Wednesday, July 29, 2009

Bill Gates' Indian Education

Elizabeth Flock, 07.15.09, 06:00 PM EDT
Forbes Magazine dated August 03, 2009
His $258 million Avahan project on AIDS in India got lost between B-school and brothel.

Read it at Forbes

On a humid afternoon former prostitute Fathima welcomes a group of illiterate women still in the trade and needing protection from AIDS into the Mukta clinic in Pune, India. As a "peer educator," she has the job of conveying to them the message of safety. But the visitors shuffle tentatively amid the expensive-looking English-language posters that paper the walls around them.

Why would a clinic serving illiterate, non-English-speaking visitors use more English than Indian languages?

The answer lies in where that money comes from. The Pune clinic is part of a network of 100-plus nonprofits working under the umbrella of Avahan, an AIDS-prevention effort. Avahan, or "Call to Action," is the brainchild of the world's most generous philanthropist, Bill Gates.

Gates announced the ten-year, $100 million Avahan during his much-publicized visit to the country in 2002. This was, and still is, the largest-ever initiative in India for the Bill & Melinda Gates Foundation.
To See The Gates Foundation's Response Click Here

AIDS in India has become an epidemic after nearly two decades of piecemeal efforts to counter it. Millions of poor people have been exposed to the virus; government agencies and private groups didn't have the money to preach safety or treat the infected. Gates showed his seriousness by later raising the Avahan outlay to $258 million.

Seven years after Gates' visit, Fathima (we've changed her name) has counseled the women at the Pune clinic, given them condoms and sent them back home. It is time to worry about the future. The bad news is that Avahan is ready to pack and go soon from the Pune clinic, and Fathima is set to lose her income. (In March Avahan began handing over the reins to the government-run National AIDS Control Organisation, which is unenthusiastic about inheriting the venture.) She doesn't want to slip back into prostitution. At age 45 she doesn't have much of a career in that, anyway.

When it hit the ground in 2003, Avahan set itself three goals: arrest the spread of the human immunodeficiency virus in India, expand the program across the nation and develop a model that the government can adopt. Now, as it begins to wind down, Avahan finds that it hasn't achieved any of these goals. Doubtless the effort has made a dent in the problem, but the impact is small in relation to the spending. When NACO takes over, it will try to prune the costs of the program. Salaries for peer educators will go.

When the Gates Foundation got down to work in India, Avahan was ready to spend what it took to get the best bosses; it started its search at McKinsey, the consulting powerhouse. The recruiters zeroed in on Ashok Alexander, now 55, who had spent 17 years turning Indian businesses into global challengers. "They made me an offer I couldn't refuse," Alexander recalls, sitting at his plush office in New Delhi. "I liked the ambitious arch of the HIV/AIDS program, and it was a chance for me to do something new."

Soon 15 people were hired. Ten of them had come from private-sector backgrounds. They tackled the virus much as they would a problem at McKinsey. Alexander's office is papered with data and maps containing colored dots plotting the spread of the disease across the country. The argot is sheer B-school: Avahan is a "venture," the prevention program a "franchise," a prostitute a "consumer."

At Avahan Alexander and his colleagues oversaw the work of more than 100 other groups. The lack of practical experience at the top manifested itself in different ways. When Avahan introduced sleek mobile vans to bring clinics directly to the brothels, the expensive-looking vehicles were sometimes met with intense suspicion. At the Mukta clinic, Dr. Laxmi Mali says the women initially thought the van was from the police or the government. They refused help.

Accounts of the early missteps are largely anecdotal. But in 2005 an internal evaluation showed a big portion of Avahan's efforts had gone to waste. As many as 31,000 people had been contacted by Avahan's outreach program, but only 11,000 had visited the clinics. The Avahan executives had assumed that the peer educators would already know what the prevention services were without explanation; the reality was that they didn't.

