Press Release

Producers Raju Hirani and Vidhu Vinod Chopra feel Aamir will work his magic

9 December 2014

The long-awaited Aamir Khan-starrer 'PK' will release in a few days and producers Raju Hirani and Vidhu Vinod Chopra are a worried lot. But not for the reasons that you and I think. The makers of the much-acclaimed Munnabhai series are not so much focused on audience reception and reviews as on the negotiations with satellite television producers who are extremely reluctant to pay top dollar to Bollywood's priciest productions.
The big four broadcasters — STAR, Sony, Colors ( Viacom) and Zee, decided about a year ago to stop buying satellite rights of films in production. Film producers reacted with anger and dubbed this as an act of cartelisation. But their wait for a break in the broadcasters' ranks has proved never-ending and infuriating. Now, their only hope is that Aamir Khan's magic will somehow make broadcasters see light and drop their resistance. It is a high stakes battle and there is tonne of crores at stake on both sides. The last big satellite deal signed was by STAR for UTV's '2 States' for Rs 13-15 crore and 'Highway' for Rs 3-5 crore. Many films are lying unsold, including the critically acclaimed 'Haider'. While producers are crying foul, the channels are using business logic to justify their stance.
A few years ago, all this was well outside the realms of the possible. Broadcasters loved satellite rights as they could show a movie for a 2-3 hours and gain higher gross rating points than a 30-minute serial slot. Producers had the chance to showcase their film before millions of viewers. While there has been a growth in the overall box office, the biggest cinema hall today is TV.
The biggest film can only draw in an audience of 2-3 crore people while a television premiere can reach 20-30 crore people, making satellite an indispensable part of a film's strategy, both in terms of revenue and eyeballs. But all this began to break up a year ago when broadcasters realised they were paying too much money for movies and that the returns were somehow not justified. The prices, they felt, had escalated beyond what they could afford and some new rules had to be framed.
They decided that only one broadcaster would approach one film, leaving the producer with no choice but to take or leave the price being quoted. No satellite rights would be bought till a film was released and the rights would include digital rights and the terms of the rights would be nothing less than 10 years, unlike the five or seven years. A ceiling was set even for the biggest films which reports say is approximately Rs 40-45 crore. There would be no payment beyond that. STAR India COO Sanjay Gupta says ratings from films have remained the same in three years adding that the return on investment (RoI) has worsened in the past three years.
He added saying STAR had a strategic shift in strategy and a bigger focus on fiction rather than films. "We are focusing on investing in high-end fiction, like we did for 'Mahabharat' or now Ashutosh Gowariker's 'Everest' or Vipul Shah's 'Pukar' or our very successful 'Mahadev'. So, while we will continue to buy films, our bigger focus is on fiction," adds Gupta. In fact last year, Gupta led one of the biggest changes in the satellite industry by signing an exclusive direct deal with Salman Khan and Ajay Devgn for their films over a five-year period.
Other broadcasters too denied any cartelization, pointing instead to changed business circumstances. Colors feels it's a single channel and cannot justify price beyond certain band, while Sneha Rajani, deputy president & head, MSM Motion Pictures and also incharge of buying films for Sony channels, says she's "busted her budget already" and has no more money, with her deal with Yash Raj Films already in place.
Zee's Jayantilal Gada sticks to the fact that no film has value beyond a certain price. Yet, we hear Zee has closed the 'Happy New Year' deal for Rs 53 crore. The deal being a combined one, involving some performances as well as appearances by Shah Rukh Khan.
Reports within the television industry say 'PK' (to be released on December 19) may break the broadcasters unity, though the reported asking price may put off many people. Producers may just be hoping that Aamir Khan delivers not just at the box office but also strikes a blow for their fraternity. Source: Economictimes.indiatimes.com

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