Corporates eye pie in the leading film market

K.V. Kurmanath

Hyderabad, Nov. 5 Athithi, the Mahesh Babu-starrer marked a new era in the Telugu film industry, which is among the top three markets in the country and is witnessing a foray of a major corporate company directly entering into production.

UTV Motion Pictures, which invested about Rs 20 crore on the film, also tied up with Mr Mahesh Babu for one more movie immediately.

New generation

This is not going to be a one-off instance of a corporate investing in films. Many new generation directors such as Mr Rajamowli and Mr V.N. Aditya are being approached by some corporate companies for tie-ups to make films for them.

A senior film writer has reportedly roped in young directors and film houses to offer a package of 10 films to corporates. “Besides helping the industry infuse much-needed investments, it (the corporate foray) would ensure a dependable job work to the technicians here,” sources close to the development told Business Line.

The industry expects that the advent of corporate financing would lead to professionalism and order. “Corporates don’t invest for the sake of investment. They invest only after doing due diligence. They bring in modern production and management techniques, while expanding the scope of the market,” Mr Chaitanya, a member of AP Film Writers’ Association, felt.

Corporates interests

The corporates also bring in a new dimension to the marketing aspect of films. UTV-Thums Up had used Athithi’s Mahesh Babu for promoting both the film and the beverage.

The corporate interest in the Telugu film industry is not without any reason. Though the Hindi industry leads in terms of budgets, the Telugu industry stands first in the number of films it produced. In 2006, it produced 245 films, followed by Hindi (223) and Tamil (162).

The FICCI-PricewaterhouseCoopers (PwC) study on the Indian film entertainment and media industry pegged the industry size at Rs 11,200 crore by 2008 as against the estimates of Rs 8,450 crore for 2006.

Eyeing a pie in the huge opportunity, several entertainment companies, including Adlabs of Anil-Dhirubai Ambani group, have begun moves to put their monies in the industry.

Revenues

It’s not just the box-office revenues that are enticing the corporates. Interestingly, revenues from other than box-office such as overseas opportunities, home video and audio are growing.

The FICCI-PwC study estimates that contribution from domestic box-office revenues would come down to 68 per cent (in total collections) by 2011 as against 78 per cent in 2005. On other hand, home video segment, which chipped in just 6 per cent in 2005, is expected to contribute 14 per cent.

“The producers should look beyond the traditional stream of revenues (box office revenues). There other fronts opening up,” Mr Tammareddy Bharadwaja, President of Producers’ Council in AP Film Chamber of Commerce, points out.

They should realise more from audio rights, with more and more FM channels coming up, using film songs as major feed.

Organised exhibition

There is yet another industry segment that is attracting corporate attention. At least three major players, Pyramid Saimira, Adlabs and the home-grown Suresh Productions, have entered the segment, developing their own network of cinemas.

(This article was published in the Business Line print edition dated November 6, 2007)
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