Priya Ganapati examines a worrying trend -- filmmakers selling their movies to television channels
Desperate times call for desperate measures.
This year, Bollywood, the largest film industry in the world, has had exactly two hits: Raaz and Devdas. Almost every other film has flopped. Barely 12 per cent of the films released this year have managed to break even.
Cliched story, poor scripts and bad acting are the usual suspects blamed for a movie's failure at the box-office.
Equally culpable are the two mutants of television: local cable channels that telecast Hindi movies and satellite channels like Zee, Sony and STAR who are now showing the latest box-office releases on television within a few months of their theatrical release.
Together, they eat into box-office incomes. Instead of cracking down, film producers are selling their latest movies, sometimes even their still-to-be released films to television channels.
It is a pact with the devil.
At the best of times, easy money is difficult to pass up on. In a year that has produced only two pan-Indian successes, it becomes even more difficult to say 'no'. In the bargain, producers condemn film distributors to death. With the latest blockbusters being shown on television, theatre-going audiences would drop even more and the dwindling collections will mean greater losses for distributors.
Small wonder that they are now crying foul, threatening to blacklist these producers and haul them for breach of contract.
The hue and cry has forced a few like Yash Raj films, the production company owned by Yash Chopra, to rescind plans to sell their yet-unreleased film Saathiya to Zee. But many others continue to be defiant.
"Today, after ten weeks most of a film's business is over. Films come on satellite channels four to six months after their release. Now, as a producer, you have to think about the money that these films will fetch in terms of satellite rights," says Ratan Jain, managing director, Venus Records and Tapes.
Venus is a music company-turned-production house. Its roster of hits includes Baazigar, Khiladi and Dhadkan, along with some also-rans like Mela, Akele Hum Akele Tum, Yes Boss and Josh.
As the kingmaker, Jain wields immense clout in the industry. Along with Vashu Bhagnani, he has been among the first to sell some of the latest releases from his production house to Zee TV. Humraaz, produced by Venus that was released in July has already been shown on Zee, while the just-released Hathyar is second in queue.
Jain says that the telecast dates of Hathyar have not been formalised and it would be worked out in five or six weeks after seeing how the film fares at the box-office. Unwittingly, he has revealed the secret behind the recent spurt in the sale of satellite rights of the latest films.
"Producers want to make up the money they have put in," says Indu Mirani, editor of the fortnightly film trade magazine Box Office. "With the competition between satellite channels mounting, they know even if they do not sell their movie, someone else will. Worse, pirates will show it anyway on cable. So, when they get a good price, they cannot resist the offer."
Traditionally, a major part of a film's revenues have come from theatrical rights. In Saudagar (1991), theatrical rights sales accounted for about 77.5 per cent of total film revenues. In contrast, in Taal (1999), theatrical rights accounted for just 71.8 per cent of total film revenues. Analysts say that in another three years, the share of theatrical rights in the total film revenues will drop to about 55 per cent. Which means producers have to explore alternate revenue streams and satellite rights.
Today, cable television reaches 40 million households in India or an equivalent of 90 per cent of new television households for the past decade. Nearly 50 per cent of television owning households in India today have cable television. India is one of the highest penetrated cable markets in the world and comes only second to China in Asia.
Cable television is the high stakes, high-risk business of the small screen. Viewership can be fickle and competition life threatening.
When it started in the early nineties, Zee was the leader of the pack. Over the years, Star TV has replaced it as the market leader for generating advertising revenue with its unprecedented success in prime-time shows. Nipping on Zee's heels is Sony, a fast growing channel. "More than ever now, Zee needs to move up the viewership rankings. There can be no better bet than the latest Hindi films to reel in the audience," says a media analyst.
Zee's strategy also makes good economics. For the first 16 film telecasts, it is believed to have roped in eight or nine sponsors, each of whom is expected to spend Rs two million to Rs three million a film. That takes the revenue potential from each screening to Rs 23-27 million, depending on the film.
Right now, only Zee is aggressively bidding for satellite rights of the latest releases. Its competitors, though relatively low key, are catching up. Sony TV is estimated to have paid Rs 100 million as satellite rights for the Oscar-nominated Lagaan that was released in June 2001. It will be telecast within the next two weeks on television.
For producers, satellite rights bring in the moolah even when the films do not fare too well at the box-office. "If you get a good price, then you have to start thinking about the money. If I have not been able to make good money by the theatrical release then, as a producer, I have no option but to look at this area which promises me a good amount. Anyway, I don't think there is any business left in the theatres after six months," says Jain.
But selling the latest films to satellite channels means financial suicide for distributors in smaller towns. It will also completely choke off revenues accruing from the repeat audience. "The 'C' centre is the rural area of India. Films reach late there and business on a film can extend in these centres for up to nine months. If you show the latest releases on TV within four to five months of their release, you are cutting of the 'C' centre market completely," says Mirani.
As clashes between defiant producers and distributors continue, analysts and industry veterans say it is time to get back at the negotiating table to work out a new set of agreements.
In June 2000, a meeting between different producer and distributor associations over satellite rights decided on a one-year lock in period for the latest releases. Prior to that meeting, most films had a lock-in period of five years, before which they could not be shown on satellite television.
But mounting competition between channels and fierce bidding for satellite rights are making it difficult for producers to stick to the agreement and keep their films away from the television hounds. "In the last one-and-a-half years, producers are making losses on the table. Distributors are not paying the right price and going back on contracts. It is a difficult situation for them too but it only compounds the problems faced by the producers. It is a vicious cycle, one in which everyone is suffering losses," says Komal Nahta, editor of Film Information and a senior industry analyst.
A suggestion from the distributors is to shorten the lock in period of new films from the existing one-year to nine months. "As long as no minimum guarantees or deposits or advances are involved, producers should be free to deal with film rights as he feels right. But wherever the distributor's money is involved, a hold-back period of nine months is a fair solution," says Shyam Shroff, head of Shringar Films, one of the biggest distribution houses in the country.
But powerful producers like Ratan Jain and Vashu Bhagnani are not willing to yield yet. "You have to follow the technology. Distributors can't block us from selling our films. They have to take a realistic look and decide what kind of business they will get anyway after six months," says Jain.
Ultimately, it boils down to muscle power. Between the producers and distributors, whoever has the greater stakes or higher clout will emerge the winner. Round one in this battle, however, goes to the producers.
Design: Uday Kuckian
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