Avahan's craving for scale also meant it overshot by a lot. It started with a bang in six states, with 50 sites for truckers in the south. But by mid-2005 only 12% of truck drivers were even aware of its services, and only 7% took advantage of them. This forced Avahan to reduce the sites to 20. For similar reasons Avahan's 6,000 centers for treating sexually transmitted diseases were reduced to 800.

At the core of Avahan's failure to make a serious difference in India's fight against AIDS is the way it spent money. In a country where a branded condom sells for 10 cents, where did Avahan's money go? It's difficult to say because Avahan's finances are largely opaque. Avahan's outlets sell 5 million condoms a month and give away another 10 million. Asked how so much could be spent on condoms, Alexander laughs, saying, "It's a bit more complicated than that." Probed further, Alexander says he doesn't know the financials offhand. Nor was he able to give them later.

Travel was one drain. Jonty Rajagopalan, Avahan program officer from 2006 to 2008, says she would take flights every month from her base in Hyderabad to her focus areas in the states of Andhra Pradesh and Tamil Nadu, instead of being based in a focus area.

Another chunk: salaries. Alexander's compensation was $424,900 in 2007, the second highest in the foundation globally, not including presidents and operating officers. Avahan's "targeting intervention officers," who oversee the field work, are paid three or four times what a typical NACO officer is paid.

Avahan's marketing was done in style. Eldred Tellis, head of Sankalp, a Mumbai group fighting AIDS that has worked with Avahan, says he has seen a lot of money go into fancy publications reporting the program's work. Very little went to the people on the ground. Vijay Mahajan, the chairman of Basix, a microfinance institution, comments on Avahan: "There is too much money and too many really smart people, with too little coming out."

Knowing that it would have to inherit the project, NACO sent out evaluation teams to sites in four states to get some clarity on costs. NACO's head, Sujatha Rao, says the evaluation threw up one clear message: Large parts of the program are not sustainable by NACO. "We told them you can't create a huge number of assets and then just leave and expect the government to take over everything," says Rao.

But Alexander disagrees. "We are not perpetual funders. We try to be catalytic," he says. "In five years we would hope the HIV/AIDS epidemic is contained enough that we will no longer have to be involved." Either way, it will have to be: Avahan is now repositioning, focusing on maternal and newborn health.

Ashok Row Kavi, consultant for Unaids and chairman of the Humsafar Trust for gay and transgender health, says Avahan's expectations were unrealistic. "They wanted HIV to disappear in five years. For that to happen a lot of people would have to die."

NACO's annual budget is $225 million, none of it currently spent on Avahan. Rao can't find enough money to continue the project. "We can never offer a replicable model. And if we are unable to sustain the program, all of their effort will be for naught," she says.

When probed about the difficulties of handing over the program to the government, Alexander says the transfer is going just fine. Kavi differs; he says that the transfer discussions between NACO and the Gates Foundation are stymied. Costs need to be brought down, but they can't figure out how. He also fears Avahan's now experienced M.B.A.-degreed field monitors, facing shrinking salaries, will depart. The question of running air-conditioned clinics the way Avahan did doesn't even arise.

The biggest hole in quality will appear where it can hurt most. Hussain Makandar, HIV counselor at the Mukta clinic, is worried about condoms: The ones from Avahan are lubricated; the ones from NACO break and the prostitutes stop using them.

Alexander insists that only a tenth of the project will transfer to the government this year, and the rest will happen slowly over the next five. "We're doing a transition program. We're not saying, 'Oh, here's the program, and we're off.'" But NACO and Mukta officials, among others, are watching the calendar, confused.

Adapted from FORBES INDIA, a licensee of Forbes Media.

Wednesday, July 22, 2009

Who Will Bell the Copycat

Hollywood is watching Indian movies! Not just for their spectacular visuals, but to see which plot is ‘inspired’
by Elizabeth Flock | Jul 22, 2009

Read it at Forbes

W hen a smart, love story-infused revenge saga like Ghajini sweeps the box office, becoming the only Indian film to earn Rs. 100 crore across the country in under a week, it hardly surprises anyone. The film, starring Aamir Khan, was refreshingly unusual for Indian audiences.

