Films such as ‘Baahubali’, ‘Pushpa’, ‘RRR’ are a flash in the pan and the media celebrates only those. But the Guild contends that against these few blockbusters, which appear periodically, there are many other films that drag a film producer deep into the red.
That a film producer always makes money is a perception people live with because of the stars. The stars are the face of the film industry. Their riches and the glamour quotient are for the people to see, not the plight of those behind the scenes. In the popular perception, if stars make so much money, certainly, the ones who employ them must be earning so much more!
How one hopes this was true, that producers were the ones employing stars! The fact is that once a star is signed, a producer starts working for the star. In the Hindi industry, all but a successful few borrowed at the rate of 3 per cent per month, or 36 per cent per annum! The interest was chargeable every quarter and deducted while landing.
It was a desperate situation for a film producer. Because, not only his film, even his household ran on this borrowed money. He was a full-time filmmaker and had no other source of income. All this because though this was called an Industry, it was never recognised as one and therefore not privy to 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 got transferred from one film to the next, unless his film turned out to be a big hit. Only that day did he stand a chance to pay up his debts and emerge clean. That, too, depended a lot on his distributors and if they paid his overflow (share of the profit after recovering his investment). The distributors were, almost always, only partly honest.
There were some filmmakers whose finances were structured in such a way that even the world rights of their movies vested with the financer. He controlled all the transactions, including the profit earned by the film, till he recovered his investment, or over a stipulated period. In such an event, even if the film was a hit, the profits went to this world 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 tremendous goodwill in the industry, making many well-received films such as ‘Duniya’, ‘Duplicate’, ‘Agneepath’ and ‘Gumrah’ with the biggest of 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 film’s world rights controller for the next 10 years!
Yash Johar, such as he was, would laugh at his situation. One hit I make and the profit goes to someone else. That is the way the film business worked. The producer was the one who put together a project, slogged for a year or two but got little or nothing back at the end. The producer knew his situation well, but had no way of coming out of the quagmire.
Recently, the Multiplex Association of India (MAI) decided that a Hindi film will be released on OTT platforms only after eight
weeks of its theatrical release! Whose film is it, who is the producer? And, why does MAI decide on such matters for a producer? Well, that is the way it has been for a long time. From the number of screens to be assigned to a film to the admission rates, it is all decided by the multiplex operators.
Filmmakers, in Mumbai or in the South, are all facing similar problems that make filmmaking a risky business for them. The major problems faced by them are also the same: high admission rates at the cinemas; impractical out-of-proportion star earnings and the OTT effect on the box-office prospects of films.
South Indian filmmakers, especially the Telugu film industry, have decided to tackle these three problems to start with. The Hindi filmmakers, despite (or due to) four associations representing the production sector, have shown neither the courage, nor the inclination to take the lead. They are kind of used to the terms being dictated by others, whether the cinemas or the stars.
Now, the producers in South India, especially in the Telugu film industry, have decided to do something about it. The Telugu Film Chamber of Commerce has broadly classified films into small, medium and big budget for the purpose of implementation of its resolutions.
Accordingly, films will have to keep a four-week window between their theatrical and OTT releases, but the big- budget ones will have to adhere to an eight-week window before their OTT release.
The admission rates for small-budget films in the A and B centres should start from a maximum of Rs 100 for single screens and Rs 125 for multiplexes. For medium-budget films, the rates should start from Rs 122 for single screens and Rs 177 for multiplexes. The respective rates for big budget films should be Rs 177 and Rs 295.
These admission rates apply to Telangana because in Andhra Pradsh, which is also a Telugu film market, the rate ceilings have already been applied by the state government.
The producers also discussed the high fees charged by the stars, contending that nobody else but them were making money in the film industry. All these problems, which are faced equally by the Hindi film industry, were discussed in the meeting, which concluded by noting: “Producers and distributors had gotten into the habit of inflating box-office collections of films to paint a rosy picture of the stars of those films in a bid to satisfy their egos.”
This, according to the producers, spurred the stars to further hike their remunerations.
The Telugu industry appears to be serious about the matter and has decided to stop all film activities, including shoots, from August 1.
The Hindi industry, on the other hand, has taken no initiative yet to solve its problems. Looks like they have started believing in their own inflated box-office figures and are happy. Who are these figures fooling except the filmmakers themselves?
