“We like the script and we are doing it*” – People with money
For a film maker, the above sentence is nothing short of an orgasm.
But wait, what’s that ugly asterisk sign has to say?
Oh never mind, it can’t be that bad. After all, they like the script.
Now, just for formality, let’s look at what it says:
*”We are really excited about it and we really want to do it.
And we totally agree that it needs xyz crores to do it right. But looking at the market conditions and the fact that no BIG STAR would do this and the fact that you are getting a new director on board, add to that, the lack of commercial marketability in absence of a BIG STAR and the fact that it’s an ‘art house’ sort of a film and we again go back to the fact that there is no BIG STAR, we can spare xyz crores ÷ 10 as the final amount (Including service tax, VAT, CST, import duty, octroi, excise, stamp duty, gift tax, inheritance tax, road tax, luxury tax, carbon tax, window tax, toll tax, soda tax, sin tax, ganpati / navratra donation and all other taxes).
Release? What release? Oh yea, theatrical release. We will get back to you on that.
Oh and we will keep the prequel / sequel rights. And the worldwide distribution rights. And we will charge an interest of 24% per annum. And you have to do away with your fees, and the Directors fees. Since we are giving him / her the chance to direct, shouldn’t he / she be paying us, instead? Just kidding, what are we? Financial Savages?
And you have to get your accounts audited before we release the final payment. And we need a ‘U’ certificate from the censor….and we will keep you updated of the additional conditions that we may impose without your concurrence.
Great, let’s do this, people. Even though there is no BIG STAR associated, we are so damn excited. Why wouldn’t we be?”
Look at the brighter side, they are so ‘excited’. Things will eventually fall in place, right?
Yeah, right!!
“Budget nahi hai. Next project mein le lena” is a ‘get out
of jail’ line for every production person.
But does that ‘next project’ ever come? For a few it does. And the rest of them have to go through the same grind again and again and again.
But is the situation really bad? How do people from the industry are often seen driving expensive cars, partying at exotic locations and living in posh areas?
The answer is a bit complicated. The faces we seen on televisions and social media, spending all that money, are just a small fraction of this industry. Whatever the situation may be, there will always be money for such faces. But let’s not get into who is being paid how much or why he / she is being paid that much.
Where does all the money comes from? And where does it all go?
Well, let’s begin…
1 – Studios: Studios are the ones with a fat wallet and an ever fatter appetite for keeping their wallets fat. They are here to make money. And they will make money, eventually.
A lot has changed since the so called studio culture became an integral part of the industry.
Studios have been investing into content that isn’t much of a ‘profitable venture’ for the conventional financiers. It is because of findings from studios that the industry has seen a significant improvement in the scale of film production. However, convincing them to green light a project is not an easy task. I mean, sure you would have a kick ass story line but you need more. A lot more for them to sign cheques for you.
To begin with, you need a known star cast who has agreed to be a part of your film. It’s tricky because a known star will entertain those who already have a studio backing for their film. Now that’s a deadlock, isn’t it?
After that you need to convince them about the marketability of the film. This is quite a logical expectation from anyone putting in their money into your vision.
So, in addition to being a film maker, you also need to be a marketing genius.
And then comes the budget. You will be asked to cut down on every possible portion which according to them in ‘avoidable’. At times, production houses end up working on a cost to cost basis with an expectation of earning from their share of the profit share, if any.
A share in the overflow is often a mythical number for many.
Just to explain, a studio will put in funds for the production of a film. After that comes the Prints and Advertising (P&A) cost which at times can even exceed the production budget (Really???).
Add to this, a notional rate of interest which can range anywhere from 18% to 24%. These three costs will add up to the total cost of production. But hey, one can always recover this, right? Wrong.
Once a movie is released, the first share goes to the government in the form of entertainment tax. The exhibitors / theatre owners will deduct their margin before giving away the balance to the distributor.
The distributor will deduct a ‘Distributors Margin’ which is normally 15%. After that the financier / distributor will recover their P&A cost, interest cost and production cost from the revenue through theatres, satellite (TV), music & all other rights. Any profits available after all such deductions will be shared equally between the studios and the production houses.
