Film Production Costs and Satellite Rights of Movies

"Businessman" is releasing on 13th and "Bodyguard" on 14th. Good for both. But there's a new twist in "Businessman". For the first time, it seems, the satellite rights of "Businessman" are sold on a revolving basis instead of being sold for a longish period of 5 yrs or so. This time, Puri Jaganadh, the maverick director who worked non-stop for 77 days schedule of the movie has done what smart Bollywood producers are doing. He bought the satellite rights of the movie for a whopping Rs.7.7 crs - Rs.5 crores as his remuneration for the movie (Wow!) and Rs.2.7 crs. as "Eduru Katnam" making it an unheard of figure for satellite rights for any Tollywood movie. For the first round of limited period - MAA TV gets the rights. Interesting times for Tollywood producers and directors - satellite rights are fetching good monies.


"Sri Rama Rajyam" has fetched its benevolent producer Saibabu Rs.4.50 crs. and so on. In times of yore, you had none of this - I remember once "Shankarabharanam" producer Edida Nageswar Rao was flying with me - and he told me that most of his classics were sold to SunTV for a song - as long as Rs.5 lacs or so. Times have changed and even Directors are thinking like a "Businessman"!

The onus shifts to Satellite TVs to make money - MAA TV holds the rights of almost all the top ten all-time grossers of Tollywood in the last five years, Gemini and Zee come up with occasional movies which get the eyeballs still, while ETV goes for the ever-green mix of vintage movies with high family entertainment. I was once educated by a Respected Media Advisor on how TV Channels like MAA TV made huge money by betting on movies which nobody guessed would become "multi-baggers" like "Pokiri" and "Simham" - that is what I call scientific betting. But when the stakes get higher like Rs.4 crs to Rs.7 crs. it becomes difficult to make money unless you show the movie atleast 20 times within the period the rights are bought for - say, five years and so on.

There is another game in this whole buying - and most often, it appears to me, the smart producers and directors will create a story to pump-prime the winning bid. They will say, "this movie cost us Rs.40 crs." It will not always be true. OR, it will be hopelessly true sometimes. For example, in "Srirama Rajyam" movie, the opening shot of the movie shows Rama and Sita ushered in at Ayodhya with flowers. That shot - remember? Originally, Bapu Uncle wanted rich quality flowers costing Rs.5000/- for them. Producer SaiBabu wass not available on the shot and the Production Controller said "Sorry Sir, that is not possible because we dont have sanction beyond Rs.500/- for this shot." Bapu Uncle said, "Okay, whatever, let us have it for Rs.500/-". When the director and the producer were reviewing the shots, Producer Saibabu wanted a richer look for the shot and asked Bapu uncle why costlier flowers were not used. Bapu uncle said, "Your man didn't allow us to buy costly flowers so we made do with flowers worth only Rs.500/-only. But we can digitise the effect to reflect higher quality." Saibabu gave a go-ahead. The final bill - from what should have been Rs.5000/- for flowers came as a shock to Saibabu - it was Rs.5.96 lacs!

Whose fault is it? Not Bapu Uncle - he is known for strict budgeting and cost control. It was the mistake of the Production Controller who should have checked with Executive Producer or the Main producer for not cutting corners with a crucial scene like that. Fifteen or more of such special effects, and you will easily incur a few crores more. Thats how film costs go up - but as I said not all costs are genuine - they could be marketing ploys to cough up higher satellite revenues. Thats the main point of this story - not to poke fun at anybody.

Sankranti and Tollywood Movies

Tollywood movies this Sankranti are likely setting the tone for what to expect in 2012. Two reclusive Babus are releasing movies whose titles start with "B" and have the same music director. The same Babus are later starting work on a multi-starrer to be produced by Dil Raju. How the fans of each other behave now will cast a shadow on the way the multi-starrer later is received. The situation is ...so upbeat between the movies - "Businessman" and "Bodyguard" that "Nippu" that Ravi Teja's movie got postponed beyond Sankranti. The only movie with village backdrop is Nandamuri Tarakaratna's "Nandeeswarudu" but I am not sure it will grab the eyeballs between two reclusive Superstars. Sankranti is not for the fainthearted and only established heroes test their appeal at the Box-Office for this season - the rest try their luck during "safe periods" - December, Diwali-Dasera and Summer holidays after EAMCET when chances of assured student audiences abound. Since we come from Village background, my family revels in Sankranti season - we watch all movies in those 3 days - back-to-back almost - and have usually found the Sankranti winner is usually a Surprise packet - the "Pandem Kodi" is actually the one you haven't bet on. But for those who feel happy about it, Mahesh Babu has beaten the record of Allari Naresh in getting a movie out within just 100 days of his previous movie "Dookudu". I hope 2012 brings out more such welcome developments where stars act in more movies, take on experimental films, co-star in multi-starrers, and take Tollywood to greater heights. Last year, we had dubbed movies like "Rangam" usher in the Sun's transit into the Northern Hemisphere. This year, its Telugu all the way - hope the year will be the best for Tollywood.

