Do the b-o collections match production costs?

The last five years have witnessed an unprecedented increase in the production costs of films, mainly because of the high remunerations of stars and the massive expenses incurred on shooting films on foreign locations. Do the box-office figures justify the production costs? Our filmfolk debate the issue...

Most of the big banner concerns and producers of big starcast films get the price they want for their products from the distributors, who don’t mind paying high prices for acquiring films because of the hiked ticket prices, which enable them to recover the investments within the first three to four weeks.

The number of saleable stars is diminishing alarmingly. Also, the stars seem to be choosing only big banners wherein, they feel, their careers, fame and fortunes are safe. All this has resulted in a scarcity of big starcast films in the market. But this very scarcity is proving advantageous to the distributors who feel they are in a more commanding position than the exhibitors, from whom they can get advances against the limited number of big-budget and big-starcast films. With the hike in admission rates, the recovery of investments is faster than before. According to trade circles, the first three weeks houseful collections of a film at present are equal to the silver jubilee week run of a film in the past.

Opinions of a cross-section of producers and distributors were sought on whether the increase in business is commensurate with the increased production costs of a film. This is what they had to say...

THE SUBJECT HOLDS THE KEY
Ramesh Taurani
Ramesh Taurani of Tips, said that their company not only produced films but also was dealt with distribution. According to him, the increased costs of film production, spent by way of payments to stars and on location shooting in foreign countries, paid dividends. "If the subject demands that there be foreign locales, we don’t mind doing location shoots abroad. The reason why we are shooting abroad is because the governments are inviting us to shoot there, providing all the facilities. Besides, the foreign locales add to the value of a film besides adding better visuals. As far as costs of production are concerned, we spend money according to the set up. All our films are economically viable projects. More than 90 per cent of distribution is done by us, which is the reason our films are cost-effective. Good films always do better business and bad films fail at the box-office no matter how much you spend on it," he pointed out.

A good initial is all it takes
Pahlaj Nihalani
Pahlaj Nihalani, president of the All India Film Producers Council, said that the business of films has become a short period one. "Today," he said "you can recover your investment in four weeks provided cable piracy is eliminated. The only positive way at this moment of time to combat cable piracy in a positive manner is to press more prints into the market to rake in the costs of a film within three to four weeks. Already, the number of prints being taken out has increased to nearly 500. This number can be increased still further if the cost of printing and processing is reduced considerably. It is ironical that though the cost of cine positive is Rs 5.25 per meter, the processing and printing of one meter of raw stock is Rs 5.30 or five paise more per meter. It is like paying more money to the tailor than to the merchant from whom the cloth is purchased. If more prints can be pressed into service in the first week itself, like in Hollywood films, the distributors will not have to worry about recovering their investment since in most cases they can recover their investment in the first two weeks itself. A good initial can help you cover the costs."

One needs to take risks
Rajesh Thadani
Rajesh Thadani felt the distributor is in a commanding position today as he does not have to pay theatre rentals. "We buy films on the basis of banner, star cast and the maker. Some films are acquired on the basis of advance refundable basis, some on minimum guarantee and some on commission basis. So it is very difficult to say which one is paying and which one is not paying business. Today, there are more cinemas and less number of movies. In fact, Dil Pe Mat Le Yaar was booked on percentage basis than on rental basis at the Metro. As far as we (RG International) are concerned, we are not in the rat race of buying films at any cost. We buy films very calculatedly. You can call us conservative but we want to acquire films on our terms and not on the terms of producers. All said and done, it is a gamble. We will never know whether the film we buy will be a hit or not. We don’t see even a frame of the film before buying because we see the set up and take a calculated risk. Ticket prices are going up and business is good. Five years ago, we could buy a film for Rs 50 to Rs 1 crore but today it is anything between Rs 2 crore to 3 crore. We had acquired Kya Kehna without seeing the film but it turned out to be a hit. Similarly, we had acquired Soldier which too brought in good money. Even when we acquired Dilwale Dulhaniya Le Jayenge we never knew it would be a super duper hit. We thought Mela would be a hit but it did not fetch much. So also Auzar. But one has to take things in one’s stride. If one takes a risk, it amounts to nothing more than gambling."

