Trade Winds Movies

‘Dhilluku Dhuddu 2’ to ‘LKG’: Is profit-sharing the way to go?

RJ Balaji and Priya Anand in a scene from ‘LKG’

RJ Balaji and Priya Anand in a scene from ‘LKG’   | Photo Credit: Special Arrangement

A look at LKG’s successful business model and its feasibility at the Kollywood box-office

By now, everyone knows that both Petta and Viswasam had an excellent opening at the box-office. But do you know which film has grossed the third-biggest opening of the year so far? It is LKG, radio jockey Balaji’s first film as hero. The film, directed by Prabhu and produced by Ishari Ganesh, has grossed an impressive ₹8.80 crore in its opening weekend from theatres in Tamil Nadu.

Sakthivelan B of Sakthi Film Factory, who distributed the film in Tamil Nadu, says, “LKG will make profits for us and overflow for the producers in its first week itself, which is a rare happening.” The trade buzz is that Sakthivelan had purchased the Tamil Nadu rights of the film for ₹3.5 crore on a minumum guarantee basis and it did a distributor share of approximately ₹4.25 crore in its first three days. The film has the potential to garner a lifetime distributor share between ₹8 to ₹10 crore.

As per sources, LKG was made on a shoe-string budget of ₹3.5 crore, with RJ Balaji not claiming his salary as it was his launch film as hero and scriptwriter. Now that the film is a super hit, the producers are likely to give him a share of the profits. Sakthivelan says, “Balaji did not take a salary before the release as he wanted everybody connected with the film to make profits. This is a perfect business model for other upcoming and middle-level heroes to emulate. In future, if heroes work on a token amount and share profits after release, a lot of average films at the box-office may become profitable.”

Understandably, RJ Balaji is a happy man. He says that in the last two years, he stopped signing films that cast him as a “supporting comedy actor, who mainly plays the hero’s friend”. His roadmap ahead included playing the hero, without incurring losses to his producer or distributor. “Last year, my Tamil comedy show, Ice House to White House, was staged in eight cities in the US. All the shows were pre-sold and were profitable for my sponsors and the people who hosted it. I was able to make a profit as well. This formula opened my eyes and I applied it for the production of LKG as well. Even before its release, the film made a table profit from sale of satellite, digital, overseas and in film advertisements.”

Now the big question being asked in Kollywood is this: will other middle-level starstake to profit sharing too? Says a producer, whose recent film flopped at the box office, “RJ Balaji is a brave man and a risk taker... but other heroes only want to make money and a hit once in a while to keep their career going. It’s well-known that the superstars of the industry get paid 50 to 60% of the budget. But a dozen other saleable heroes, despite limited box-office reach, want to charge almost 50% of the budget as salary. If a few of them decide on profit sharing, half the financial issues plaguing the industry will be solved.”

Recently, Santhanam’s horror comedy caper Dhilluku Dhuddu 2 (the fourth profitable film out of the 28 releases this year so far) became his biggest hit only because he sold the Tamil Nadu rights at a reasonable price. A spokesperson of the newly-formed South Indian Film Financiers Association says, “Today, in Bollywood, and to a certain extent in Telugu cinema, heroes take only a token amount as salary. The rest of the money comes through profit-sharing basis. We want this to be implemented in Kollywood too, as LKG is a clear indicator that films made on a budget with decent content works if the hero is willing to work on a profit-sharing basis.”

However, sceptics within the industry feel that this idea cannot be easily implemented. A lot of first-time producers enter the industry and are willing to go to any length to pamper to the whims of the stars. And, the stars who cannot get what they feel is their market rate turn producers themselves, but still refuse profit-sharing with others. The biggest irony is that LKG’s new concept comes at the same time when films are launched by debutant producers who go to any lengths to rope in their favourite stars.

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Printable version | Feb 17, 2020 5:42:54 PM | https://www.thehindu.com/entertainment/movies/what-does-lkg-success-say/article26386038.ece

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