Most Volatile Asset-Class in 2011?

Which is the most volatile asset-class in India? Not Gold/G-secs/Art. Not Equities even at 25pc.volatility or minus 24pc in 2011. Not Real Estate. Easy- Its Indian Cricket. You can lift world cup, trump team no.11, get trounced by teams below in 1 yr.

Flipkart

Flipkart was the person of the year for book-lovers in 2011 and they are doing great service by delivering books at your doorstep and even offer cash on delivery for those who dont use internet or wary of netbanking. But how long will they bleed? Two things are going against them. A tirade against them by the publishers and a backout by Amazon - the big boys of books. Second thing first, Amazon ha...s now categorically denied any interest in buying flipkart or infibeam in India - they will enter on their own. This means, flipkart will now have to manage on their own despite a One Billion dollar valuation. They have hired their own courier, outsourced cash on delivery, and branched out into mofussil and non-metro locations in the scramble to get volumes that will interest buyers. Lastly, to talk about the tirade by publishers - a few weeks back, all the publishers from Hachette and Random House to Rupa etc. have summoned the owners of flipkart to stop bleeding them and retailers by giving discounts upto 35 per cent. In some cases, the publishers are giving 35 pc discount to Flipkart while they in turn pass on 40 pc discount. Nobody is complaining because the book-buyers are benefiting. But there has to be a sustainable model - and book distribution is not such a lucrative business. While there is boom on one side, there is gloom at the retail side - which I will address separately. Thats a little update on flipkart. In Hyderabad, they do now average 2500 deliveries a day. But sustainability and cash flows will sooner or later be called into question. Thats the point any PE Investor or Suitor will ask. As far as I know, close to Rs.4000 crores of receivables is getting stuck in Educational Institutions who order books but dont have money to pay - I am talking about the Engineering/Technical Institutions who are seeing a massive payment crisis which is actually a scam in disguise. Those who wish to know can PM'me...

New Year Greetings

"Past performance may not be repeated", say fund advertisements. All the more reason, why, for enduring a tough year 2011, I believe, 2012 is going to be our most memorable year even if the Mayans believe the world will end. Mahesh Murthy rightly said - if indeed the world will come to the end - more reason to live it as your last. Forget future babble (I don't believe these predictions just as s...omebody said the world war-3 will happen in 1999), hope you have a timeful mastery over present tense happiness, lots of gratitude for things already had, self-realisation, success at work and home, health and creative satisfaction, and lots of non-facebook fond memories and good news your way. May you get drunk in 2012 on matters that dont need endorsements from Liquor brands like Smirnoff, or Chivas Regal. 2012 is already an exciting special year - Olympics in a pound-foolish nation, Elections in dollar nation, all months having minimum 29 days, food inflation at 0.42 pc (Pick your cherries tonight for free!), stock markets and real estate more likely to go higher (after hitting where they want to go lower), tax-free rates of 8.25 pc, multi-starrer movies in Tollywood and movies which have Aamir Khan as villain, super-fine books and e-books in 2012 (and I will release my list of 2011 tonight or tomorrow) , Parliament getting tested at the lowest base by the commons, and Rupee and Reforms needing new filip.Exciting to be alive into the waking hours of 2012 - the pendulum of time keeps swinging back and forth, rarely pausing at the "sweet medium" of arc. Its for us to live life fully every moment. Happy New Year friends and Have an Year that gives a good account of yourselves!

