Life after boxoffice – BollyBusiness Exclusive

Life after boxoffice

The Box Office, however, is only one of the many many avenues available for a film to recover its money. In fact, in the west (Hollywood and the European industry), Box Office revenues make up less than half the total revenue that a producer makes. The other avenues include TV Rights, which are then divided into Satellite (Sony, Star, HBO etc), Terrestrial (Doordarshan), Pay-per-view (DishTV, Tata Sky or Airtel) , Home Video Rights, Music Rights, Mobile Rights, Internet Rights, Ancillary rights (airline rights, hotel rights, ship rights) and indirect sources such as merchandise, comics and for successful films, even remake rights (for example a successful Tamil film could be remade in Hindi).

The split of revenues of a film as as follows:

Right

Big Film

Small Film

Domestic Theatrical

35%

39%

International Theatrical

18%

6%

Home Video

7%

7%

Music

14%

14%

TV

25%

33%

Ancillary

2%

2%

TOTAL

100%

100%

Television

For a big, commercial Hindi film, more than half the revenue (about 55%) comes from the box office domestically and internationally. The next big ticket item is Television rights. Satellite channels have been paying out ludicrious amounts of money for the rights to play the film. These rights are usually sold for a multiple year period (3, 5 or 7 are the most common) and the channel that buys it then has the right to show the film as many times as it wants in that period. A newer model that is emerging is the “Syndication Model”, in which rights are sold “per-play” instead of a fixed number of years. This ends up yielding more actual revenue to the producer but over a much longer period.

Home Video

Home Video in India is currently a small but very fast growing segment. It is actually the largest segment of a film’s revenue in the west but becuase of rampant piracy in India (and amongst the NRI community abroad), the home video market doesn’t yield much. This situation, however, is changing rapidly because of 2 major factors. One – the time period between a film’s theatrical release and the home video release is getting ever shorter (from an average of a few months earlier to a few weeks now). And second – the introduction of ultra low cost titles from players like Moser Baer and now T-Series has seriously cut into the pirate market. From a current share of about 7 – 10% of the revenue of a film, Home Video should end up commanding about a 15 – 20% share in the next few years (still way off the 45% that a western movie gets from home video).

Music

Music at one point used to be the mainstay of the Indian industry after theatrical. The advent of MP3s, the internet and digital piracy completely killed this. From about 2002 – 2006, music was dying a slow death of a cancer it could find no cure for – piracy. Then in about 2006, its savior came in the form of mobile content. Ringtones, caller back tones, ringback tones, monotones, polytones and the like completely changed the landscape. While it isn’t back to its historical position in the pecking order of things, music is again a driving force in an Indian movie’s revenues.

Ancillary Rights

With the advent of of new platforms like the internet and mobile phones, various new avenues like wallpapers, videos, internet downloads, themes etc. have emerged as small but credible sources of revenue for a film. In addition to these platforms, various other sources like airlines, ships and hotels have begun buying rights to Indian films with the increase in Indian tourism all over the world.

So all in all, especially for a smaller film, life after the box office is getting increasingly important and lucrative. As the industry matures further, more changes will occur and the basic economics of a film will continue to change and evolve, and due to this, allow producers to experiment with their content, which will allow for better and more varied content for the viewing public.

Regards

BollyBusiness

 


~ by Yakuza on March 17, 2009.

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