Shoots On Pause: South reworks the economy
‘RRR’, ‘KGF’, ‘Pushpa: The Rise’, ‘Baahubali’ and other big hits, and you would think the South Indian film industry is rolling in money! Obviously, it is not. And that’s what bothers filmmakers from the South.
Their disease is that just about everyone involved in the making of a film, from stars to technicians, makes money when a film is made, except the producer. To reflect on this issue, the Active Telugu Film Producers Guild (ATFPG) met last week.
Movies like ‘Baahubali’, ‘Pushpa’, ‘RRR’ are flash in the pan and the media only celebrates those. But the Guild argues that besides those few blockbusters, which pop up periodically, there are plenty of other movies that drag a movie producer into the red.
That a movie producer always makes money is a perception people live with because of the stars. Stars are the face of the film industry. Their riches and glamor quotient are for people to see, not the plight of those lurking behind the scenes. In popular perception, if stars earn so much money, surely those who employ them must earn so much more!
How we hope it was true, that it was the producers who employed the stars! The thing is, once a star is signed, a producer starts working for the star. In the Hindi industry, all but the successful few borrowed at the rate of 3% per month, or 36% per annum! Interest was due quarterly and deducted upon landing.
It was a desperate situation for a film producer. Because, not only his movie, even his house ran on that borrowed money. He was a full-time filmmaker and had no other source of income. All because although it was called an industry, it was never recognized as such and therefore was unaware of institutional finance. Which, if nothing, would be available at a reasonable rate of interest.
Usually, a film producer lived on liabilities, always owing money to his financiers, which was transferred from film to film, unless his film became a big hit. It was only that day that he had a chance to pay his debts and come out clean. This, too, depended a lot on his distributors and whether they paid his overflow (profit sharing after recouping his investment). Distributors were almost always only partly honest.
There were filmmakers whose finances were structured in such a way that even the worldwide rights to their films vested in the funder. He controlled all transactions, including the profit made by the film, until he recovered his investment, or over a stipulated period. In such an event, even though the movie was a hit, the proceeds went to this global rights holder.
The best case of such an understanding was film producer Yash Johar, the founder of Karan Johar’s Dharma Productions. Yash Johar enjoyed enormous goodwill in the industry, directing many well-received films such as “Duniya”, “Duplicate”, “Agneepath” and “Gumrah” with top stars. Yet Johar never tasted success.
Finally, when success came to him with ‘Dostana’ (starring Amitabh Bachchan and Shatrughan Sinha), his profit was mortgaged to the world film rights controller for the next 10 years!
Yash Johar, as he was, would laugh at his situation. One hit I make and the profit goes to someone else. That’s how the film industry worked. The producer is the one who put together a project, worked hard for a year or two but got little or nothing in return at the end. The producer knew his situation well, but had no way out of the quagmire.
Recently, the Multiplex Association of India (MAI) decided that a Hindi movie would only be released on OTT platforms after eight
weeks of its theatrical release! Who owns this film, who is the producer? And why does MAI decide such questions for a producer? Well, it’s been like that for a long time. From the number of screens to be allocated to a film to admission prices, everything is decided by the multiplex operators.
Filmmakers, in Mumbai or in the South, all face similar problems that make filmmaking a risky business for them. The major problems they face are also the same: high admission rates to cinemas; out of proportion star earnings and the OTT effect on movies’ box office prospects.
South Indian filmmakers, especially the Telugu film industry, decided to tackle these three issues to begin with. Hindi filmmakers, despite (or because of) four associations representing the production sector, have shown neither the courage nor the desire to take the lead. They are a bit used to terms dictated by others, be it cinemas or stars.
Now the South Indian producers especially in the Telugu film industry have decided to do something about it. The Telugu Film Chamber of Commerce has broadly categorized the films into low, medium and high budget for the purpose of implementing its resolutions.
As a result, films will have to maintain a four-week window between their theatrical and OTT releases, but big-budget films will have to respect an eight-week window before their OTT release.
Admission prices for low-budget films in Centers A and B are expected to start from a maximum of Rs 100 for single screens and Rs 125 for multiplexes. For mid-budget films, rates should start at Rs 122 for single screens and Rs 177 for multiplexes. The respective rates for big budget movies are expected to be Rs 177 and Rs 295.
These admission prices apply to Telangana because in Andhra Pradsh, which is also a Telugu film market, price caps have already been enforced by the state government.
The producers also discussed the high fees charged by the stars, saying no one but them makes money in the film industry. All of these issues, which also face the Hindi film industry, were discussed at the meeting, which concluded by noting: “Producers and distributors had a habit of bloating film collections at the box- office to paint a rosy picture of the stars of these movies in an effort to satisfy their egos.”
This, according to the producers, prompted the stars to increase their salaries even further.
The Telugu industry seems to be serious about this and has decided to halt all film activities including filming from August 1.
The Hindi industry, on the other hand, has not yet taken any initiative to solve its problems. Looks like they’ve started believing in their own inflated box office numbers and they’re happy. Who are these characters fooling besides the filmmakers themselves?