Crisis brews over satellite rights

At a time when the Tamil film industry is already reeling under the problem of having a success rate of only 5 per cent (with the balance 95 per cent being flops), the producers have an additional botheration with this development; for the last five months the satellite rights of Tamil films have remained unsold — except for films of biggies like Rajini, Kamal, Ajith, Vijay and Suriya — because television channels have stopped buying films.

Satellite rights normally get sold on the same day that a new film gets announced, and that fetches 30 per cent of the budget invested by the producer. But in the recent past, TV channels have been insisting on buying satellite rights only after the film is released, depending upon its outcome.

More than 100 films that released recently, including Vai Raja Vai, Tamizhukku En Ondrai Azhutthavum, Purampokku, Indru Nettru Naalai, Baahubali and Maari as well as some upcoming movies like Maya, Yatchan and VSOP are stuck because of satellite rights not being sold. Trade pundits say that approximately '100 crores are blocked this way.

A production house insider says, “The situation is perhaps due to oversupply — TV channels are loaded with serial and mega-soap content, and dubbed serials, which they buy for a pittance. When they are able to make money by airing this content in the film slot, why would they block their funds by buying movies?” Moreover, channels feel that they already have enough films to air, and would consider buying more only when they run out.”

“It is a matter of concern now. Normally, when we announce a film, depending on its banner, stars and director’s value, its satellite rights are determined and we sign the agreement. Based on that, we borrow money from the market and produce a film. Now, there are hardly any funders in the market, and if this situation continues, the production companies and small budget films (except for a few regular ones), will vanish,” opines producer SR Prabhu of Dream Warriors Pictures.

He further adds, “To my knowledge, in the last four months, about 40 films have not made it to the satellite business. Hence, we hardly have any money for rotation. The Tamil film industry will be in a big financial crisis. Corporates whose marketing strategies are different will be able to make a comeback in K’town.”

On the other hand, TV channels have their own grouse. “Earlier, when we paid big amounts for the satellite rights of a movie, we used to recover them through advertisements and commercials. Now, the situation is different and we don’t get that kind of money, and end up with a loss. These days, producers are demanding exorbitant amounts for satellite rights, citing that their budgets have gone up. We can’t afford to pay such huge amounts because recovering our investment is doubtful,” says a source in a popular TV channel.

Murali Ramanarayanan of Thenandal Films has a different view. He says, “I feel that over-budgeting or over-spending is the main reason for the situation. No one seems to make a film well within budget and time-frame. Sharp business acumen applied to meticulous planning will help a producer recover money.” He adds, “I do agree that the money from satellite rights make a good contribution to a producer. One can make a film well within budget and release it on time. After all at the end of the day the film’s rights are with the producer, so he/she can sell the rights to the TV channels once prevailing conditions become hassle-free. Then they should consider that money as the bonus.”

Karthik of Appu Movies feels that the digital and DVD market has not been exploited in Tamil film industry. “These areas comprise 15 per cent of the revenue for the producers. In Bollywood the DVD and DTH rights are given soon after the film’s theatrical rights. But here it is not so. When people buy pirated DVDs for '40 which eat away a major chunk of our money, why should the producers not sell original DVDs of their own flicks and earn money which is due to them?”

To circumvent these problems, the Tamil Film Producers Council (TFPC) is going to implement a new regulation for TV Channels according to which producers will give promotional materials only if the TV channels are willing to buy the satellite rights of their films. Accordingly from July 24, trailers, teasers, songs and comedy scene clippings from new movies will be given to those TV channels which buy the satellite rights of the movies. Sources reveal that the TFPC has resolved to give film clippings only to Jaya Max and Doordarshan.

Also, a producer is allowed to spend up to Rs 25 lakhs towards advertisement, so that money should be given to the channel which bought the movie’s rights. They should also not be allowed to advertise on other channels.

But the new diktat of the TFPC doesn’t seem to have bothered the channels in any way. Reportedly, most of the Tamil TV channels have decided not to buy the satellite rights of any new film till the yearend. However, a big producer wishing to remain anonymous, says that given the situation, people will have no option except watching the films in theatres.  This opens up the threat of video piracy, which might flourish in a big way.