Management grads star in Southside script abroad

When Sharath Maran completed his CA studies, he aspired to work for a big accountancy firm. Instead, he was signed up by a Tamil production house to head a team that will focus on selling not just Tamil, but all South Indian movies in the US. Same for Gaurav Rana, who completed his engineering in the US from the University of Madison at Ann Arbor, and now is earning a decent salary getting better deals for South Indian producers in the US and UK.

When Kamal Haasan was in the US last year, doing a songs medley of dance routines, it might have looked funny to a someone on a Hollywood diet. But the audience was full of trendy Indian American teenagers, stamping their high heels in time to every number and greeting Haasan with rapt, deafening applause. Such is the appeal, and yet, the revenues from the US and UK are hardly anything in comparison.
While movie fans eagerly await the release of Avatar, the southern film industry is leaving no stones unturned to be a powerful global force, and certainly more powerful than Bollywood. This, despite some of them facing a tougher year.

The Tamil movie industry, boasting of biggies like Rajnikant, Kamal Hassan and Surya, is growing at a rate of 15% each year, according to Vijay Singh, CEO of Fox Star Studios India. The company recently signed a contract with Ghajni director A Murugadoss. “This partnership will bring top class expertise in movie making to southern cinema,” Murugadoss said.

This is just one way of getting the people onboard who can make movies of international class, as exemplified by 2012, and the likes. Right now, its all about different camera angles and fast-panning shots which does not sell overseas. “The right kind is to understand what the audience there wants, and to have a solid marketing team,” says Soundarya Rajnikant, MD of Orcher Studios, who signed a deal with Warner Bros last year.

For this, the southern producers are either utilizing the expertise they are getting by tie ups with US majors like Warner Bros and Fox, or hiring people in important markets. For Maran, it was just like working for a start-up. “Just like a new company offers opportunities for fast growth, this is new for the US. You have to create the market, have to strike deals with distributors, create new market strategies, its fun!” he says. For Rana, this was different — working with movies fulfils one of his hobbies and allows him to hone his computational skills in designing new distribution models. For these people, working in the movie industry has been rewarding and challenging.

For Kamal Haasan, the important thing is to have the same liberties with regional cinemas as with Bollywood. “There is need for an organization that can sell our movies, that can give good feedback to what sells,” he says, and adds he is working on it. But first, the Censor Board should have equal standards, he says. For example, expletives normally used on the street are permissible in Hindi movies but not in regional cinema. “Such regional biases means we are devoid of a bigger market, and hence lower revenues not just here but also abroad,” he points out.

The South Indian film industry, estimated to be around Rs 1,730 crore can grow its overseas growth to 8-10 per cent from the present 5% which would help the industry penetrate under-tapped markets abroad, says Farokh Balsara, partner at Ernst & Young. A study done by the firm points out that out of the aggregate market size of Rs 1,730 crore, the Telugu and Tamil movies contribute around Rs 770 crore each, the Malayalam segment Rs 140 crore and the Kannada segment Rs 50 crore.

So there is clearly scope for growth in Kannada, says hit actor Chetan, who has seen a series of hits this year. Agrees prominent producer S Gowda, “Some of us have hired MBAs to sell the movies, and also hired research agencies to check what the NRI Kannada viewer wants.” Industry estimates say that a professional sales team of around 10 each will be hired for the US and UK markets, who will sell not all the southern movies according to the demography of the area. “For example, if more Tamils live in a area in Boston, we will sell accordingly,” says Gowda.

This hiring has happened across Telugu, Kannada and Tamil movie industries. “We need to exploit multiple media for publicity to have larger revenues,” says Allu Sirish, secretary of the Telugu Film Producers Council. He talks of a clear agreement between producers across the south, for a united front to market movies. “That kind of investment is already happening,” agrees Rajnikant. Till now, among the various revenue streams, domestic theatrical revenues is, by far, the most dominant, accounting for nearly three-fourths (around Rs 12.6 billion) of the total revenues earned. Revenues from cable and satellite television rights contribute around 17%, followed by revenues from international theatrical rights, which make for just Rs 0.9 billion or 5% of the total revenue pie according to a report by E&Y.

For Malayalam producers, a huge market is the Middle East because of the presence of a large Malayali population. But, selling to a single buyer has made the producers unable to get a higher price. “Unless there are more players to sell to, you are dealing with a monopoly.” Other revenue streams, namely, music rights, domestic home video rights, Internet and mobile rights, contribute a paltry Rs 0.8 billion or 5% of the total revenues earned, said Farokh Balsara, partner and national leader, media & entertainment practice, Ernst & Young.

As Mohanlal sips tea on the sets of an upcoming movie, the mood is sombre. The Malayalam film industry flopped miserably this year, with a dozen movies not even recovering their money. But they are going all out to sell them abroad, and be on top of the game. First step is to cut the actors’ salaries, a step easier said than done. Suresh Kumar, general secretary of the producers association, told ET that the one of the main reasons for not recovering costs was the “exorbitant rates of superstars, which makes for 60% of the total cost of a movie.” Currently, Mohanlal and Mamooty charge around Rs 30 crore per movie, an amount higher than what is charged by many Bollywood stars.

“We have decided that the cost of a single superstar film should not exceed Rs.3.50 crore,” said Kumar. He said that marketing their movies abroad is going to be done by a team of MBAs, who have been in the movie or television business. “They know what and how to sell,” he said. However an industry producer called this as wishful thinking, saying the stars will continue to charge as they do. “We just need more revenues.” With people like Maran and Rana, the production houses are now more confident.

And this is a good year to try and beat Bollywood, which lost revenues dude to a two-month strike, and the swine flu scare in metros. Ironically, most producers are against the entry of corporate houses and new producers from other industries. Unfamiliar with the Tamil film industry’s cost structure and revenue potential, these new players offered excessive remuneration to the actors and technical talent and increased the cost structure considerably for all the producers, says Tagore Madhu, a Tamil movie producer.