But what if the extraordinary story wasn’t screenwriter A.R. Murugadoss’ own? By now, most movie-goers know it wasn’t. They may have even seen the original, American academy award-winning film, Memento (2002).

For many years Bollywood producers have been greenlighting derivatives of foreign films — many of them American. As Sanjay Chel, screenwriter of Partner (2007), which many agree is a replication of the American movie Hitch (2005), says, “We get inspired.” All this while, Hollywood — thousands of miles away and largely unaware of Indian cinema — did not notice that its films were being copied.

But the jig is up. Since the turn of the century, when the government granted official status to Bollywood as an industry, the US slowly started to become aware of Indian cinema. And now, the collision of Los Angeles and Mumbai has put the spotlight on intellectual property rights (IPR). In Bollywood, growing awareness and enforcement of IPR is pushing producers toward more original, local fare. As for Hollywood, it has started going after the copycats.

On June 15, the Bombay High Court stayed the release of BR Films’ Banda Yeh Bindaas Hai, which 20th Century Fox alleges is a remake of their 1992 Oscar Award-winning film My Cousin Vinny. In April, Warner Bros. issued a public notice against any adaptation or remake of The Curious Case of Benjamin Button, following rumours that Vipul Shah was making a copycat film.

Mirchi Films was sued by Warner Bros. in March 2008 for the similarity in title between its new release Hari Puttar and Harry Potter, its biggest franchise.

And in 2007, Sony Pictures Entertainment and Will Smith’s Overbrook Entertainment threatened a $30 million lawsuit against David Dhawan’s Partner for its flagrant imitation of the movie Hitch.
Ghajini has escaped Hollywood’s wrath only because it is technically a copy of Murgadoss’ earlier Tamil film by the same name — that film is the guilty party.

“After blatantly going all out copying movies for years and calling it their own, it’s finally catching up to [the Bollywood industry],” says Tarun Adarsh, editor of the Mumbai-based Trade Guide Magazine.
But Hollywood faces many challenges in making a case for copyright infringement in India.

The Quagmires of Copyright
Hollywood’s most common mistake is that it often waits until close to the movie’s release date to take legal action because it is not aware of the film until then.

“When the court sees that so many crores have already been put into a movie, they rule in favour of Bollywood,” says Purnima Singh, senior associate for legal firm AZB & Partners.

IPR becomes more complicated when proving the case across cultures. “How do you prove a film is a copy when the audience, judge, or jury has not seen the original?” asks Mohit Kapoor, advocate for Universal Legal Advocates, who deals with entertainment law.

Besides, the Bollywood industry is fragmented, making it harder to take legal action against it. “The Bollywood industry has so many lines of distribution. You cannot attack them all,” says Kapoor.

Entertainment lawyers agree that the key is to get an injunction, but Hollywood has yet to emerge decisively victorious in any copyright case. The Bombay High Court stayed the release of Banda Yeh Bindaas Hai, but Fox has yet to win the $1.4 million it seeks. Hari Puttar was released after a month’s delay. Partner’s case never went to trial, and it was released to box office success.

But Singh says there are several factors that may favour Hollywood in future. International copyright is protected by both the Copyright Act of 1957 and India’s membership in the Berne Convention for the Protection of Literary and Artistic Works — they just need to be better enforced.

And while there haven’t been any financial disasters for Bollywood yet, the industry has begun to feel the effects. Valuable time has been wasted (weeks for Hari Puttar and Partner) and many lakhs lost. Gautam Jain, who did the marketing for Hari Puttar, says of the lawsuit, “We began to worry about the reach of the film. It took up a lot of our time, and was a distraction from our focus.”

