Showing posts with label Film Production Costs. Show all posts
Showing posts with label Film Production Costs. Show all posts

March 9, 2015

Dr D Ramanaidu - A legend among producers

D.Ramanaidu’s contribution to Indian Cinema in general and Telugu Film Industry in particular doesn’t end with his cremation. The man has played a major part in the evolution of films as a mass medium to growing their appeal and even profiting from their continuing appeal. On face value, the statistics of his achievements as a film producer are staggering: over 150 films in 15 languages including English, debut chances for 21 directors and a few music directors and several technicians. His life is an outstandanding example of how to choose a field you love and then grow in that field to dizzy heights and more importantly, stay relevant and be in the thick of action till the very end.  At the time of his passing, “Gopala Gopala” produced by his son is still running in theatres and a blockbuster called “Bahubali” is in production stages in which his grandson plays a pivotal role.The legacy created by Dr.D Ramanaidu is not just the negatives of those films or the studio but the values which are continuing with his sons Suresh and Venkatesh and his grandsons. His contribution and overall impact on the film industry is a nonpareil in the world of cinema.

He made epic films with superstars of the day, cast them in dual roles (“Ramudu Bheemudu”), made scripts out of top-notch novelists of the day (“Premnagar”, “Secretary”,”Jeevana Tarangalu”, “Agnipoolu”), created modern-day multi-starters with both heroes (Krishna, Sobhanbabu) and heroines (Jayaprada, Sridevi) and also several low-budget films once the budgets started soaring because of hero remunerations. He started productions in the name of his eldest son Suresh and created a decent-scale studio which allows film producers to walk out with the first copy of the film if they have a script in hand - it used to be the tagline in nineties itself before Ramoji Rao came and changed the mindset of thinking from small to big. Dr.Ramanaidu also remade his films into Hindi and created big hits which helped launch stars like Jitendra and gave a second lease to actors like Rajesh Khanna and Anil Kapoor. His model of film production is that he treated it like a sacred business where all the team members are treated well but expected to be professional. There were reports in trade weeklies of how Dr Ramanaidu used to return extra copies of video cassettes or prints to some distributors in north who didn’t budget correctly. Coming from agricultural background in Karamcheedu helped Naidu to count the pennies so that he won’t become a pound-foolish producer.
If you study the careers of the people who preceded Dr Ramannaidu, it appears Naidu learnt his lessons from them too. The most famous example is Dr Raghupati Venkayya - in whose name the most famous and prestigious award for contribution to Telugu Film Industry is given - an equivalent to Dada Saheb Phalke Award. Dr Raghupati Venkayya made the first talkie in Telugu and started a production company with his son R.Prakash. But where Dr Venkayya erred was in not entrusting the financial affairs of the studio to his son. Subsequently, Dr Venkayya’s company was mishandled due to staff ineptitude and financial mismanagement. His company ran into debt and Dr Venkayya became bankrupt. In many ways, Dr Ramanaidu’s life is a mirror reflection of the very opposite of what Dr Venkayya did; Dr Naidu gave his first son free rein in running the production house and the staff were treated well but with rewards for performance and stick for slippages. Which is why, when a few years back one of the foreign production houses came to Hyderabad to buy out Ramanaidu Studios, lock stock and barrel, the offer came to a staggering Rs.1400 crores. Dr Naidu shot down any proposal to sell the studios while he is still alive.

