Overseas Film Distribution Rights Take A Dip

The going rate for overseas film rights has taken a massive beating if the recent trends are anything to go by. While no single reason could be attributed to the slide, the general view of industry experts is that prices were too overstretched to sustain.

According to industry experts, overseas rights of blockbuster movies were very often sold for amounts upwards of Rs 5 crore, and films such as Yaadein and Gadar were able to command rates over Rs 10 crore. But, with the weak sentiment prevailing, an amount of Rs 5 crore almost seems like the maximum price realisable these days.

 

Taran Adarsh, editor, Trade Guide, said: "Earlier, films were being sold for astronomical rates and they had touched a peak. The bust in rates was therefore inevitable. The post-September 11 events in the US compounded the problem."

"The greed of producers in pricing the rights to be in a position to recover the cost of production from overseas distribution rights' sales and sale of music rights were the main contributing factors," he added.

One reason could be that many projects, even those such as Yaadein and Lagaan, which were considered relatively safe, were found to be grossly over-rated, with earnings failing to match expectations. The debacles of big-budget films such as Pyar Ishq Aur Mohabbat, Aks, Yaadein, Nayak and Lajja have made distributors and exhibitors wary.

Another factor is the realisation by distributors that promotional expenses for international marketing are very high. Very often, the cost of overseas marketing could be as high as the cost of acquisition of the rights itself, say analysts.

Overseas rights had earlier been a boon for producers. Income from sales of these rights in many cases made up for the deficit from the sale of rights in Indian territories. Now, this buffer seems to have shrunk. A good number of buyers who had boosted the market have withdrawn from the scene.

Similarly, the overseas distributors are wary of buying the rights of big budget movies as, more often than not, pirates release fake VCDs of the latest films. This makes it difficult for the distributors to recover their money.

The popularity of DVDs of Hindi films is also being seen as a big threat to box-office collections, which is once again making distributors careful on the price they pay for acquisition of the rights.

One film which had made distributors scramble for overseas rights was the 1994 blockbuster Hum Aapke Hain Kaun, with overseas distributors beginning a mad scramble for the top Hindi banners.

Analysts now are of the opinion that a saturation point has been reached as far as the business of Hindi films overseas is concerned.