Although Partner was released, Hitch’s producers, Sony, acquired the global exclusive satellite broadcasting rights of Partner. (It airs on Sony Entertainment’s Television Asia.) This is a pittance compared to the $30 million they threatened.
The Motion Picture Association of America (MPAA), a sort of Hollywood watchdog, has also moved. In February, it set up offices in Mumbai to “protect and promote the American film industry”, according to director Rajiv Dalal. It will go after DVD pirates, but also work with Bollywood producers to prevent copycat films. “Before Hollywood was only doing this through consultants. Now we will be more successful because we are here working with the local industry,” Dalal says.

While Hollywood struggles to make its case, Bollywood faces just as many challenges in proving its innocence. Kapoor says the biggest quandary is deciphering what is copyright infringement and what is not. “Copyright is a dynamic issue. If there is exact copy of dialogue, you can easily prove it to be infringement,” he says. “For other aspects — script, screenplay, performance, actors, location — this is difficult to prove one way or the other.”

It is just as thorny for Bollywood to defend itself when working across cultures. Mirchi Films realised this when Warner Bros. approached it about Hari Puttar. The challenge was to explain that ‘Hari’ is a common name in India, and that ‘Puttar’ is the word for ‘son’ in Punjabi.

Inspiration or Copying?
Ronnie Screwvala, CEO of UTV Motion Pictures, insists that there is not as much plagiarism as is made out to be. Directors, too, are dogged in their defense of ‘inspired’ films. Rakesh Roshan, who has been accused of taking inspiration from Hollywood since his first film Khudgarz in 1987, which many say is a replica of the American Kane and Abel (1985), explains it this way: “There are only five or so subjects in the world. We make films on these subjects. We take inspiration from all around, what we read, what we see. These are not copies.”

Even when the case is more transparent, as it was with Partner and Hitch, which most concur was an example of a near-carbon copy, Bollywood is ready to defend its originality. Chel, who wrote the dialogue for Partner, says that any inspired film is ‘Indianised’ and thus cannot be a clone. It all boils down to this: Bollywood and Hollywood are struggling to draw the line between inspiration and copy. But if Hollywood continues to take legal action, and is successful, will Bollywood stop parroting altogether?

Perhaps it already has.

Robbers, No More
Bollywood has become increasingly cognizant of IPR. Singh says the film industry has come to recognise the work product as an asset. “They are starting to wonder, ‘Does this belong to anyone?’” she says.
Singh cites the corporatisation of Bollywood as a major cause of this newfound awareness. A shift from word-of-mouth, trust-based agreements to more clear-cut, professional ones means it is becoming harder to get away with plagiarising.

Rakesh Roshan learned this lesson in April 2008 when he was forced to pay Rs. 2 crore to musician Ram Sampat for a song in his film Krazzy 4 (2008) that Sampat alleged was a near facsimile of his work.

“Everyone knows you can’t cheat any longer,” says Sanjay Bhutiani, CEO of BR Films, who maintains Banda Yeh Bindaas Hai is not a copy. “Indian movies and TV are… now beaming all over the world. Audiences will know when things are lifted from somewhere.”

The new generation of filmmakers don’t want to mimic because they may face legal action, but also because they know audiences will respect them more if they don’t. The last five years has seen a sea change. Screwvala says the industry has undergone a major evolution. Before the turn of the century 90 percent of movies were copies; today, he estimates, 90 percent are original. One factor behind the change is the rise of multiplexes and the exploding middle class, which means a higher-paying and smarter audience with a taste for more creative, original fare.

With more money being made from increased franchising, higher-priced tickets in multiplexes, and the growing diaspora, filmmakers are starting to take more risks. With less government regulation of content, subjects and themes are permissible now that weren’t in the past. But enforcement of copyright may be the real impetus for Bollywood’s transformation.

Production companies are increasingly releasing a host of original, definitively local scripts. UTV Motion Pictures, for example, has moved toward films that reflect a distinctly Indian experience, such as Rang de Basanti (2006), Mumbai Meri Jaan (2008) and A Wednesday (2008).

