The bubble has burst. A few years ago, Tamil cinema’s most lucrative revenue stream was the ‘satellite rights’ of a film — the rights sold to a television channel allowing them the permission to screen it. Today, the market has crashed. Most Tamil channels have stopped buying movies.
According to P. L. Thenappan, vice-president of the Tamil Nadu Film Producers’ Council (TNFPC), “The satellite television rights of 150-odd big and small films released in the last two years are yet to be sold. And another 50, which are getting ready for release, have no takers. TV channels, in the last few months, have been wary of new film acquisitions. Digital film production has dealt a major blow to the satellite market.”
Before digital cinema, only 40 to 50 films would come up for satellite sales. In fact, negotiations are still on for the satellite rights of last month’s releases such as 36 Vayadhinile , Purampokku Engira Podhuvudamai and India Pakistan. The availability of digital technology at a cheaper rate has led to tacky films, which fare poorly when compared to TV serials that have better production values. Channels complain that the technical quality of films has come down after they switched to digital. Most films with newcomers or little-known artistes had poor TRPs, and could not attract the youth or the female viewers. The production boom in Tamil cinema, where more than 200 films are released every year, has also created a glut in the market.
It is only stars like Rajinikanth, Kamal Haasan, Vijay, Ajith and Suriya who get good TRPs and repeat value. Films like Enthiran, Sivaji, Panchathantiram, Kanchana, Ghilli, Singham and Mankatha are evergreen hits on television and fare better than newer acquisitions.
The satellite boom started in early 2000, and at one time, a producer could recover up to 75 per cent of a film’s budget by selling its television rights. Till 2011, channels used to snap up the rights for big-star films as soon as they were announced. There were producers who paid signing amounts to big heroes after getting the advance amount for satellite rights. But in the last four years, prices hit the roof and return on investment was almost nil. Most channels paid fancy prices for satellite rights, without realising the reach or market potential for films.
Meanwhile, in the highly competitive Bollywood market, satellite rights prices have soared with the entry of cash-rich new channels. Big-hero films like Chennai Express, Kick, and PK were sold for anywhere between Rs. 50 crore and Rs. 75 crore. Soon a crash took place. Bollywood analysts say it was a natural correction process as prices paid were not commercially viable and could never be recovered. Hindi channels also made a shift from overpriced, star-studded films to movie-award shows, which proved a viable alternative.
Down south, award-night shows — packaged as three-hour entertainment capsules for television audiences — have become a rage. In the last three years, these programmes have become hot properties.
Sun TV’s Sun Kudumbam Awards is 2015’s biggest TRP earner (among award-night programmes), while Vijay TV Awards also got decent ratings. Today an award-night programme on a channel gets better ratings than a “ Putham Puthu Padam ”. The award night’s production works out to 25 to 35 per cent of the cost of a big-ticket movie deal, and the return on investment occurs faster, after two or three airings.
As movie TRPs dropped, market leader Sun TV stopped its Saturday prime-time movie slot in the evening and replaced it with weekday serials. This has clicked big time with viewers and advertisers, with ratings being higher than they were for the Saturday movie.
Television channels have also realised that movies are losing viewers as they have already been viewed in theatres, on home video, downloaded through torrent sites, and above all, seen on local cable networks. A television marketing agency chief pointed out, “Outside of Chennai, in the B and C markets, all new films are illegally shown on local cable channels. The authorities can do little about this, as most local cable networks are owned by influential people. So by the time a film premieres on TV, there has already been considerable viewership erosion.”
Moreover, the Government of India has strictly implemented the Telecom Regulatory Authority of India (TRAI) policy of airing 12 minutes of advertisement per hour on TV channels. Earlier, on many Tamil channels, the content to advertisement ratio was almost 50:50, especially if a blockbuster film was being premiered.
TRAI put a cap on advertising time and declared that six minutes of ads per hour had to be channel promos of their own programmes. Ad rates could not be raised as some of the movies had very poor ratings.
Tamil film producers are caught in a bind. Most producers depend on satellite-rights payments to clear their debts and release the film. At the time of production, many producers used to pledge their satellite rights with the financier. Now with channels refusing to buy, the market has collapsed and traditional film producers have stopped production.
TV channels today buy only big-hero films at fancy prices, more for prestige and the festival day ‘blockbuster slot’.
Tamil cinema has to get its act together to make films on a budget and tap new avenues like digital streaming three days after release and releasing domestic DVDs.
A lot of restructuring will take place in Kollywood in the coming days.
