Hit or no hit it's profit all the way for filmmakers, thanks to satellite TV, music rights
Hit or no hit it's profit all the way - thanks to satellite TV, music rights and the sizeable Indian diaspora.
- Subhash Ghai has not released any film this year. His Yaadein, starring Hrithik Roshan, Kareena Kapoor and Jackie Shroff, will release in May 2001. Yet in December 2000 his newly listed Mukta Arts is expected to announce a net profit of Rs 20 crore.
- Karan Johar began shooting his new movie Kabhi Khushi Kabhi Gham (KKKG) with Amitabh Bachchan, Shah Rukh Khan, Hrithik, Kajol and Kareena last week. The film will release around Diwali next year. The buzz is that it's already a top grosser with Johar having reportedly collected Rs 35 crore just for the music, satellite and overseas rights.
- J.P. Dutta's Refugee is estimated to have cost around Rs 9 crore to make and was deemed a loser by industry pundits. But Dutta is still smiling, having allegedly sold satellite rights (in a package with Border) for Rs 10 crore.
Subhash Ghai, film director |
Welcome to happy endings. Bollywood's producers have never had it so good. Thanks to the Indian diaspora, the burgeoning of television channels and the spread of audio business, a producer can today put up a project - as massive as Johar's KKKG or just a medium-budget one like Rahul, directed by Prakash Jha and produced by Ghai - without having to put any money on the table.
Ghai puts it in perspective: "Capital is no longer an issue. The revenue model of movie-making has changed. Indian cinema is going through a paradigm shift." Adds Amit Khanna, CEO, Reliance Entertainment: "We are talking megabucks. Cinema in its conventional sense is on its last legs now."
The emerging paradigm shift is that the domestic market - or rather theatre ticket sales - now accounts for less than 35 per cent of total revenue. In other words, a filmmaker could well declare a profit on a venture even before the film releases or, if it's a Johar, even before the first reel is canned.
Music rights: Rs 7.5 crore Producers like the Chopras are thriving with new revenue models. |
In fact, just the first step - sale of audio rights - is good enough to call for action. Yash Chopra grossed Rs 7.5 crore by selling the music rights for Mohabbatein to HMV just as Ghai's already made Rs 10 crore from the scores of Yaadein. Sanjay Leela Bhansali too has apparently sold the music of forthcoming Devdas to Universal for Rs 9.5 crore. "Five years back we were buying audio rights at around Rs 1 crore for a mega project," explains Harish Dayani, executive director, HMV. "Today the number has jumped tenfold." Courtesy, a Rs 400 crore market for film music.
The second step is the sale of satellite TV rights. In just eight years, the number of television channels has risen from a mere four to 68. There are half-a-dozen serious contenders for any and every movie coming out. These include Star Television, Sony Entertainment Television, Zee Television, the Hinduja-controlled CVO, the L.N. Mittal-funded B4U and now Kerry Packers' Nine-Gold.
Last year Sony paid over Rs 3.5 crore for Kuch Kuch Hota Hai and Rs 1 crore for the six-year-old Hum Aapke Hain Kaun. And last month, Ghai sold eight of his movies for limited telecast over two years and pocketed Rs 14 crore.
We haven't got to the big daddy - overseas rights - as yet. A growing Indian diaspora, estimated at over 20 million across 20 countries, has ensured that Indian films are a big draw the world over. While the US and UK continue to be the leading markets, the Middle East, South-East Asia, Canada, the Caribbean, Japan and South Africa also have a share.
DVD rights: Rs 1 crore The film didn't click but the returns from the sale of DVD and satellite TV rights have been substantial. |
Avers Ravi Gupta, CEO of B4U: "For an exceptional movie, overseas rates range from anywhere between $100,000 (around Rs 46 lakh) to $2 million (Rs 9.2 crore)." There is more. Rights for digital video disc (DVD), though a fledgling market, are already fetching Rs 1 crore even for films like Refugee.
There is also the emerging Internet market. As of now, websites are cutting deals only for publicity but with connectivity and broadband in the pipeline, Internet rights could rake in as much as audio does. Maybe more.
Product placements are just as lucrative. Ghai's Yaadein, it is reported, has earned around Rs 3-5 crore through in-film advertising. A study done by Arthur Andersen for FICCI puts the current entertainment industry in India (including teleserials and films) at Rs 15,400 crore and expects it to grow to Rs 60,000 crore by 2007. "Last year," says Ghai, "the film industry logged Rs 6,000 crore. By 2003, it is expected to touch Rs 33,000 crore."
Costs: Rs 15 crore The film's failure has not daunted the producers from planning another project- Ashoka the Great. |
Naturally everybody, including A list artistes, want to be in. Ajay Devgan's Devgan Entertainment is into distribution and Internet. G.S. Entertainment - run by Salman Khan's brother Sohail - is dabbling with production and star shows. Shah Rukh Khan and Juhi Chawla are not overly perturbed by the indifferent reception to Phir Bhi Dil Hai Hindustani and are now in the midst of producing Ashoka the Great.
Given this and the fact that time horizons for content have shrunk over the years, the demand for content far outstrips the supply. Khanna reveals that in a year "there will be over 50 corporate entities making movies".
A fact already recognised by the Union Government. Having announced industry status for Bollywood, Information and Broadcasting Minister Sushma Swaraj declared last fortnight that IDBI would be allowed to fund films. This, in simple terms, is affirmation that Bollywood is no longer seen as a high-risk business. Says Sanjay Bhattacharya, vice-president, UTV Motion Pictures: "High risk is only in the minds of people. Everybody covers investment by selling. And when you hit the bull's eye, profits can be as high as 500 per cent."
Anil Sekri, tax consultant for the film industry, dubs Bollywood as "the sunrise industry". Of course, as Ghai puts it, there is no denying that there will be bad apples. "After all, it is not just credit or capital that makes or mars." His formula for high returns: focus on talent, control credit flows and ensure professionalism.
If Bollywood can manage that, multi-billion dollar Hollywood may yet find true and tough competition.