Gone are the days when broadcasters queued up to acquire satellite rights of Hindi films even before their release.
Today, a film is acquired based on its box-office performance and even then, it takes five to six months for it to make it to the small screen.
For instance, despite a release in December 2014, it took actor Aamir Khan’s hugely popular film PK almost six months to make it to television. The film’s satellite rights were acquired by Sony for Rs 85 crore. “The era of pre-buying movies has come to an end, unless a broadcaster had inked a bulk deal for movies with a particular production company a few years back,” says Neeraj Vyas, senior executive vice president and business head, Max and Max2, the Hindi movie channels from the house of Sony Entertainment Television India (SET).
Broadcasters have experimented with several models when it comes to acquiring movies. Earlier, broadcasters would buy the complete movie rights for a period of one-two years. This allowed them to air the movie two to three times a year. Then came a phase when broadcasters went for short deals for ‘first premiere’ and ‘second telecast’, unless it became too difficult for everyone to keep a track of the total number of such signed deals. In between, they also opted for bulk deals with studios. “This was also the reason why acquisition costs hit the roof,” says Smita Jha, leader, media and entertainment, PwC.
But after those heady days which saw a sharp rise in the price of satellite rights of Hindi movies, the dust is finally settling down with a 30% decline in rates. “In the last one year, broadcasters have realised that the frenzy to grab a movie first had resulted in a price inflation, to the point that after a while it became almost difficult to buy one,” says Sameer Nair, Group CEO, Balaji Telefilms.
Currently the cost of acquisition of a medium budget Hindi movie is Rs 30-40 crore, while a blockbuster costs Rs 70-80 crore, that too after much negotiation between both the parties.
A different route
So why this change in tack? Even as broadcasters were ready to pay a high amount, return-on-investment always remained a challenge. According to industry estimates, a 10-second ad spot costs Rs 1,500-2,000 on channels such as Sony Max and Zee Cinema. The same advertising inventory comes at a cheaper price, Rs 500-1,000, for second-rung Hindi movie channels such as Max2. It is only in the case of Hindi general entertainment channels (GECs) that broadcasters are able to charge Rs 80,000 – 1,10,000 for a 10- second spot. This is also the reason why broadcasters first telecast a blockbuster movie on their Hindi GECs followed by movie channels.
“Broadcasters buy the first time airing right for the GEC with the mindset of keeping the viewership intact during the weekend,” says Rajni Menon, vice-president, Carat India. A good three-hour cinema laced with advertising guarantees minimum five hours viewership, which otherwise is difficult to manage during weekends. The movie is then aired on other channels of the network.
Consider Colors, which decided to go slow on movie buying three years back, as the parent broadcaster Viacom18 had only one channel.
“It was financially not viable to buy movies at unrealistic prices. Also, the novelty of premiering a movie does not give you the same ROI as it did four-five years ago. Unless one has multiple channels to show the same movie and amortise the cost, it becomes difficult to justify the investment,” explains Raj Nayak, CEO, Colors. So from Star Gold to Zee Classic to Max2 which air classics of the ’60s to ’90s to Zee Action and Movies OK, the Hindi movie genre today boasts of an array of channels. The launch of niche channels may further allow broadcasters to put library content to good use.
Now consider the fact that Hindi movie viewership dipped from 15.1% in 2013 to 13.6% in 2014 in the overall viewership pie (source: Ficci-KPMG 2015 report). That is why broadcasters resort to other mechanisms such as airing South Indian and English movies dubbed in Hindi. “Through these movies we get a chance to target a wider spectrum of audiences,” says Ruchir Tiwari, business head, Hindi movie channels – (Zee Cinema, & Pictures, Zee Classic), ZEEL. As for advertisers, multiple movie channels in a network offer tremendous opportunities. For Ajay Kakar, chief marketing officer, financial services, Aditya Birla Group, the variety in content allows an advertiser to invest only in the kind of content that stands true to its brand proposition.