Politics - Always in Flux

In politics, things are fluid and mood swings are quite sudden. I would have voted for BJP as many times as I have voted for Congress-I. But my soft corner for BJP is turning out to be sympathy for them. They seem rudderless, leaderless and unable to come with strategies that will fire the voters to root for them in the upcoming elections anywhere else. Any other opposition party will seize the opportunity that Congress has given in the last two years- but BJP is clueless, shrinking and diminishing its voter base with mindless antics, needless oppositions to bills in the form of flimsy amendments, and stalling Parliaments with the very bills that they once supported - in Pension, Insurance and Banking reforms let alone LokPal Bills. They are becoming anachronistic in a system and in the danger of getting alienated once again in 2014. As it is I see that their bastions will significantly over-turn e.g. Karnataka. Congress-I, on the other hand, has fired a master stroke in Food Security Bill - when 75pc of the population live on less than $2 per day, what they did will be heart-warming to the masses - even if capital markets and rating agencies don't like it for the fiscal woes it brings on. Forget that, I get a strange feeling now that Congress-I is smelling chances of comeback in 2014 because of a disarrayed opposition - and they may leave no stone unturned in the 5 state-elections coming up this Feb. I always had this theory that no matter when the elections are held -even tomorrow, lets say, - Congress-I with its massive history and vintage will always garner a minimum of 10 per cent vote-share pan-India- so what they need to tweak up is the balance 10 or 15 per cent - which can be for or against them. This is what they successfully do in states like AP where the oppposition is divided and votes can be split any time with a "third" force or the balmy announcement of a second state. That is its greatest strength - and now they are at half-time and with elections in UP, Punjab, Goa etc., they will gear up better. I guess for Congress-I, TINA factor is back to work once again. And their hundreds of man-years' experience helps Congress-I more than any party. Don't mistake me or my take with love and admiration for the party - far from it. I am trying to see things as they are - hard truth for our dear opposition. Customer Feedback again is the key to learn this and not Raspberry-quoted surveys of polls. I guess everybody will want to grasp the message in the title of a popular book by Ram Charan: Know What the Customer (Voter) wants from you. The incontrovertible truth is that there has been so much of fire and litmus tests thrown at Congress-I in the last three years from scams to Anna to venom in Parliament to embarrassments for their ministers and MPs that they have seen criticism stark nakedly - hence they will be more reflexive, adaptive and hopefully, move on with greater preparedness. Look at BJP or the Left. The left has not learned the lessons from debacles in WB or Kerala and still talk like GoP politicians on matters which affect common man. The BJP, again, and let me nail this for the last time, seems to have lost its appreciation of what is good for the country. They are oppposing Good Economics and playing Bad Politics. The GST Act would have done wonders to the pricing of essential goods in the country - but everybody knows that it is Narendra Modi which is oppposing the bill and in cohort with other non-Congress-ruled states in the country. Yashwant Sinha, who leads the Standing Committee has struck down most of the bills that will generate new employment, get us FDI and eventually lift more out of poverty - but he has struck down most of these bills. This only makes them more unpopular with the Industry and the middleclass who see more danger coming from a malfunctioning parliamnent which doesn't discuss bills necessary for our good. Actually, come to think of it - the parliamentarians and the politicans in the country need a basic grounding of Economics - so that they understand the costs of decision (and indecision)! And the voters - that include the 60 per cent of the voters who exercise their right to vote and the balance 40 per cent (who don't vote and have coffee-table discussions on voting) - all should understand basics of economics. It will do wonders to their overall well-being and may increase besides the GDP their gross domestic happiness! Believe me, I can explain this later.

Amar Chitra Katha - Alive and Kicking!

Do you know about Amar Chitra Katha? Those two-dimensional multi-color comics brought out by IBH and Uncle Pai? If you were born in the 70s or 80s, you wouldn't have missed reading ACK comics or its offfspring - Tinke Comics. My boyhood dreamsof "owning" all the ACK comics ever published was realised a few years back only. Thats about 240 comics in all out of 800 comics due to a fire mishap which destroyed the artworks of the original comics. Finally, those who followed the phenomenon of ACK would recall IBH sold off the perpetual rights of the comics to a Pune-based company called Geodesic for some Rs.22 crores. That is still a low price for a priceless heritage. Now, for all those who outgrew those comics, it might please you to note that ACK P Ltd - the new publishing house for these comics is trying to restore some of the comics lost in the fire and also bringing out titles every month over the last two years. So far, they have brought out 60 odd titles anew last few years which takes the complete list of ACK comics to 300 or 315 - though the volume no. is additive and counting above 800. So, the latest volume is no.831 and is on TENZING NORGAY - the man who climbed Mt.Everest. Amongst the new titles they brought out this year - "Lord of Seven Hills", "Ganesha and the Moon", "Tales of Indra", "Vaishno Devi Temple", "Chittagong Revolution" etc. are all racy reads and still evoke that nostalgia of the old comics. I have many friends who want to acquire the collection of these books again for themselves and for their wards. I have been acquiring some of these comics with an eye to resell for profit (they are as pricey as Art works of stature) or imbue them to a library of my choice over the past few years. I must say, I now have most of the 831 comics ever printed - maybe a hundred less - but I know I will get them all sooner. What sets the new titles beginning No.780 or so from the old titles is the different approach to comic design - it combines the new techniques of graphic novels with age-old narrative style fitting into 30 pages. Hopefully, it should appeal to the Harry Potter/Tolkien-reading generation next. Which means, you will be through in 15 minutes - faster than what it takes to swallow Nachos in multiplexes. At Rs.50/- per issue, I always bet that owning an Amar Chitra Katha title beats the bat out of inflation fears - I used to buy it at Rs.1.00 or Rs.1.50 per issue. Since 1977 or so, it has gone up 50 times, higher than the CII factor of inflation used for tax calculations. I have firm belief that Amar Chitra Katha comics will live on like any other nation's story-telling comics for several thousands of millieu in India. We don't have a Smithsonian Museum equivalent in India - but ACK comics fit the bill nearly well in that slot. Ananth Pai - the creator of those comics also passed away this year - but his legacy will live on. My family and a group of friends close to my heart share legions of experiences with Ananth Pai and his wife - I will share them separately some other time. Long live Amar Chitra Katha!