Dr Naidu may have well had a point in holding out. He has little reasons to sell - unlike Padmalaya Studios which had elephantine debt before selling to Zee or Annapurna Studios which had been constructed on land pre-leased from Government. Dr Naidu’s family has ensured that they are a formidable force not only in film production and post-production but also in distribution. Towards the end of the last decade before 2000, they have started cornering the exhibition trade after tasting blood in distribution and production. Lease Rentals were hiked by 200 per cent which allowed several hundreds of theatre-owners to become part of the distribution chain of Suresh Productions - this was soon to become a trend that made many distributors lament but it created an apple-pie of a fabulous business model that dictated the content that is exhibited for the last decade. Even the most talented film-makers had to seek the powerhouse distribution chain controlled by Dr Naidu’s family whether it is “Eega”, “Ashta Chamma”, “Uyyala Jhampala” or the upcoming “Bahubali”. Very few production houses in the country wield so much influence at the box-office as D.Ramanaidu’s family did. Which is why, offers will never cease to pour in. Ramanaidu’s son Suresh has not only consolidated the family business towards safety but also towards a stronghold status in the way the rentals prop up a revenue model which was not even funded by banks until a decade back. Today, even working capital finance is given to his company and a few other companies. Venkatesh, his second son, went on to become the producer’s son who remains always a producer’s hero - he belted many hits in his career, became a safe hero, helped deliver one-sixth of his career hits in his father’s production banner and helped create many multi-starrer movies. Venkatesh and Suresh together held the flag aloft and created the most successful film business family in South or North India. Only Yash Chopra films comes close to what Ramanaidu’s family achieves but Yash Chopra hardly made films in South.

Despite a cult status and a towering influence, Ramanaidu never shied from public service and his recognition as a TDP MLA is proof of his love for politics and achievements as the best Parliamentarian in 2003. Many swear by the support and moral strength given by Ramanaidu in their personal struggles and careers, for many Ramanaidus’ business acumen and discipline in fiscal affairs was a guide and pathfinder. Producers like VB Rajendra Prasad, Murali Mohan, Achi Reddy, KS Rama Rao, MS Raju, Dil Raju and now Bandla Ganesh sought his advice on making successful films and staying solvent - many listened but few benefited from Naidu’s sage counsel. But despite the many highs of Ramanaidu’s career and filmography, if one must objectively assess the man’s impact on Indian Cinema, there are few facets that glare out. By treating film business as much like any other business of trading/speculation/profiteering etc, Ramanaidu has been an exemplar of seeking risk-adjusted returns. So, we find that except for a few at the initial phase, mid-phase and some in the last decade of 90s, most of his films were forgettable hits which didn’t have the class appeal of some of the other producers and makers who made fewer than one tenth of the films that Ramanaidu made - like Murari, Krishnamraju, Krishna Reddy, Aswini Dutt, ANR, NTR, Bapu-Ramana, Edida Nageswara Rao, etc.). His films had the most formulaic content and represented a hackneyed mishmash of the hollowest content which also had the stigma of obscenity, truth be told. Except in occasional films when a classy actor like Kamal Hassan starred in “Indrudu Chandrudu” or a Suresh Krishna directed “Prema”, Naidu’s films after ANR and NTR era were lackadaisical and hardly classics. Loud dialogues, crazy stunts, socialistic and anachronistic themes and puerile songs with belly-dancing and hip-shaking item songs were the mainstay of his films - until son Suresh and Venkatesh changed most of that since they took centrestage. The films he re-made in Hindi with Jitendra, Rajesh Khanna and Anil Kapoor and even those with Venkatesh were intensely feudal and mascochist which merely perpetuated the male chauvinist appeal of the audiences. Towards the last decade, he virtually moved out of production scene and tried to salvage the catalogue value with arty films and message-oriented films. The last good film from his involvement was “Madhumaasam”. 

Despite the flaws which are natural in any film personality’s colossal career, Ramanaidu is a life that will be revered and respected as long as indian Cinema stands. The man gave us a volume of output that will remain forever unsurpassed; he made films as a career and as a business more lucrative than any other film-maker. He had a well-lived life, long enough to deeply impact Telugu film industry as it stands in Hyderabad today with wings spread strategically to wherever it can next re-locate or consolidate itself. Yes, there are regrets too - that he never bought more land than the sprawling acreage of Ramanaidu Studios where you get the best vantage view of the city, that he never directed a film, that he never made a multi-starrer with Rajinikanth and Kamal Hassan, that he never got a superstar after Chiranjeevi to act, that he couldn’t make a remake of “Ramudu Bheemudu” with NTR Jr. The list may go on like a litany but the legacy he left is richer than what the unfinished business could have achieved. Respect, for Dr.Ramanaidu always. R.I.P

#Ramanaidu #SureshProductions #DRamanaidu #DrRamanaidu #Tollywood #FilmIndustry #Bollywood #Indianfilmindustry #MovieReviews

September 3, 2012

The Business of Tollywood: An appreciation of film costs

"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.

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