Too much numbers for one’s liking, isn’t it?
The most damaging thing for the studios and films they finance have been the presence of incompetent people sitting at important positions. For eg: A marketing guy selling cold drinks may be excellent when it comes to his / her line of work. However, his / her performance cannot be taken into consideration while putting up such a person at a level in a studio where decisions regarding a film are to be made. Similarly, the fact that you are the son / daughter of an influential personality from the industry doesn’t give you the birth right to come and sit at an equally influential position in a studio.
And this doesn’t stop here. At times you will be expected to pass on a ‘backend’ amount in lieu of getting your project sanctioned. Not that I personally know of someone who has asked for such an amount or who has paid such an amount but still, once in a while, birds do chirp *wink*.
In the real world, you have to pull off a lot of favours and use a lot of influence to even get a face to face with such people.
Often makes us wonder, are we in the wrong line of business?
And the results are there for everyone to see. With studios either shutting down or cutting down on their projects, it’s quite apparent that it is going to be a tough phase for the industry. The bosses sitting abroad have tightened the noose on the kind of projects that are being sanctioned and this is the time when content will take a back seat and they will go all out to make money.
But does that ‘next project’ ever come? For a few it does. And the rest of them have to go through the same grind again and again and again.
But is the situation really bad? How do people from the industry are often seen driving expensive cars, partying at exotic locations and living in posh areas?
The answer is a bit complicated. The faces we seen on televisions and social media, spending all that money, are just a small fraction of this industry. Whatever the situation may be, there will always be money for such faces. But let’s not get into who is being paid how much or why he / she is being paid that much.
Where does all the money comes from? And where does it all go?
Well, let’s begin…
1 – Studios: Studios are the ones with a fat wallet and an ever fatter appetite for keeping their wallets fat. They are here to make money. And they will make money, eventually.
A lot has changed since the so called studio culture became an integral part of the industry.
Studios have been investing into content that isn’t much of a ‘profitable venture’ for the conventional financiers. It is because of findings from studios that the industry has seen a significant improvement in the scale of film production. However, convincing them to green light a project is not an easy task. I mean, sure you would have a kick ass story line but you need more. A lot more for them to sign cheques for you.
To begin with, you need a known star cast who has agreed to be a part of your film. It’s tricky because a known star will entertain those who already have a studio backing for their film. Now that’s a deadlock, isn’t it?
After that you need to convince them about the marketability of the film. This is quite a logical expectation from anyone putting in their money into your vision.
So, in addition to being a film maker, you also need to be a marketing genius.
And then comes the budget. You will be asked to cut down on every possible portion which according to them in ‘avoidable’. At times, production houses end up working on a cost to cost basis with an expectation of earning from their share of the profit share, if any.
A share in the overflow is often a mythical number for many.
Just to explain, a studio will put in funds for the production of a film. After that comes the Prints and Advertising (P&A) cost which at times can even exceed the production budget (Really???).
Add to this, a notional rate of interest which can range anywhere from 18% to 24%. These three costs will add up to the total cost of production. But hey, one can always recover this, right? Wrong.
Once a movie is released, the first share goes to the government in the form of entertainment tax. The exhibitors / theatre owners will deduct their margin before giving away the balance to the distributor.
The distributor will deduct a ‘Distributors Margin’ which is normally 15%. After that the financier / distributor will recover their P&A cost, interest cost and production cost from the revenue through theatres, satellite (TV), music & all other rights. Any profits available after all such deductions will be shared equally between the studios and the production houses.
Too much numbers for one’s liking, isn’t it?
The most damaging thing for the studios and films they finance have been the presence of incompetent people sitting at important positions. For eg: A marketing guy selling cold drinks may be excellent when it comes to his / her line of work. However, his / her performance cannot be taken into consideration while putting up such a person at a level in a studio where decisions regarding a film are to be made. Similarly, the fact that you are the son / daughter of an influential personality from the industry doesn’t give you the birth right to come and sit at an equally influential position in a studio.
