It’s still as confusing as ever, but a pattern is slowly emerging in India’s highly fragmented and regionalized film distribution business: Production companies are expanding into marketing, distribution and even exhibition on a countrywide basis.
Traditionally in the lucrative Hindi-language industry known as Bollywood, filmmakers have sold their movies outright to distribs, which essentially act as venture capitalists by providing production financing.
Specified amounts of cash is handed over at predetermined points, starting with the signing of the contract and ending with the delivery of a finished film. A revenue-sharing arrangement also would be set up, allowing the producer to cash in if the movie becomes a hit.
In recent years, this system has changed, with more and more distribs preferring to work on a straight commission basis.
The dwindling number of “outright buy” distributors, coupled with the growth of multiplexes, has had an unexpected effect of encouraging some producers to launch their own distribution companies.
Among some of the bigger names adopting a more Western-style approach are Adlab Films, headed by Manmohan Shetty, Yash Raj Films (Yash Chopra); UTV Motion Pictures (Ronnie Screwvala); Mukta Arts (Subhash Ghai), Sahara One Motion Pictures (Sandeep Bhargava); and Pritish Nandy Communications (Pritish Nandy).
Yash Raj Films, one of only two players to have a pan-Indian setup, distributes its homegrown — on a commission basis — as well as pics from other leading production companies. Yash Raj’s Yash Chopra says diversification into marketing and production made plain business sense.
Sahara One, meanwhile, has opted for working with a panel of directors that enables it to release and distribute a movie almost every two weeks.
“From the business point of view, we are just diversifying our risk,” says Sahara One topper Sandeep Bhargava of the approach, virtually singular in India.
UTV Motion Picture’s Ronnie Screwvala believes a great metamorphosis is under way in Bollywood. “Earlier, a dream merchant would think of an idea and start making a movie. The entire content was never well distributed, the marketing was next to nothing and the stars were rushing on and off since they were almost always overcommitted,” Screwvala says. “All that has changed. Enter the film company that produces, markets and distributes your film.”
Pritish Nandy Communications’ Pritish Nandy, too, hails the transition from individual producer-directors to complete film companies. “Time was when a filmmaker would beg and borrow to make a film but then not know what to do with it,” says Nandy. Now, companies have emerged that know how to make, position and market a film.
Meanwhile, some companies are doing good business distributing Bollywood productions to the huge Indian expat community abroad.
Companies such as Eros Entertainment and Venus Films acquire distribution rights of Hindi movies for theatrical and homevideo platforms and then, after cornering the larger markets, sell the rights for other territories to smaller regional players, says Sunil Kheterpal, of Yes Bank, in his 2005 report “Bollywood, Emerging Business Trends and Growth Drivers.”
The most significant trend in the distribution business, he predicts, will be witnessed in the overseas market. “Producers and distributors will (split) overseas distribution rights either on the basis of geographical territories or on the basis of distribution platforms (theatrical, homevideo, television) in order to exploit overseas markets more effectively.”