Last Friday, Sargunam’s film Kalavani-2 came out after a lot of struggle and got released only by evening show. Previous week, same thing happened to Vijay Sethupathi’s Sindhubath, which could be released only a day later.
The biggest casualty of these delayed or postponed releases is poor interest in these films among audience, which led to most of the delayed films failing at box office. In a poll among 1,697 film buffs conducted by trade analyst LM Kaushik, on why films whose release got delayed did not attract audience, 42% stated they lost interest to watch such films, 14% stated they are unaware the film got finally released after delay and 6% did not come as they were unsure of the film in theatres and 38% stated all the above reasons for them not coming to watch these films.
There are several reasons for this financial muddle. A few are, lack of understanding among producers in budgeting their films properly; over estimating revenues based on hope and when they face with deficit against it, unable to cope up with it; commencing a project based on hope to somehow raise funds than being fully ready with the funds or borrowing funds at heavy interest; trying to avoid or reduce repayment in some way after having committed; selling unethically with clash in rights; poor execution skills to complete a project on time and within budget planned which they are unable to pay back when revenues are not commensurate with the increase in cost. In simple words, overestimating revenues and underestimating the cost while commencing a film is the primary reason. Producers must realise that there is not much interest among satellite and digital companies to buy a small and medium films unless they succeed at box office. There is no guarantee from theatrical revenues. Hence their hopes on revenue must be lower.
Big production houses are able to raise corporate funding at lower interest rate (18-21% per annum) against small and medium producers borrowing at 36-48% interest, which takes away large part of their revenues. The success of a viable project lies there. Producers must ensure that cost of borrowing funds is kept within 24% so that the overall cost is under control. Once the fund is mobilised at lower interest rate, following a disciplined execution by completing the film within the budget can take a producer to safe zone.
Producers must remember that they have to repay all their dues, borrowed in past for their previous film or for the current film and should not allow the issue to be pending till last week of a film’s release. Most lenders go to court and get a stay order only when they realise that they are being taken for granted and not settled their dues pre-release of a film. In addition, producers must plan for 20% short fall in distribution revenues against expected revenues so that even if distributors default, they can manage the situation and ensure the film’s release. Today most films made in few crores, get stuck for want of Rs 50 Lakhs repayment, which can be avoided if there is a contingency plan.
While it is art for a filmmaker, it is all about commerce/finance for producers, when it comes to a film’s release. Producers must plan well their financial requirements and be ready for worst situations to ensure their film releases as planned to avoid last minute mediation at producer council. If there is a disciplined approach to film business as it is in Bollywood and Telugu cinema, these incidents of films getting delayed can be avoided. Tamil cinema must improve its image on this aspect.
—G Dhananjayan is a film producer, distributor and Founder-Director of BOFTA Film Institute.