Applause Entertainment Private Limited, the wholly-owned media and entertainment arm of the Aditya Birla Group, is betting big on the Telugu movie market.

AEPL is in talks with top production houses and directors in Hyderabad to explore the possibilities of working together on a number of Telugu language projects in future.

Speaking to Business Standard, Anshumaan Swami, chief executive officer of AEPL, said that negotiations were on with a number of producers and directors for making Telugu movies, and Ram Gopal Varma's production company Varma Corporation is one of them.

Though Swami was reluctant to divulge more details on the progress of talks with Varma Corporation, sources said that both the companies were expected to come together.

"The venture is expected to make at least two to three films in Telugu in the next 18-24 months," sources close to the deal said.

Aditya Birla Group ventured into the media and entertainment industry with the formation of Applause Entertainment Private Limited in April 2003. AEPL forayed into film production with a Telugu film Tapana. The film was released in February this year.

But why did AEPL choose a Telugu film for its foray?

"The film-loving Telugu market holds immense promise on account of the sense of discipline and support extended to us by the big names of the Telugu film industry. The Telugu film industry is enterprising and is blessed with talent. Hence, we decided to choose the Telugu language to foray into films," Swami said.

He said that though television programmes and Hindi films are AEPL's thrust, it is committed to making at least one or two regional films a year. "We have also done a digital Bengali film Tempantorere Mathe which is aimed at the festival circuit," he added.

On the joint venture with Entertainment One for producing Hindi movies, Swami said: "Entertainment One is a reputable production house and we were keen to make our foray in mainstream Bollywood by associating with an equally credible brand name. Dev, starring industry heavyweights Amitabh Bachchan, Om Puri, Fardeen Khan and Kareena Kapoor, and directed by Govind Nihalani, will be our first co-production. The movie is slated for a June-end release. Our next major production in association with renowned director Sanjay Leela Bansali is Black starring Big B Amitabh Bachchan and Rani Mukherji. The movie is slated to release sometime towards the end of this year. We will be announcing another three films over the next few months."

While refusing to discuss the equity base, investments or revenue targets, Swami said that apart from film production, AEPL is into television software, visual effects, events and 2D animation.

"Television programmes and films will remain our focus area. We are endeavouring to become developers of even more premium television software across diverse genres, both for India and overseas broadcasters. We have major plans for film production as well," he said.

The other area that AEPL plans to focus on is 2D animation and special effects. It's first break in special effects came with Lord of the Ring-Return of the King.

A research report by Andersen predicts that the Indian multimedia and graphics industry, at present pegged at $550 million, is slated to clock a growth rate of 30 per cent annually in the next three years and is expected to reach $15 million by 2008.

Nasscom estimates that India could use 3,00,000 professionals in content development and animation by the year 2008, up from 27,000 in 2001.

AEPL says it possesses the required creative and technical expertise to undertake visual effects work for commissioned and outsourced film and television projects at extremely competitive rates with high efficiency.

When asked about the overall performance of AEPL in the entertainment industry, Swami said: "We are only one year old. And for 12 months, we believe that we have accomplished quite a lot with more than eleven television programmes including Ab Aayega Mazaa (Sony) on air, four big events, two regional films and two mega-budget Hindi films. Above all, we were the only Indian production company to bag the contract for undertaking a portion of the special effects for Lord of the Ring-Return of the King.