Producers’ Council must plug revenue leaks at once

However, films like Baahubali 2 are rare. The major reasons for several films’ commercial failure are revenue leakages that vary in proportion for each film. 

Limited releases: Tamil Nadu has around just 1,000 screens, while the state needs minimum 2,000. Hence, even films with box office potential suffer in their collections, due to release in fewer screens. With multiple films releasing every week, revenue is lost for most good films. Recent example is 8 Thottakkal . What we need is more screens and streamlined releases. 

Ticket prices: While the government has fixed ticket prices, for several films, the theatres and exhibitors fix ticket prices and sell accordingly. For Baahubali 2, most small towns were selling at Rs.100, against the fixed price of Rs.30 to 40. However, this difference is not accounted to producers but taken away by distributors. The state government must rationalise ticket prices before GST is implemented to ensure transparency in accounting of ticket prices. 

Ticket sales accounting: Despite films doing well in theatres, there is a huge gap in reporting actual ticket sales. Most indulge in under-reporting by 10 – 25% as there is no computerised ticketing and accounting and producers rely on what is reported by theatres. The Producers’ Council must work towards computerising ticket sales to plug this revenue leakage. 

Online piracy: Online companies like Amazon Prime Video, Netflix have entered in big way and started acquiring films at good prices. Considering the potential of digital online cinema, they may pay higher prices and acquire more films, including small ones, if films are not leaked through online piracy, which is their big competition in earning potential revenues. Online piracy has become the starting point of all forms of piracy and there is an urgent need to ensure strong controls to enhance revenues from all fronts. 

Physical piracy: This is the biggest threat to footfalls in theatres. The more the good quality pirated DVDs available in market for a new  film, the lesser the footfalls. Various surveys indicate that almost 4050 per cent of revenues are affected by piracy. President of TFPC Vishal complaining about piracy of Baahu bali 2 with the Police Commissioner and they immediately raiding shops and unearthing thousands of copies of pirated DVDs reflects the kind of proportion piracy has reached, affecting the box office. 

Cable piracy: Most satellite companies either stopped buying or slashed satellite right prices mainly due to rampant cable piracy. Cable piracy has almost replaced official satellite telecast. Cable piracy of new films and illegal screening of clippings and songs of new films without paying for them, is a big revenue leak. 

For all types of piracy, only the government can take strong measures and the producer’s fraternity is expecting some concrete action plan.

Perpetual rights: While Hindi film industry sells satellite and digital rights for a limited period, only for India, in the South, especially Tamil cinema, all rights are sold for perpetuity, for worldwide, thus removing scope for future revenues to producers. The concept of perpetual, worldwide assignment of all rights must come to an end. The Producers’ Council must bring in a control over this, to safeguard producers. 

High cost of funding: Most producers borrow money from traditional financiers at a high interest, ranging from 28 to 48 per cent per annum, which takes away large revenues. The Producers’ Council must bring in some cap over interest rate, for producers to reduce their cost. 

These key revenue leakages must be plugged as priority for the industry to grow.