Raising their hackles again
By Sathish on Dec 09, 2009 with Comments 0
The year 2009 seems to be a jinxed one for the film industry. Just when the box office is coming alive, a new battlefront has opened up between multiplex owners and film producers over the latter releasing films on direct-to-home (DTH) platforms soon after the theatrical release.
The trigger for the stand-off was the unexpected release of the UTV production Main Aur Mrs Khanna on pay-per-view channels on DTH just five days after its release in the cinema halls on October 16.
According to industry sources, the movie caused a dent in multiplex revenues but raked in over Rs 20 crore from DTH screening, creating a new benchmark.
Vishal Kapur, COO, Fun Cinemas, says that though there is no formal agreement or clause on DTH releases, it isn’t fair to the exhibition industry. “The 50:50 revenue share producers forced on us in April has already taken its toll. We have to now think twice before expanding to tier-II and III cities,” Kapur told Brand Line.
He believes that if the trend were to continue, it would hit box office sales. “We have expressed our concerns with the key distributors but if this fails we may be forced to insert clauses against early DTH releases in weekly distribution agreements,” he added.
Slumdog Millionaire sets the pace
The trend pioneered by UTV last year with the release of Oye Lucky Lucky Oye on DTH, gained momentum after Danny Boyle’s Slumdog Millionaire sold more than 1.5 lakh pay-per-views within the first three days.
“ Slumdog made the industry sit up and take notice of DTH as a platform that could be taken seriously,” said Vikram Mehra, Chief Marketing Officer, Tata Sky.
Even though it has created a furore in the industry, producers believe that they need to keep abreast of modern technology and look at innovative avenues to make the moolah. They are confident of returns from the DTH homes, even if the box office returns from a film are disappointing. “We believe that each platform has its own audience and release pattern. Going forward, all the stakeholders need to agree on specific release windows. Film exploitation must keep abreast of technology and monetise all emerging revenue streams without compromising either consumer convenience or business ethics,” says a spokesperson for Big TV, which is part of the ADA group which straddles film production, exhibition and DTH.
Multiple launch platforms
According to a top executive of a leading production house, there are over 1.8 crore DTH connections.
“Even if 10-15 per cent of the subscribers go for movie-on-demand and just pay Rs 50-100, the figure still works out to Rs 15-20 crore which no producer would like to miss out on,” he said.
At the moment, a DTH operator makes about Rs 3 crore on a new film from subscription revenue, half of which in most cases is given to the production and distribution house.
Apart from this, another reason why filmmakers try to get back their money in the first flush is on account of piracy. “Having a shorter time lag will allow the industry to cuts its losses on account of to piracy, they say.
For Rs 50 viewers can watch a DVD quality movie which would help the industry in the long run,” said Hiren Gada, CEO of Shemaroo Entertainment, a home video distributor.
The Rs 10,000-crore industry loses approximately 40 per cent of its prospective earnings due to piracy.
The only way to maximise revenues is to have multiple launch platforms. “DTH has emerged as a preferred alternative for the entire family.
Cost is a big issue in these times with a four-member family typically coughing up over Rs 1,000 on a movie,” said a film trade analyst.
Though pay-per-view subscribers are a minuscule proportion — less than 100,000 among 70 million cable and satellite homes — one can see the shape of things to come.
According to an Angel Broking report on multiplexes, DTH has witnessed a sharp increase in penetration levels from a mere one per cent to 12.5 per cent. “DTH is estimated to post a robust 23.2 per cent CAGR over FY2009-14.
Source: The Hindu Business Line
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