Superhit session for film makers

Like the proverbial silver lining, the falling value of the rupee has resulted in increased collections abroad for Indian film producers. As the dollar gets costlier, studios in India stand to make more rupee for every dollar earned. This implies that even if the ticket rates have not gone up since last year, studios stand to earn Rs 7-8 more for every dollar this time.

International distribution deals are structured in three broad patterns — direct distribution where studios work directly with cinema chains in key markets, commission deals where producers work with distributors on commissions linked to the films’ performance and minimum guarantee structures where studios license limited rights for a limited term to distributors for a minimum guarantee licence fee. In the last structure, once costs and minimum guarantees are recouped, the sub-distributor shares the overflows on terms agreed on.

Amrita Pandey, executive director (international distribution, syndication, Disney media distribution, studios), Disney UTV, says: “The rupee value actually has no direct relation to the collections in international markets — as international collections are targeted and achieved in dollar equivalents of international currencies. What influences collections is the demand for the movie, marketing, distribution strategy, release period and so on...”

 

According to Kamal Gianchandani, group president PVR Cinemas, the rupee fall has helped Bollywood. He says: “There is no doubt that distributors who export Bollywood movies overseas today are laughing all the way to the bank thanks to the weakening rupee. They are getting around 10 per cent more on the conversion from dollars to rupee compared to collections last year.”

 

Disney UTV Studios and Red Chilies Entertainment's co-production Chennai Express with Shah Rukh Khan and Deepika Padukone as the lead pair has raked in $10 million approximately till 15 August in overseas collections. This converts to Rs 62 crore. On the other hand, Yash Raj Films' 2012 blockbuster Ek Tha Tiger starring Salman Khan collected $19 million which at the time ($1 = Rs 56 approx last August) converted to a little more than Rs 105 crore. Had the Salman-Katrina spy thriller released today, with the same collection in dollars, Yash Raj would have been richer by almost 10 per cent.     

 

Independent distributor and trade analyst Suniel Wadhwa feels that not all movies will benefit. 'Not all films work in the overseas market the way they work in India. In India all the films even small film which is content driven and has very limited appeal will be released. However, it may not be released overseas as cost of releasing the movie is too high and it doesn't justify the release of the movie. The benefit of the falling rupee is for the producers for star cast driven films with good content and not for smaller and medium films.'

 

In case of exhibitors though, there isn't much different. The ones in a quandary are distributors importing Hollywood movies to India where the cost of acquisition has increased by virtue of the dipping rupee. Here too, the increase is by 10 per cent, but it cannot be easily recovered. Even when Hollywood movies are gaining traction with the Indian audiences, the distributors cannot transfer the cost onto the movie goers or exhibitors. 

 

Wadhwa addss, 'Importing Hollywood movies is getting expensive as all the movies which are imported are Non-Studio and most of them don't have market except for be 2-3 movies. At times, it isn't even possible (for distributors)to recover cost of royalty paid to International sales agents.' he also says that there are not many independent importers left in the industry and those who still operate are facing a hard time to release the film and recover costs.

 

In this case, they analyse the business plan in a way that they can accommodate the added cost and depend on their gut while choosing the movie and deciding the release.