No takers for films on the small screen
It's not just the production of films that is getting affected due to the global meltdown, even the marketing has taken a beating, specially when it comes to satellite and cable rights. According to sources, the price of a film starts from Rs 3 crores and goes upto 15 crores depending on its box-office performance. For instance, blockbusters like Welcome and Om Shanti Om get anywhere between 15 crores and above. Jab We Met earned close to Rs. 8 crores. However, now channels are not willing to pay these kind of prices as they are finding it difficult to recover the money. Says Sameer Rao, Business Head, Star Gold, "We have been strategically buying library titles and new titles because the prices of new titles do not justify the returns."
In fact, SetMax, which has been the frontrunner in buying the rights for the latest releases, has completely stopped acquiring new films. Sneha Rajani, Business Head, Max, says, "Since the last one-and-a-half years, the producers have been inflating the prices. Unless the cost comes down by 60 -70 per cent we have decided not to buy any films."
Also, with the change in the business model, channels no longer have exclusive rights to a film. The syndication model, where-in the rights for the film are divided between different channels (one channel is given the first screening right, another is given the second telecast rights) has further affected their revenues. Jab We Met was the first film that was sold on this model followed by Bhool Bhulaiyaa. "The problem with the model is you don't have the freedom to schedule the film as and when you want. After the initial experience, channels have realised that it is not a viable proposition," says Rao of Star Gold adding that he is expecting a price correction of 25-30 per cent for new titles.
Mohan Gopinath of Zee Cinema, which has acquired the rights for Aamir Khan's Taare Zameen Par says that offers are coming in but "We will evaluate it and only then take a decision."
Not so long ago, the scene was different with channels trying to outdo each other in obtaining the rights for a film, which was a major source of revenue for filmmakers. Says Navin Shah, CEO, Percept Pictures, "Only 50 per cent of the revenues come from the box-office, the rest is from satellite and cable rights. But no deals are taking place since the last two months. Producers don't want to sell at a lesser price and broadcasters are unwilling to pay the existing price, so there is some kind of a complete hold on movie buying rights."
Siddharth Roy Kapoor, CEO, UTV Motion Pictures, agrees that the liquidity crunch has led to channels re-evaluating their business strategies but points out that channels haven't stopped buying the rights. "Only last month we sold a spate of films to Zee and Colors. However, it's true the numbers (prices) have come down ."
According to sources films that were sold in the range of Rs 10 crores have come down to as low as Rs 3 crores due to the cash-crunch. The last film to be sold at the price for Rs 15 crores is reportedly Jaane Tu... Ya Jaane Na, which was bought by Colors. Films that have not found any takers include Love Story 2050, Drona and Singh Is Kinng. Though Colors had announced that it had the rights for the film, according to sources, it is an internal transfer between Studio 18 and Colors as it is part of the same group.
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