In the past few years, cinemas have increasingly shown films that have been less formulaic, such as Taare Zameen Par (2007), Chak De! India (2007) and Jodhaa Akbar (2008). Box office numbers show that audiences are responding to this original fare — all three grossed more than Rs. 4.5 crore in the first month of release, as reported by

Filmmakers have also begun to tackle delicate subjects in a realistic way, as in Water (2005) and Black Friday (2004), though both were not initially accepted by regulatory bodies and audiences.

Roshan may even be changing his stripes. He says Indian cinema has become more creative and global, and his new project Kites (2009) is a film in English and Spanish. The corporatisation of Bollywood coupled with Hollywood’s tough stance on infringement has put IPR in the minds of filmmakers more than ever before. And this has caused Bollywood to move toward better quality films.

Better films will garner greater respect for the industry globally, and attract foreign investment. Hollywood won’t, then, be just a bully or a cop. And Bollywood won’t have to run. As for Ghajini’s hero, Aamir Khan, he will next appear in Vidhu Vinod Chopra’s much-anticipated Three Idiots. The film is still ‘inspired’. But this time it’s homegrown — a loose adaptation of Chetan Bhagat’s famous novel Five Point Someone. It looks like Bollywood might be growing up after all.

In June, the Bombay High Court stayed the release of Ravi Chopra’s Banda Yeh Bindaas Hai. Earlier this year, Fox gave permission to BR Films to make a film loosely based on their 1992 hit My Cousin Vinny, but it maintains it did not give rights for a complete Hindi remake. Fox wants $1.4 million in damages, and an injunction against the release of the film. BR Films claims it has made an original movie.

In March of 2008, Mirchi Movies was sued by Warner Bros. just before it released the Lucky Kohli-directed film Hari Puttar. Warner Bros. said the similarity in title was too close to its biggest franchise, Harry Potter. It said the title “unfairly sought to confuse consumers and benefit from the well-known and well-loved Harry Potter brand.” Mirchi Movies CEO insisted the plots of the films were in no way similar, and that ‘Hari’ is a popular Indian name, while “puttar” means “son”.

The Delhi High Court rejected the lawsuit filed by Warner Bros. The court said Warner Bros could have brought the case in 2005, when it first learned of the title, but delayed taking action until now. It also said that the audience could easily distinguish between Hari Puttar and Harry Potter.

Hari Puttar was to be released on September 12, 2008. It was delayed because of the court case, and released September 26 in India. It also released in the US and the UK.

In 2007, Sony and Will Smith’s Overbook Entertainment threatened to sue Eros Entertainment and K Sera Sera, claiming that David Dhawan’s Partner was a direct lift of its film Hitch. It reportedly filed for $30 million. It was to be filed in a UK court, where Eros and K Sera Sera are both registered. This was the first time an international film company decided to take legal action against an Indian entertainment company for plagiarism.

Eros, K Sera Sera, Sony, and Overbrook Entertainment have all refused to comment on the outcome of the case. It is believed that the case was settled out of court. Partner was ultimately released, but Sony Entertainment Television Asia acquired the world exclusive satellite broadcasting rights.

Monday, July 20, 2009

When Grandfather Wants To Be Godfather

Anand Deshpande of Persistent Systems thinks he can build global scale and multiply revenues by five times with his new but riskier model
by Elizabeth Flock | Jul 16, 2009

Read it at Forbes

I nscrutable, intense and extremely quiet, Anand Deshpande looks like he has all the answers. He does: If you are talking databases. For the last 19 years, giants like Oracle, IBM and Microsoft have relied upon Deshpande and his company Persistent Systems to remove the bothersome bee from their database bonnet. He is considered the grandfather of outsourced product development (OPD). OPD is when an Indian company does work for tech big daddies like IBM and Cisco and not tech users like Citibank and General Motors. Persistent, cast in the mould of its founder Deshpande, is all about substance and rigour.