The results don’t add up
Ramesh sippy
Ramesh Sippy, of BRA Enterprises, admitted that the increased business is not commensurate with the price of a film. "It is one crore to five crores. In rare cases does a film pay. Most of the films which have been sold at the ratio of Rs 2 crore to 2.5 crore per territory as Minimum Guarantee and Royalty (excluding print and publicity) have been disasters at the box-office, particularly this year. Weekly collections have not gone up in the ratio of the price all distributors are paying to the producers. The reason is the short run of a film. They are paying more to acquire a film due to shortage of films and they hope that the shortage of films and the terms offered by the exhibitors will help them wipe off the deficit and make money like in the case of films like Refugee, Chal Mere Bhai and Har Dil Jo Pyar Karega. At the box-office a film is not a success but distributors are paying. Because of scarcity of films exhibitors are paying money for films which have no merit. Distributors are gambling because they are taking chances with a ray of optimism. For the last three years the prices of films have shot up considerably. I bought Ghulam-E-Mustafa for Rs 1.25 crore but nobody dreamt that that figure will soar so high not only for the domestic market but also for the overseas market. The prices of overseas, music and satellite have gone up so high that producers are not desperate in selling distribution rights for theatrical circuits as in the past. Dramatic changes have occurred in the film distribution business during the last three years because of which the prices are galloping."

The distributor bear the brunt
Balkrishna shroff
Balkrishna Shroff of Shringar Films admitted that the business had not increased in the same proportion as the prices had increased. "A film costing Rs 50 lakhs three years ago now costs Rs 2 crore," he said. "But the business has not increased in that proportion. Yet the distributors are paying because of the competition. You don’t find any distributor holidaying abroad after the release of his film as is being done by producers. I can cite examples of at least 15 such producers who have gone abroad on holiday with their entire families. This shows who is making money. In one out of hundred cases, a distributor makes money. Still we have to buy films because we are in this business. If I don’t buy, there are several others who will pay much more than I have offered. See the present lot of distributors. They keep on buying films at a fantastic price and they keep on losing. There is a substantial jump in the prices of pictures in the last three to four years. This is basically due to the shortage of stars. There are very few saleable stars in the industry. They are paying a higher price than what the film deserves not because of business but because of competition."

The first three weeks are crucial
Vinay Choksi
Vinay Choksi said the distributors are paying high prices for acquiring films because of multiplexes in Gujarat from where good prices had been offered in the past. "For a good movie," he pointed out, "the collections are good with which you can cover your costs in three weeks. Distribution itself is a gamble whether you buy films on advance, MG or Royalty. It is very difficult to get returns if a film flops. A little risk is always involved. Producers are asking more money because they have to pay the prices the stars ask. During the last two years in particular, the prices of films have soared high. The billing must be good for a film during the first three weeks. Thereafter, it just doesn’t matter in today’s time. If a film does 50 days on its merit, it is as good as a silver jubilee week run film in the days of yore".

Blame it on the stars
Ganesh Jain
Ganesh Jain of Venus attributed the high costs of a film to the increased pay roll of stars and technicians. "But," he said, "there is an increase in the b-o collections of a movie. Most big banners are recovering their high costs. In our case we are only producers and we have to depend on the directors we hire for a film. If we were producers and directors, things could have been different. Yet we are getting good prices for our movies even if we spend more on production."

Big banners have no problems
Ratan Jain
Ratan Jain also of Venus, said that there was no problem in selling their films even if the costs of production had gone high. "All the big banners," he pointed out, "are going to get good prices for their products. Today, there are very few big producers but there are too many buyers in the market. We finish our films in time. As far as possible, we don’t go overboard in the production costs of our films. The remunerations of artistes have gone up as there are very few stars. Still, everything depends on the director and the script. If it demands foreign locales, we have to spend money for that. In short, there are fewer stars which has created scarcity."

The changes are inevitable
Darshan Sabharwal
Darshan Sabharwal pointed out that the business had not increased but what had increased were the rates of admission. "A few years ago, films used to celebrate silver jubilees but today very few achieve that feat. Barring Kaho Naa...Pyar Hai, no film has done a jubilee. In Mumbai, films are running week to week. Venus’s Dhai Akshar Prem Ke was doing good business yet it was removed from the theatre because there was a fixed booking. All the theatres are losing. The Metro cinema which used to run a film on rental is running it on percentage basis. Even big theatres like Minerva are in a similar predicament. Admission rates have increased but the attendance has not increased. The cost of a film has gone up eight to ten times. What used to cost Rs 2500 to book a studio floor now costs Rs 20,000 because of scarcity of studios caused by television serial makers booking the floors for years together for their serials. Mehboob Studio not merely charges Rs 30,000 rental for the floor but also for the supply of water and the use of the garden in which the junior artistes spend time during the recess. In addition, you have to pay for the make-up rooms. This is the reason why many producers are running to Hyderabad for the shooting of their films. Where do you cut costs? If a hero’s suit costs Rs 50,000 plus Rs 25,000 for designing the suit, what can you do? The only thing that has changed in the star prices is that black money has changed to white."


MSM Desai