Kollywood distributors tighten the screw

By doing away with traditional methods of distribution, industry veterans are hopeful about streamlining the way the business is run

FOR INDEX, CHENNAI, TAMIL NADU, 14/04/2017, Actor Rajinikanth at the Inauguration of the Bharathi Rajaa International Institute of Cinema in Chennai on Friday. Photo: M. Vedhan.

Film distributors, exhibitors and financiers in Kollywood have decided to tighten the screw. Starting this May, they will not be buying or funding any film on MG (Minimum Guarantee). Instead, films will be purchased on outright or advance basis only. Small films without stars (below ₹5 crore) will be distributed only on commission basis. And after the Baahubali 2 opening day release fiasco (morning shows were cancelled as the producer did not issue KDM licences on non-payment of agreed amount by the Tamil Nadu distributor), no single buyer will be allowed to purchase Tamil Nadu theatricals wholesale. The producer has to sell the rights to individual distributors, territory-wise.

Till April 30, 2017, 57 Tamil films were released, out of which nearly 90% have been box-office duds. In many cases, producers escaped, as they had pre-sold their films on MG basis, or taken deposits which cannot be recovered. Hereafter, distributors will take most films on plain terms or commission basis, with the risk entirely on the producers. The crux of the issue between producers and distributors is over the MG amount mainly for entire Tamil Nadu. Like what happened to the Baahubali 2 distributor, who bought the film at an astronomical price, and later sold it to a third party, who could not deliver at the time of release. Seven films which released this year and claimed to be ‘hits’, have turned out to be loss-making propositions for the distributors who bought them on MG basis.

Recently, at the

Neruppu Da audio launch, Rajinikanth commented on the unrealistic business of Tamil films. He pointed out that producers resort to all sorts of gimmicks to promote and sell their film, but the distributors should not fall prey to it. “Don’t buy films at exorbitant and unreasonable prices and blame others for your losses,” he said. “A producer should understand that all parties concerned with a film’s business should profit from the venture,” was his advice to the producers.

These decisions have caused tremors in the industry, as financiers who lost heavily have virtually stopped funding new films. Many medium and big films scheduled for release in May-June have been postponed, due to a lack of buyers. The producers are going to feel the heat, as there will not be a single buyer for all territories in Tamil Nadu. In a way, it will revive the business at the grassroots level, as distributors in key areas will call the shots.

Ajith’s Vivegam , produced by veteran TG Thyagarajan of Sathya Jyothi Films, is to be marketed to individual distributors in each territory. It makes sense, as no individual can raise a huge sum of money without borrowing at high interest rates. And the risk involved at the time of release can also be avoided. RD Raja, producer of Sivakarthikeyan’s upcoming film, Velaikkaran , is also planning to market it via area-wise distributors. This has led to a situation in Kollywood where budgets are getting pruned, with MGs or fancy advances being curtailed.

The new rules may lower production, as it will not be easy for new producers to release films. But there are sceptics who believe this is temporary, and MGs will be back, as cash-rich individuals will be lured by the glitz of Kollywood.