Eros strengthens focus on South Indian film industry

Even as UTV and Fox have slowed their march into southern market, Eros has a slate of 12 releases

After a shaky start to its campaign down south last year, Sunil Lulla-led film studio and content distribution company Eros International has finally found its footing in the south Indian film sector. The company has slotted 12 south Indian films for release this financial year, outstripping even the number of Bollywood releases for the year.

Lulla, managing director, Eros International, says, “The South market is going through a phenomenal phase right now with some of the biggest recent hits in Indian cinema like Baahubali, I (Ai) and our own Srimanthudu, to name a few. We have recently announced other projects — Natasimha Balakrishna’s Dictator, Pawan Kalyan’s Sardaar Gabbar Singh etc.”

He adds, “While we are working with the top talent in these markets, we also want to back projects with fresh concepts and scripts that will help recognise promising talent in the South film industry. Our strategy is to invest in high quality film content and monetise it across existing and emerging revenue streams along with traditional and emerging platforms.”

Of the total revenues for Eros, Bollywood accounts for 70 per cent, while regional cinema accounts for the rest. Of the remaining 30 per cent, a major chunk comes from the south Indian projects. In FY16, Eros plans to produce a couple of Marathi films as well.

Last year, Eros had backed not one, but two Rajnikath projects — Kocchadaiyyan and Lingaa — both of which failed to impress at the box office. While the company maintains the losses from these projects were not phenomenal, there were media reports of regional distributors and exhibitors asking for a refund on the money paid to play the movie at their properties. Losses notwithstanding, it was an important lesson that the studio needs to get hands-on with the projects.

The strategy now is taking a 360-degree approach for the Southern market and will be involved with the entire gamut from acquisitions for distribution to creating own projects from concept and co-productions. Lulla says he sees a huge potential in regional cinema and will focus on developing projects for which Eros is already signing talented writers and directors.

Apart from this, the studio has realigned its strategy towards the costing of a movie. “It is not just the movies but the pricing that is responsible for the success or failure of a film. Our strategy is to de-risk our investment through pre-sales where we aim to recover a majority of our investment through contractual commitments, even before the theatrical release of the film. Not just a good story but correct pricing, astute marketing and promotions of a film attribute to the final outcome,” says Lulla.  

Other studios that operate in Bollywood have also tried their hand at establishing their presence in the south Indian film market. In 2014, both UTV Motion Pictures and Fox Star Studios had major plans for the region, but have slowed down their operations this year. Neither studio has offered any reason for the same, but both maintain they are looking at south India as a focus market in the long-term plans. UTV’s south India operations are currently undergoing a revamp and restructuring, sources say.

Eros’ focus on the south Indian market has been met by a mixed response from existing players. While on the one side people are welcoming these companies, on the other they are complaining these firms are the key reason pushing costs.

A leading distributor, who belongs to the first category, says this would bring some organised structure and professionalism.

He adds they are coming at a time when there is no fund available in the sector. A studio like Eros also brings to the table its overseas distribution might, which benefits the sector since Tamil Nadu and Andhra Pradesh have a considerable ex-pat population overseas, as does Karnataka and Kerala.

A cross-section of producers and distributors have said the major challenges for the south Indian film industry is finance, under-exploitation of the international market, limited exploitation of non-theatrical revenue streams, a steep increase in cost structure, etc.

While studios like Eros can provide a solution to most of the challenges, some players say these studios the key reason for escalating talent costs. Unfamiliar with the sector’s cost structure and revenue potential, these new players offered excessive remuneration to the actors and technical talent and increased the cost structure considerably for all the producers.

After Tamil and Telugu films, the studio has now forayed into the Malayalam market with director Jeethu Joseph’s Life of Josootty that releases on September 18. Kannada is on the anvil, too. Lulla reiterates his conviction in the south market saying, “We will continue to enter new markets with focus on aligning with existing as well as emerging talent and exploiting content across formats.”