Overseas market has grown leaps and bounds over the last few years. Just to gauge the impact, the first million dollar movie is Dookudu in 2011. As per boxoffice.telugu360.com, the market has increased exponentially from 2 million dollar movies in 2012 to 13 million dollar movies in 2017. The market rights for top stars have increased 5-8 times circa 2011. However, the market has been completely unregulated with newcomers with little to no knowledge buying movies without understanding the risk. Examples are abound where high profile movies failed big time, recovered only 20-30% of the investment. Similarly , some films though generated decent revenue, incurred high losses due to upfront overprice paid to the producers.
Also, due to the crazy price war among distributors, prices of movies have increased ridiculously. All the English and Telugu movies can be watched in best theaters in US from $6-$10. However for top stars movies, one has to shell out anywhere from $18-$25. Who is benefiting from this? Not the average audience, not the exhibitor, not the distributor, not the producer (in most cases). All this benefit has gone to affluent top stars.
Time for a change finally….
Sources told Telugu360 that top overseas distributors have met and decided to form a chamber/association to both regulate and advice Overseas buyers. Most of these are up for change, but some of the rules that are contemplated are:
- All the movies have to be bought with approval of the association and they will advice on the price. A threshold being discussed is – average of the heros hit and flop movie and directors hit and flop movie (not exactly a scientific way, but something to start with). Going by this metric, NTR Trivikram’s next will be valued at 9C, which is a reasonable price. Not a bad formula.
- If a distributor looses more than 40%, then movie producer has to refund the remaining loss. Otherwise, the chamber will make sure future movies of that producer will not be released in Overseas market
- If any party buys without chamber’s consent, the association will be working with theater chains and top websites to block schedules/advertisements for that movie
- Exhibitors no longer need to buy for a city/state. The chamber will guarantee payments and can buy a % of the movie directly with the chamber.
- For movies below 10 Crores , distributors should go for theater pricing and for movies above 10 Crs price is capped at $15.
We are not sure if some of the proposals are pragmatic and in the competitive environment there is always incentive to bypass the rules. In offline discussions with most distributors, we have always advocated for reduced pricing. The strange part is almost all the distributors want to reduce the pricing, but they can’t because they fear a competitor might go and buy the movie and price higher. May be this chamber is the solution?
May be all the top distributors should set some ground rules such as Pricing, Maximum loss of 40% etc. For example, everyone can agree on pricing and then quote prices based on number of people they think might watch the movie. Overseas distributors have to realize that no one except the affluent heros are benefiting from increase in overseas market, which is hard earned money of distributors, exhibitors and every NRI.
There ain’t a bad time to start a good effort!!
