Indian Movie Industry

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Distributor: A person who distributes the film through the theatres is called film distributor. The distributor buys the “distribution rights” from the producer, mostly in the very beginning itself (or) sometimes after previewing the final cut. However, the pre-acquiring of film distribution right is based on the casting, crew, director, story and the producer’s past success. Also, Now days it is a usual tendency in film distribution in India that the producers itself, distributing the films without a third party (or) an independent film producer. They were implementing this method is because of avoiding the distributor expenses. On the basis of entertainment tax and state-to-state connectivity, Film Distribution Association of India divided the state provinces into 11 circuits for distributing the films. Sometimes the distributors directly distribute films to all these Circuits, while other times the main distributor rent (or) sell films to a local film distributor.

Exhibitors: According To Film Glossary, a person who owned theatre is called an Exhibitor. There are two ways an exhibitor, getting right to display a film in their theatre. The first method is, on the basis of a pre-agreement with a distributor hire theatre to showcase their films. The Second method is, the releasing centres (A Class Theatres) give advance money payment (theatre advance) to distributors for getting the right to display that particular film in their theatre . Above, the Secondly explained method of Film Releasing is dependable on the basis of cast and crew; sometimes it is based on the tie-up between Film Distributor and Exhibitor. Distributors get the return from the theatre and it is known as “Distribution Right”. The ‘Distribution right’ is calculated on the basis of an agreement with the theatre owner/Exhibitor Association and film distributor, as the way below mentioned tabular column shows.

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Hold Over: If, a Film not earns 70% of revenue from all of its three theatrical shows (A Day Count), then it is called as ‘Hold Over’. In such a case there will be a 10% less in Profit Percentage Sharing of distributors in the first week and 5% less in next two weeks.

After Five-seven weeks, the producer also has right in the ‘Distribution Share’. But, the condition is- if the distributor buy the film wholly from a producer, then the producer is not entitled to get any theatrical distribution share and satellite right (sometimes) from the distributor.

Satellite Rights in the Indian Movie Industry

Before the advent of cable television, Box office and Home Media sales were the only ways for a movie to earn money. But with the dawn of the digital era, the films have figured out more ways to make a buck; one of these is called Satellite Rights. Satellite right is the permission that a movie producer gives to a TV channel or network to air their film on TV. The channel pays an agreed amount to the producer (or whoever owns the satellite rights of the movie) and it earns the money back via the advertisements. These rights could be purchased for either lifetime or a shorter fixed amount of time, agreed upon by the both parties. One very interesting case if of the Hindi film Sooryavansham, starring Amitabh Bachchan; the satellite rights of this film were sold to Set MAX by ABCL for 100 years. This is why when Set Max doesn’t have anything better to air, it plays Sooryavansham.

These days, the satellite rights of most of the films are sold even before the movie is released. Channels have realised the immense potential of movies and the stars who act in them, and they practically get into a bidding war with the other channels/networks to acquire the rights. The one with the highest offer bags the satellite rights of the movie for the stipulated time. For example: The satellite rights for the Hritik Roshan starring movie Kaabil were sold for INR 45 Crores to Star TV, while the movie is scheduled to release on 26th January. Before offering a price, a channel considers the following:

- Is there a major star in the film?

- The past record of the director/producer/star.

- Success expectation of the film.

- How seasoned the production house is.

- Bigger production houses get more money than the new ones.

After getting the rights, the channel is free to play the movie any number of times until it has the lease.

There are a lot of factors that work here, but the biggest and most important is – the Star Power. Like every other factor in mainstream cinema, a bigger star means more negotiating power. This is why bigger production houses and studios set a high starting price for the bidding war. However, sometimes a producer just sits on the satellite rights, and gets into no negotiation with anyone. This is primarily done to boost the price. This way, the channels try to get in touch with the producer with exciting offers. But sit on a movie for too long, and it could be harmless for the producer. Also, the box office sales of a movie can effect the satellite right prices. When Paan Singh Tomar was released, no channel was interested in it. But as it snowballed into a blockbuster, the channels started pursuing Tigmanshu Dhulia.

In India, the film industry is divided into several regional industry. However, the biggest and most successful is the Hindi film industry, also known as Bollywood.

In Bollywood, a big star film can go for as big as INR 75 Crores, only for its satellite rights. Recently, Zee TV has bought the satellite rights for Aamir Khan starrer Dangal for 75 Crores. However, this price is usually around 30-50 Crore for an average Hindi film that has decent star power.

In Tamil Cinema, this price cuts down almost to the half. Rajnikanth’s latest film Kabali’s satellite rights were bought by Jaya TV for INR 25 Crores. Where this is quite low for a Hindi film, down in south, this is like hitting a goldmine. Suriya’s 24 was acquired by Vijaya TV for INR 15 Crores. On an average, a decent Tamil film can earn around INR 10-20 Crores for its satellite rights.

For Telugu Films, the price lowers down even more. The average cost for a hit Telugu film’s satellite rights can range between INR 9-12 Crores. Baahubali was an exception, that earned INR 25 Crores (Gemini TV), bagging as much as Kabaali or any mega Tamil film. But usually, Tamil films like Aagadu and Nenokkadine earn INR 9.75 and INR 12.5 Crores, respectively.

In Malayalam Cinema, the price cuts down