Satellite rights prices have soared!
Satellite rights acquisition prices for hindi movies have soared! Even a flop movie like Umrao Jaan which did a total business of around 8 crores at the box office might fetch 7 crores through satellite rights..
MUMBAI: The film satellite rights acquisition space has seen some exceptional twists and turns recently. While 2005 saw a unique 64 movie deal being inked between Sahara One Media and Entertainment and Star India; in the year gone by (2006) the high point was acquisition costs.
Satellite rights prices soared like never before in 2006 and the battle amongst broadcasters like Star, Zee, Sony and Sahara intensified.
Bollywood saw some big ticket film releases in 2006 like Rang De Basanti, Fanaa, Lage Raho Munnabhai, Omkara, Krrish, Phir Hera Pheri, Don and Dhoom:2 amongst others. What?s more, most of these films? satellite rights have been lapped up by broadcasters.
According to industry estimates with Businessofcinema.com, Yash Raj Films has sold the satellite rights of Fanaa, Dhoom:2 and Kabul Express to Sony for anywhere between Rs 250 ? 300 million (Rs 25 ? 30 crores) to Sony. Whereas the rights of Karan Johar?s Kabhi Alvida Na Kehna (KANK), which is also going to be in Sony?s kitty soon, is being sold at Rs 140 million (Rs 14 crores).
Apart from these, Sony also has in its kitty Golmaal (Rs 30 ? 40 million), Omkara (Rs 40 million), Jaan-E-Mann (Rs 75 ? 80 million) and other films like 36 China Town, Shaadi Se Pehle, Humko Deewana Kar Gaye, Kalyug, Tom, Dick & Harry, Ahista Ahista, Woh Lamhe, Anthony Kaun Hai?, Jai Santoshi Maa, The Killer, 15 Park Avenue, Being Cyrus, Naksha and Shaadi Karke Phas Gaya Yaar.
?We have a very good relationship with Yash Raj Films and Karan Johar?s Dharma Productions. We have most of their films in our library. Typically, we have the satellite rights to the top five films of the year, which has been our forte,? says Max business head Sneha Rajani.
Star India, on the other hand has picked up Rang De Basanti, Krrish and Don. Sources say that while Krrish has been sold for Rs 150 million (Rs 15 crores), RDB has been sold for Rs 120 million (Rs 12 crores) and Don for Rs 110 million (Rs 11 crores). Whereas Chup Chup Ke was sold for Rs 15 million (Rs 1.5 crores) to Star. That makes Krrish one of the films with the highest fetching price for satellite. ?Yes, this has probably been the highest amount paid for the satellite rights of a film, but then it all depends on what the film deserves,? says director Rakesh Roshan.
Zee TV has acquired the rights of films like Garam Masala, Phir Hera Pheri, Pyare Mohan, Aparachit, Aap Ki Khatir, Fight Club and Kyun Ki. Sources reveal that Phir Hera Pheri satellite rights were bought at Rs 50 ? 60 million (Rs 5 ? 6 crores). However, Zee Cinema business head Bharat Ranga declined to comment on the price.
Sahara One has in its kitty satellite rights of films like Onir?s Bas Ek Pal and UTV?s Khosla Ka Ghosla, which, according to sources, were bought at Rs 13 million (Rs 1.3 crores) and Rs 16 million (Rs 1.6 crores) respectively. The network also has films like Dor and Corporate, which have been produced by Sahara One Motion Pictures.
While some in the industry say that acquisition costs went up by 25 ? 30 per cent in 2006, some others believe that costs went up almost 100 per cent. For example, if the satellite rights of a film that did average business with stars like Abhishek Bachchan and Aishwarya Rai would have cost channels Rs 20 ? 25 million (Rs 2 ? 2.5 crores) in 2005, a similar film cost Rs 40 million (Rs 4 crores) in 2006.
Industry observers are of the opinion that acquisition costs have become unrealistic and unsustainable for any television channel.
Says Filmy business head Ashutosh, ?While earlier satellite rights of any blockbuster would cost between Rs 30 ? 50 million (Rs 3 ? 5 crores), today the figure has risen to Rs 80 ? 100 million (Rs 8 ? 10 crores). A commercially flop movie like Umrao Jaan has a price tag that is more than that of 2005?s biggest blockbuster.?
Sources reveal that the satellite rights price tag on J.P Dutta?s Umrao Jaan is Rs 70 million (Rs 7 crores). However, the film, which released in November 2006, hasn?t been sold to any broadcaster as yet.
While movie channels revenues went up by 15 ? 20 per cent in 2006, movie acquisition costs more than doubled. ?The acquisition costs don?t justify the channel needs. However, they justify more with the needs of the network as a whole,? adds Ashutosh.
?It?s a typical situation of demand and supply at play. Acquisition costs have gone up but I don?t think it has anything to do with the fact that 2006 has been a big year for Bollywood. There are more players in the market now and hence acquisition costs are bound to go up,? says Rajani.
Ranga adds, ?The upper ceiling of a blockbuster’s price has gone up by about 25 to 30 per cent. It happens every second year that the prices go up and this is based on theatrical performance and production cost.?
Another scenario that has arisen is that due to unrealistic prices, some big and successful films have had no takers. One of them is Lage Raho Munnabhai, the satellite rights of which are with Eros International. Sources reveal that Eros, which bought the overseas distribution rights of the film, also bought the satellite rights and is in turn looking at selling it to broadcasters. ?Eros bought the satellite rights of Lage Raho Munnabhai for Rs 140 million (Rs 14 crores) and is now quoting Rs 190 million (Rs 19 crores) to sell the same,? says the source.
?Channels are no longer fighting desperately over each and every big title. Prices have gone slightly unrealistic and hence some big and successful films had no takers for more than eight months of theatrical release,? says Ranga.
The rush to buy satellite rights has, however, slowed down in the last three to four months. Going forward, Ashutosh is of the opinion that ?Satellite rights? prices cannot go up more than they already have. What?s more, channels now have to find new ways of exploiting the same property in order to recover costs. New rights are now opening up like handheld, digital and terrestrial rights, which in turn justify the amount. But rates can?t go up purely on satellite rights.?