsible for the production of the film. Main Hoon Na, Om Shanti Om were produced under the Red Chillies banner.
Red Chillies Idiot Box- This division produces and co produces television serials. Seeing the explosive growth of the TV industry this may be the division minting money for the company in the future.
Red Chillies VFX-It deals with Post Production and special effects segment.
Red Chillies TVC-This division is responsible for making ads and the client list includes the likes of Hero Honda, Pepsi, ICICI, Hyundai etc
Kolkata Knight Riders-This is an IPL team which participates in the IPL tournament. Though the team has not performed well, it however has posted in the three seasons of the game.
The entire gamut of entertainment is included in the various divisions of Red Chillies and the market for animation and special effects is set to grow in India making Red Chillies VFX promising. Also the fact that Kolkata Knight Riders was brought in the first season for Rs 295 crores speak about the opportunities of growth. Considering the fact that Kochi and Pune teams were bought at around Rs 1500 and Rs 1700 crores respectively, the valuation for KKR increases significantly.
The goal for Red Chillies TVC is to churn out 100 commercials per year from 40-45 commercials that it produces annually.
As a whole, Red Chillies Entertainment future seems promising for the simple fact that they have not only invested in movies (which could have been their strong domain considering that Shahrukh features in the films), it has diversified in the TV serial segment, ad industry, special effects and last but not the least cricket. This speaks about identifying your business domain correctly and broadly.

I hope to see Shahrukh making strides in the Industry and be as successful as he his with his film career.

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