The right side of money!

Komal Nahta

This time, let me take you through the business of film production.

Producers have never had it as good as they are having it today. Five years ago, only established banners could make table profits of a few crores on the day of release of their films.

By table profit, I mean a net profit irrespective of whether the film is a hit or a flop. Generally, big films produced by top banners find ready buyers. Therefore, in this case, a table profit is assured. If the film clicks, distributors are happy -- it is they who stake huge monies on the big films, after all.

But if the film happens to be a flop, like Dil Se, the loss is the distributor's.

THE scene today is, any producer who can put a good project together can easily make a profit of several crores on the day of release of his film. This, too, is table profit, irrespective of whether the film hits bull's eye or not.

When I say a good project, I mean a film starring saleable names. Cases in point: Hrithik Roshan, Shah Rukh Khan, Salman Khan, Anil Kapoor and Aamir Khan.

Of course, Sunny Deol and Ajay Devgan are also considered hot, but films starring these action heroes don't have too many buyers in the overseas territory.

Which brings us to the point of the overseas circuit.

TODAY, overseas territory itself finances half the film production.

A good film fetches anything between Rs 6 and 10 crore for overseas rights. Why, the day is not too far when films will be made solely with monies received from the foreign circuit. The overseas, music and satellite rights are the three most important territories for a film producer.

Audio rights of films are also attracting buyers at unheard of prices. An 'A' grade proposal easily fetches Rs 6 to 10 crore for its music rights alone!

Prices for satellite rights of films vary from Rs 2 to 5 crore. This for a limited period and a limited number of screenings during that period.

With so many television channels, software commands a premium. And we all know that films and film-based software are being sold at the maximum premium.

So if a producer were to launch a film with a couple of saleable stars, a top director and popular technicians, he can easily sell the overseas, music and satellite rights of the film for a total value of about Rs 15 to 20 crore.

OF course, this is based on the assumption that his proposal is 'A' grade and devoid of any problems. Usually, the total cost of a does not exceed Rs 20 crore. So whatever money the producer gets from his rights from the various territories in India are a bonus. That recovery is his net profit.

Take Fiza. The first film of producer Pradeep Guha, it also marked the directorial debut of Khalid Mohamed.

The profit which Guha made on Fiza would have been unthinkable five years ago. Of course, the film was hot, thanks only to Hrithik Roshan.

Whatever the reason, a net profit of about Rs 8 to 9 crore is no mean achievement.

Distributors who weren't ready to touch the film for as small a price as Rs 60 lakh prior to Hrithik becoming a superstar, suddenly clinched deals at Rs 1.75 and Rs. 2 crore.

Nothing changed -- the story was the same, the artistes were the same... only one hero changed the entire game. From a possibly loss-making enterprise, Fiza become one of the most profitable ventures in recent times.

However, this is not to be confused with what is happening to its distributors. Those who paid crazy prices for the film stand to lose or, at best, just about break even. Only the Bombay distributor stands to reap maximum benefit because the film is a hit in parts of the territorty.

HAR Dil Jo Pyaar Karega is yet another film that brought in plenty of moolah for its producer, while not yielding too much profit for its various distributors.

The film had a fresh, exciting starcast. It had excellent songs, which went on to became very popular. Producer Sajid Nadiadwala managed to sell it at a fancy price.

Since it was a Salman-starrer, the overseas rights also fetched a great price. So despite the fact that it was a very mediocre film, Sajid made in Har Dil... what he never made in any of his previous production ventures. Perhaps not even what he made in all his previous ventures together!

Once again, overseas, audio and satellite rights did the magic.

RUMOUR, in fact, has it that a top producer-director has been offered Rs 35 crores for the overseas, audio and satellite rights for his film, which we shall not name for now.

On a very conservative estimate, this film when it is ready, would have buyers falling over each other to acquire its rights at a price of Rs 4 crore per territory in India.

Even before its shooting has commenced, it's all-India rights have been fixed -- although the price is yet to be finalised.

Assuming it is Rs 4 crore, it would mean an additional Rs 20 crore to 22 crore from Indian territorial rights alone.

Even if the maker were to spend money lavishly, he would be able to complete his film for a maximum of Rs 18 crore. Which means a net profit of Rs 37 to 40 crore.

All this from just one film!