It is also a slow-coach. After huffing and puffing all these years, Persistent has a turnover of only $100 million. When Wipro was 20 years old (in 2000) it was six times as big; Infosys was four times as big in 2001 and Cognizant, just 15 years old, is already 28 times the size of Persistent.

There are a couple of explanations for this slow growth. The first is bad childhood memories. Deshpande had to struggle for two years to get land and bank finance to start the company. Then, during its formative years, Persistent’s main customer shut shop. Professor Ed Robertson, who had taught Deshpande at University of Indiana, recalls those days, “I don’t think Anand ever forgot that. He learned a valuable lesson about what can happen to risky start-ups.”

Such experiences made Deshpande very cautious. He avoided the big risks and thus the big opportunities. “Deshpande has never lost money,” says Promod Haque, managing partner at Norwest Venture Partners, and an investor in Persistent.

There is, of course, the “infant industry” argument. “Outsourced product deve¬lopment was only properly born in 2002. Companies are now going fabulous on one or more product lines,” says Peter Harrison, CEO of Global Logic, an OPD firm in Bangalore. Most Indian firms were providing software services. Persistent steered away from that beaten track and followed a different growth trajectory. Deshpande has just this to say, “There is a steady growth at which one likes to operate.”

Steady growth looks great when a company is $5 billion but when it is just $100 million perhaps it is time to be a bit more aggressive.

Now, finally, Persistent is doing exactly that. The grandfather now wants to be the Godfather.

The New Way
Till now, customers told Persistent what to do and then paid for it by the hour. Now, Persistent will propose a solution and get to keep the upside from its sales. It will also get to keep the secret sauce (intellectual property) that it uses to develop the solution. Later, the intellectual property can be reused the same way Google reuses its search technology across the Web, email and documents.

It was crisis that brought opportunity. As the recession took hold, Persistent’s clients took a hard look at their technology spending. Deshpande says he felt the need to change when he saw a presentation from Sequoia Capital. The Silicon Valley venture capital firm projected doomsday in one of its “infamous” presentations on the market, and told all companies, in which it had invested, not to spend. Following that presentation and other gloomy predictions, most of Persistent’s customers reduced their budgets by 15-30 percent.

Not content to remain stagnant, or let Persistent’s reputation bring in business, Deshpande decided to go beat the bushes. “We wanted to go meet them right away in October, but we had to wait, because people were too scared then,” he says.

So, in early January this year, Deshpande finally left for the US, with plans to meet the CEOs of every single customer, and ask what he could do to help.

The scared, cash-strapped CEOs who met Deshpande all told him the same thing: We want you to take responsibility and ownership of the products. Here is our product — show us how to make more out of it. And then, to Deshpande’s disbelief: Can you take some risk on this? You will get some reward.

“When people are down, they are more humble, right?” Deshpande says. “The market is tough. So there is so much more room to discuss new ideas. Even they don’t know what they’re doing right now. So we are taking advantage of that.”

Putting money upfront is clearly one new idea. Take, for example, the work Persistent did for a customer who brought an American product to India in June. Here, Persistent developed its Indian version. The product has now been released through banks in India and Persistent will get paid depending on the number of users that sign up. If the product flops, so does the company. “It shows our willingness now to put our skin in the game,” says Hari Haran, president of Persistent.

Shailendra Singh, principal at Sequoia Capital, who has invested in OPD companies such as Global Logic, talks about the enormous revenue opportunity in doing this. “OPD companies can really move the needle.” Kiran Karnik, former Nasscom president, agrees, saying the risk-revenue model is very appropriate for right now, and that it will even be the model going ahead.

For the model to work, Persistent will need to own the intellectual property. If it has to reinvent the wheel every time, it won’t travel far. Persistent builds drivers, the computer programs that allow higher-level computer programs to interact with a hardware device. “We used to just build drivers for one company. Now, we are building drivers for that one company, and for all their competition,” says Deshpande, smiling at the improbability of it.