Nov 14, 2008

Entertainment - India;Broadcasters shy away from new Bollywood releases

Sonali Krishna

MUMBAI: The cash crunch plaguing the money market has now come to hit Bollywood. Seeing an apparent lack of value, broadcasters have stopped buying Recent movies
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television rights for movies. Sony Entertainment Television, among them, feels that the prices should fall by at least 60% for any transaction to emerge.

Studios like Yashraj, Eros and Indian Film Company (IFC) have so far not managed to sell any of their recently released films. Films such as Drona, U Me Aur Hum, Bachna Aae Haseeno, EMI, Yuvraj, Tashan, Glomaal Returns, Roadside Romeo and Heroes are yet to find takers among broadcasters.

“This has essentially happened because of the greed of the producers who were not looking at a sensible business model. There was a period when a bunch of people went over the top with their promises to investors, who were ready to pay any price. The situation now is that the buyers have vanished, but the producers still seem to be living in the past, quoting figures of Rs 15-20 crore for a single movie,” said Uday Shanker, CEO, Star India. He added that broadcasters have now realised that the recoveries at such high prices are next to impossible.

Echoing similar views, Kunal Dasgupta, CEO, Sony Entertainment Television, said: “It’s just not viable any more to buy movies at these prices. Movies prices will have to come down by a minimum of 60% for us to start looking at buying films again.”

“The satellite market has crashed and the big buyers have abstained from making any deals. Earlier, deals were signed on the terms and conditions dictated by producers. However, it is now a buyers’ market. The crash has also been triggered due to the box office failure of films,” Venkatesh Iyer, former CFO of Yashraj Films and now an independent consultant, said.

The exclusive television exhibition of films does not work any longer with the advent of the syndication model, which means that the producer seals multiple deals with different broadcasters for a limited number of airings. So, while one channel may sign on for the first three screenings, another signs for the fourth and fifth, further diluting recoveries.

Siddharth Roy Kapoor, chief executive of UTV Motion Pictures agreed that the pressure has been mounting on producers. “The satellite market has taken a beating, considering the liquidity crunch. Most broadcasters want to play the wait-and-watch game to see if the movies do well with audiences before buying satellite rights as opposed to the earlier practice of buying satellite rights of a film even before the completion its shootings.”

However, he added that he didn’t see the prices of films going down any further, considering the intense competition among broadcasters. India Films Company CEO Sandeep Bharghava refused to comment on the subject.

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