And this doesn’t stop here. At times you will be expected to pass on a ‘backend’ amount in lieu of getting your project sanctioned. Not that I personally know of someone who has asked for such an amount or who has paid such an amount but still, once in a while, birds do chirp *wink*.
In the real world, you have to pull off a lot of favours and use a lot of influence to even get a face to face with such people.
Often makes us wonder, are we in the wrong line of business?
And the results are there for everyone to see. With studios either shutting down or cutting down on their projects, it’s quite apparent that it is going to be a tough phase for the industry. The bosses sitting abroad have tightened the noose on the kind of projects that are being sanctioned and this is the time when content will take a back seat and they will go all out to make money.
2 – Individual Financiers:
These were the people responsible for keeping the industry alive before the
studios decided to venture in. They might not have the kind of funds as
compared to the big studios but they are very much relevant even today. A
larger portion of regional films are still depended on such financiers for their
projects. But just like the studios, all they eventually care about is the
amount of money that a film can make.
3 – Crowd Funding:
This is a very interesting concept that caters to a certain kind of films. As
the name suggests, it’s a group of individuals who will pool their funds to
produce a film. These are the individuals who believe in the content and are
willing to come together and support a film.
You cannot expect to raise huge sums of money through crowd funding and more often than not, you will have to approach a distributor when it comes to the P&A spending. There have been a few projects that have successfully used this mode to fund their requirements and it’s quite apparent that the audience would have never been able to see some amazing work had it not been for these people risking their own money. With the big players now willing to fund only in mega projects with mega starts, this is a channel that will gain popularity in the times to come.
4 – International collaborations: This too is a concept that will soon start opening up avenues to upcoming as well as established film makers in the industry. However, approaching financiers from abroad is not an easy task. Also, convincing them to invest in an Indian concept is equally tricky. These are the people who will take up projects with an international appeal. Such arrangements can often be time consuming and complex but you can rely on them if your film has a scope for a much larger audience.
You cannot expect to raise huge sums of money through crowd funding and more often than not, you will have to approach a distributor when it comes to the P&A spending. There have been a few projects that have successfully used this mode to fund their requirements and it’s quite apparent that the audience would have never been able to see some amazing work had it not been for these people risking their own money. With the big players now willing to fund only in mega projects with mega starts, this is a channel that will gain popularity in the times to come.
4 – International collaborations: This too is a concept that will soon start opening up avenues to upcoming as well as established film makers in the industry. However, approaching financiers from abroad is not an easy task. Also, convincing them to invest in an Indian concept is equally tricky. These are the people who will take up projects with an international appeal. Such arrangements can often be time consuming and complex but you can rely on them if your film has a scope for a much larger audience.
5 – Government funds:
Yes, the government does have a ministry to censor fund ‘new age’ film
makers in the country. Add to this the subsidies for shooting in India and
treaties with shooting friendly nation and we have a pretty solid backing from
the government. What a time to be alive as a film maker, isn’t it?
However, with great power comes great responsibility.
Result? Lot of rules and regulations that one must comply to.
So, if you have a content that in any way brings ‘harm’ to Indian ‘culture and values’ you can say goodbye to government funds. With time, the ministry has been trying its best to promote films through funds and film festivals, both in India and abroad. However, political influence and red taping often makes it unreachable for new comers and small film makers.
One must accept the fact that it is not easy to make a film in India.
It’s even more difficult to release one. People will sell what the audiences buys.
And the audience has been buying a lot of bullshit recently.
So, the next time you decide to spend money on a film, make it count.
However, with great power comes great responsibility.
Result? Lot of rules and regulations that one must comply to.
So, if you have a content that in any way brings ‘harm’ to Indian ‘culture and values’ you can say goodbye to government funds. With time, the ministry has been trying its best to promote films through funds and film festivals, both in India and abroad. However, political influence and red taping often makes it unreachable for new comers and small film makers.
One must accept the fact that it is not easy to make a film in India.
It’s even more difficult to release one. People will sell what the audiences buys.
And the audience has been buying a lot of bullshit recently.
So, the next time you decide to spend money on a film, make it count.