The world of films

Acquiring global rights is the new mantra in Bollywood, even if it means putting all eggs in one basket

Acquiring global distribution rights of films is a trend that is fast catching up among the film companies. Recently, Subhash Chandra's Zee Telefilms acquired worldwide distribution rights of the forthcoming film Halla Bol for roughly Rs 24 crore.

With this acquisition, the filmmakers "" Rajkumar Santoshi and Indian Film Company, the film investment and IPR (intellectual property rights) company of Network 18 "" have earned close to Rs 9 crore much before the film's release.

Zee Telefilms is just one among the other media biggies, such as Eros International, UTV Motion Pictures, Adlabs Films, who are on a spree to acquire global distribution rights of Hindi films. These include music rights, satellite rights, new media rights, home video rights and theatrical rights, both domestic and international.

Traditionally, filmmakers sold these rights individually. The trend started after Eros International acquired the global rights of Omkara followed by Salaam-e-ishq and Eklavya, among others.

Even now, the company is ahead of the pack having acquired worldwide rights of the forthcoming Bollywood movie Heyy Babyy for close to Rs 37 crore apart from the worldwide rights it acquired for Salman Khan and Govinda-starrer Partner for close to Rs 40 crore and Farah Khan-directed Om Shanti Om for over Rs 70 crore.

As for the others, Percept Picture Company is believed to be in talks for acquiring global rights for a Hindi flick to be released later this year and UTV Motion Pictures is trying to work out a deal for about three films, also slated for release this year.

Adlabs Films, too, has acquired rights of the recently released Bollywood movie Cash for nearly Rs 25 crore. The budget of this movie was said to be Rs 18-20 crore.

The trend, say industry experts, is fuelled by the coporatisation bug wherein a filmmaker eliminates negotiations with several territory distributors and sells the film's rights as a package to one company that has the option of re-selling.

"While the producer sells the entire movie's rights to one distributor in a single deal, rights acquisition makes sense for a company that is in the process of collating various verticals," said Sunil Kheterpal, COO, Adlabs distribution.

Also, the production houses are now able to recover the cost of production prior to the film's release. For instance, Eros' much spoken about acquisition of Om Shanti Om earned the production house ""Shah Rukh Khan's Red Chillies Entertainment"" a whopping amount by simply selling distribution rights.

According to industry estimates, a filmmaker earns around 15-20 per cent from music and home video rights, 20-30 per cent from satellite rights, 10-20 per cent from overseas theatrical distribution and 35-45 per cent from domestic theatrical distribution.

"By selling the rights to one company, the production house is able to hedge their bets and saves the production house the trouble of negotiating with several distributors," said a film analyst. Apart from the revenues that the filmmakers earn via distribution, they also have a profit-sharing deal post release. Usually, this ratio is 50:50.

So what's in for the acquirers? "It gives us control over the value chain and helps us integrate our business," said Sunil Lulla, president, Eros International. Integrated media companies that are operational across platforms are the usual bidders as a sound content profile gives the company an edge over competition.

"Also, it brings accountability in the business and since it is one corporate (distributor) dealing with another (theatre chain), we get a strategic tie-up and can plan our marketing efforts," said Saurabh Varma, vice president (programming & distribution), Inox Leisure.

The theatre chain has tie-ups with Adlabs Films, Studio18 and Eros International to showcase movies that these media companies acquire.

On the flip side, if the film fails to deliver at the box office the onus is on the one distributor, which means that a single acquirer bears the entire risk.