"Julayi" movie collects over Rs.11 crores in Nizam region. "Eega" movie collected over Rs.15 crs. in the same region during its 50-day run. "Sudigaadu" collected over Rs.2 crores in Hyderabad region alone in its first week clocking over 91 per cent occupancy on opening weekend. So, Tollywood has had a better run this year compared to previous year as many of big-star releases turned out to be good hits starting with "Businessman". The run of Tamil film releases this year dubbed into Telugu hasn't been that great despite increasing openness and awareness of Kollywood films in Andhra Pradesh.
Now that the starting bets have been good for Tollywood, the season in the second-half of the year is hotting up with some spectacular releases lined up. "Life is Beautiful"(Shekar Kammula), "Shirdi Sai" (Nagarjuna), "Rebel" (Prabhas), "Cameraman Ganga tho Rambabu" (Pawan Kalyan) and so on...looks like September - October will see some big-ticket releases including the much-awaited multi-starrer "Seethamma Vakitlo Siri Malle Chettu" (Mahesh and Venkatesh), we'll call it "SVSMC".
Let's guess how the costing of "SVSMC" will add up. I have taken a ball-park estimate based on some simplistic back-of-the-envelope calculations of how these costs will add up and later how they will be marked to recover. They may be wrong but I hope the thought process should clarify to you how film costs generally add up in budgets which are becoming huger and monstrous. It becomes necessary to understand them because the blind bets are placed by the group who are not impervious to the speculative nature of films - the Movie Distributor. Lets see an example, first, before we conclude:
"Seethamma Vakitlo Siri Malle Chettu" Movie Costs:
Superstar Mahesh Babu's Remuneration: Rs.8 crores.
Victory Venkatesh's Remuneration: Rs.4 crores.
Director's Remuneration/Music Director Rs.2 crores.
Samantha's remuneration Rs.1 crore.
Miscellaneous artists remuneration Rs.2 crores.
Miscellaneous technician's remuneration Rs.3 crores
Shooting cost for 100 Days @Rs.5 lacs Rs.5 crores.
-----------------
Total cost so far for SVSMC Rs.25 crores.
Since it is unlikely that the producer will bear all the costs by self, he will take loan @ 3 per cent from the money-lenders and financiers to fund this cost. That will be about Rs.4.50 crores. Or roughly, say Rs.5 crores. That means the total cost without budgeting any contingency run-ups and other escalations by delays caused due to other reasons comes to Rs.30 crores.
We haven't added the distribution and marketing costs including the audio function which is becoming an eye-ball attracting event. Considering these, it becomes imperative to keep costs and shooting schedules under tight leash and you have to raise the buzz about the movie well-before the release so that you can out-sell and recover the costs as effectively as possible.
How do we recover the costs?
Satellite rights recover a good sum, say Rs.6-8 crores. Then comes overseas territory sales which can fetch about Rs.3-5 crores. Then comes the big stakes of Andhra Pradesh which will be sold at whopping sums. Take Nizam Region, for example. Assuming each show sells Rs.20,000/- multiplied by 7 days multiplied by 5 shows average multiplied by 350 screens will give Rs.24.50 crores. Thats how the bets will start at first- then they will negotiate it down or up based on the eyeballs and added attractions in the movie. In this whole game, commercial banks play it safe in recovery of costs - they will not fund above Rs.5 crores and get away with their interest and principal repayments well before the release of the film.
The riskiest category will be the distributor who can expect a return in binary numbers, zero or one, meaning hit or flop. If its a hit, they rake it in. If its a flop, they are finished.
But coming back to the crux of the budgets, this is broadly how they stack up and this should give you an example of how film costs are incurred, how they are marketed and how they are recovered.
Now that the starting bets have been good for Tollywood, the season in the second-half of the year is hotting up with some spectacular releases lined up. "Life is Beautiful"(Shekar Kammula), "Shirdi Sai" (Nagarjuna), "Rebel" (Prabhas), "Cameraman Ganga tho Rambabu" (Pawan Kalyan) and so on...looks like September - October will see some big-ticket releases including the much-awaited multi-starrer "Seethamma Vakitlo Siri Malle Chettu" (Mahesh and Venkatesh), we'll call it "SVSMC".
Let's guess how the costing of "SVSMC" will add up. I have taken a ball-park estimate based on some simplistic back-of-the-envelope calculations of how these costs will add up and later how they will be marked to recover. They may be wrong but I hope the thought process should clarify to you how film costs generally add up in budgets which are becoming huger and monstrous. It becomes necessary to understand them because the blind bets are placed by the group who are not impervious to the speculative nature of films - the Movie Distributor. Lets see an example, first, before we conclude:
"Seethamma Vakitlo Siri Malle Chettu" Movie Costs:
Superstar Mahesh Babu's Remuneration: Rs.8 crores.
Victory Venkatesh's Remuneration: Rs.4 crores.
Director's Remuneration/Music Director Rs.2 crores.
Samantha's remuneration Rs.1 crore.
Miscellaneous artists remuneration Rs.2 crores.
Miscellaneous technician's remuneration Rs.3 crores
Shooting cost for 100 Days @Rs.5 lacs Rs.5 crores.
-----------------
Total cost so far for SVSMC Rs.25 crores.
Since it is unlikely that the producer will bear all the costs by self, he will take loan @ 3 per cent from the money-lenders and financiers to fund this cost. That will be about Rs.4.50 crores. Or roughly, say Rs.5 crores. That means the total cost without budgeting any contingency run-ups and other escalations by delays caused due to other reasons comes to Rs.30 crores.
We haven't added the distribution and marketing costs including the audio function which is becoming an eye-ball attracting event. Considering these, it becomes imperative to keep costs and shooting schedules under tight leash and you have to raise the buzz about the movie well-before the release so that you can out-sell and recover the costs as effectively as possible.
How do we recover the costs?
Satellite rights recover a good sum, say Rs.6-8 crores. Then comes overseas territory sales which can fetch about Rs.3-5 crores. Then comes the big stakes of Andhra Pradesh which will be sold at whopping sums. Take Nizam Region, for example. Assuming each show sells Rs.20,000/- multiplied by 7 days multiplied by 5 shows average multiplied by 350 screens will give Rs.24.50 crores. Thats how the bets will start at first- then they will negotiate it down or up based on the eyeballs and added attractions in the movie. In this whole game, commercial banks play it safe in recovery of costs - they will not fund above Rs.5 crores and get away with their interest and principal repayments well before the release of the film.
The riskiest category will be the distributor who can expect a return in binary numbers, zero or one, meaning hit or flop. If its a hit, they rake it in. If its a flop, they are finished.
But coming back to the crux of the budgets, this is broadly how they stack up and this should give you an example of how film costs are incurred, how they are marketed and how they are recovered.
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