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Lights, Camera, Finance: Money woes mar film industry reopening

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As film sets dust off their clapperboards and disrupted productions get back on track, the industry is gearing up for changes brought about by Covid-time economics.

In 2019, the industry as a whole saw a revenue of 11,500 crore in box office receipts alone but this year, at least 100 big-ticket productions have been put on hold, in addition to several others that have not commenced work. 

The immediate challenge comes from the murky world of film financing, where the big sharks offer no concessions: while producers are allowed extra time to repay their loans, the interest payments have to be made in full, pandemic or otherwise. 

With little support from formal financial institutions, most movie producers are forced to depend on these film financiers — glorified money lenders — to get their movie productions off the ground. And film financing is crucial for the entire industry to run and without money, there is no cinema.

READ: In Bollywood, this is an era of corporate production houses

The other challenge is the altered landscape of the entertainment industry. Do the silver screen and its larger-than-life stars still hold sway over an audience spoilt for choice with the content on OTT platforms?

Several movies have already had direct-to-digital releases, and the traditional distribution network itself might change to accommodate the streaming platforms, who are increasingly producing movies themselves.

READ: Fear of debt and the politics of lending in Tamil film industry

Caught in these cross currents are lakhs of people working behind-the-scenes in the film industry, from spot-boys, set-designers and junior artistes, to ushers and ticket collectors at the cinema theatres. In the midst of all these challenges and struggles, after suffering a loss to the tune of Rs 4,000 crore together in the past six months, Bollywood and south Indian cinema producing hubs are bracing for a new beginning.

Blockbuster films on OTT

The Kannada film industry is likely to see two major changes in the coming months: more producers making a beeline to release their films on OTT, and slashing of ticket rates once theatres reopen.

Karnataka’s topmost producers Jayanna and Rockline Venkatesh say they are ready to release their big-budget films on OTT if they get a good deal.

READ: Gulf, gold smuggling and slush funding mark Kerala’s film industry

“Theatres may be allowed to open on October 1, but most single-screen theatres in the state have shut down, owing to huge maintenance costs and zero earnings,” says Jayanna.

Rockline Venkatesh, producer and distributor, couldn’t agree more. “OTT platforms will definitely pick up the films of the big stars because they know the value of such projects and the viewership they attract. The producers can no longer hold on to the sentiment of waiting to release big-budget movies only in the theatres,” he says.  

Most producers in Karnataka borrow from private financiers because procuring loans from banks is a long-drawn, uncertain process. The private lenders take advantage and charge between 2 and 8 per cent a month for ready cash.

READ: Debutant producers most vulnerable in the Telugu film industry

Jayanna says he had borrowed from a private financier for the Shivarajkumar-starrer ‘Bhajarangi 2.’

“Many private financiers have given us time. Under normal circumstances, producers are forced to clear the loan before the release of the film,” he says. 

If a loan is not cleared before the release of a film, lenders stop its release, using their negative rights, says Jayanna.

‘No institutional funding’

If the government treats the film industry as a small scale industry and allows banks to lend accordingly, the problem of cut-throat interest can be controlled, he believes. Rockline says that he depends only on banks.

An exhibitor says he has lost about Rs 1.5 crore because of the lockdown. “When the government decides to open theatres by reducing the occupancy, they should also bring down electricity and water charges and property tax,” he reasons. D K Ramakrishna, president of the Kannada Film Producers Association says banks offer loans at 12 to 14 per cent per year, while private lenders charge 2 per cent per month.

“This is how they make fast money and producers are forced to pledge property and other assets as collaterals,” says Ramakrishna.

Some producers want multiplex ticket prices to be capped at Rs 200. “This will bring people back to the theatres. This must be done till the numbers increase,” says Rockline.

Veteran actor Shiva Rajkumar, who is now looked upon as someone who can lead the Kannada film industry, tells DH, “Every section of the film industry from light boys, technicians, actors to producers have suffered huge losses. We have met the Chief Minister and handed over a list of demands. We hope they will be addressed soon.”

He is also among the first artistes to resume work after the lockdown. Now he is shooting for the movie, Bhajarangi 2. “We must start work because only then many daily-wage earners who depend on the film industry for their livelihood will be able to return to work,” he adds.

K P Srikanth, another producer feels it is better to have 300-seater Janata theatres where Kannada films can be shown. “This way, the producers don’t have to be at the mercy of exhibitors and multiplex owners to screen their films. It’s a win-win situation for both,” he says.

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