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Is the Telugu Satellite market dying or changing?
By: Tupaki Desk | 16 Dec 2019 6:19 AM GMT
Selling Digital rights, is the new way that any production house can cash some extra profits these days. Either to Amazon Prime or to Netflix or to Hotstar or to Zee5 or to SunNext, Telugu producers are planning to sell their movie streaming rights, exclusively at a higher base rate, before they even start paying advances to stars and crew.
From producers like Geetha Arts, Suresh Productions, Dil Raju and few more active people in the business, the direction to new story writers and directors, is to think about a script that includes Satellite, Digital markets audiences as well.
Hence, many of the recent films are aiming for either U/A or U certificate from censors which will fetch them higher rates from these mediums opposed to going for an intense and raw portrayal, which will limit their revenue from theatricals and these additional revenue mediums as well.
For a producer these days, Satellite and Digital rights are the only sources of revenue as they are offering theatrical right valued amounts to stars and selling rights to distributors and exhibitors at exorbitant prices to adhere to star remuneration demands.
From star heroes to directors to technicians, everyone wants to cash the craze and producers are ending up with losses or break-even shares as profits are going to distributors and exhibitors.
Big producers who have established a separate wing for distribution and exhibition, decided to go for profit sharing scheme with 3rd party exhibitors and distributors to avoid big losses from their projects.
Now, they have to deal with a new problem due to digital boost. Recent biggies are made available for streaming within 30-45 days of a movie release. While this is limiting the theatrical run, it is also narrowing the window for Satellite broadcasters to telecast these films.
They can't just telecast a film within 10 days or 14 days of release. They need to build momentum for the premiere and generate ad revenue deals to telecast a film.
For digital streaming, any OTT platform can decide on a date and say that they are making it available from certain date and time. They have to spend money on ads and promotions for a minimum of 2-3 days through Google ads or through conventional mediums. And they can move on to next.
If people install their service for one film, the already available others can attract them to stay on their service. This way, they can increase the number of subscriptions and they can also demand the online advertisers for bigger amounts to stream ads on their platforms.
This is the logic behind them spending some exorbitant amounts to capture the rights of big budget films and medium budget movies. Since, you have already subscribed to their service to watch one film, you try to maximise your returns out of it, by watching some other films and web-series available on the platform.
The more time you spend on a platform is directly proportional to the number of ads a service can stream on their platform. On top of that, if you want to watch new shows or if you got addicted to watching films, tv shows, web-series on such platforms, you pay them subscription fees too.
Even though initially, the amounts spent on acquiring rights of biggies for digital streaming end up on loss side of the balance sheet, in long run, they can convert that amount to profits. With stricter piracy rules and policies, the streaming sites are looking to expand aggressively in potentially bigger consuming markets like India further.
Hence, Satellite TV market is unable to bare the costs of film rights for Satellite broadcast. Producers don't want to decrease their profit margin as stars are increasingly getting expensive.
Audiences are also not showing interest in watching a movie on there satellite broadcasting channels as they decide on the ad breaks - the length and placement. On streaming services, they are allowed skip ads or if they spend some more amount they can go premium and avoid ads, altogether.
With these changes, Satellite market is looking to transform themselves. Each and every Satellite channel is looking come up with their own digital service while even production houses are also thinking in that direction.
Right now, due to global market slowdown, the Satellite channels have stopped buying rights for films and are figuring out a way out of all the economical problems.
For films like RRR, Chiru152, AA20 and Prabhas next, the revenues might decrease from Satellite market but for medium and small budget movies, if Satellite market continues to plummet, then their means profits will evaporate without any trace.
From producers like Geetha Arts, Suresh Productions, Dil Raju and few more active people in the business, the direction to new story writers and directors, is to think about a script that includes Satellite, Digital markets audiences as well.
Hence, many of the recent films are aiming for either U/A or U certificate from censors which will fetch them higher rates from these mediums opposed to going for an intense and raw portrayal, which will limit their revenue from theatricals and these additional revenue mediums as well.
For a producer these days, Satellite and Digital rights are the only sources of revenue as they are offering theatrical right valued amounts to stars and selling rights to distributors and exhibitors at exorbitant prices to adhere to star remuneration demands.
From star heroes to directors to technicians, everyone wants to cash the craze and producers are ending up with losses or break-even shares as profits are going to distributors and exhibitors.
Big producers who have established a separate wing for distribution and exhibition, decided to go for profit sharing scheme with 3rd party exhibitors and distributors to avoid big losses from their projects.
Now, they have to deal with a new problem due to digital boost. Recent biggies are made available for streaming within 30-45 days of a movie release. While this is limiting the theatrical run, it is also narrowing the window for Satellite broadcasters to telecast these films.
They can't just telecast a film within 10 days or 14 days of release. They need to build momentum for the premiere and generate ad revenue deals to telecast a film.
For digital streaming, any OTT platform can decide on a date and say that they are making it available from certain date and time. They have to spend money on ads and promotions for a minimum of 2-3 days through Google ads or through conventional mediums. And they can move on to next.
If people install their service for one film, the already available others can attract them to stay on their service. This way, they can increase the number of subscriptions and they can also demand the online advertisers for bigger amounts to stream ads on their platforms.
This is the logic behind them spending some exorbitant amounts to capture the rights of big budget films and medium budget movies. Since, you have already subscribed to their service to watch one film, you try to maximise your returns out of it, by watching some other films and web-series available on the platform.
The more time you spend on a platform is directly proportional to the number of ads a service can stream on their platform. On top of that, if you want to watch new shows or if you got addicted to watching films, tv shows, web-series on such platforms, you pay them subscription fees too.
Even though initially, the amounts spent on acquiring rights of biggies for digital streaming end up on loss side of the balance sheet, in long run, they can convert that amount to profits. With stricter piracy rules and policies, the streaming sites are looking to expand aggressively in potentially bigger consuming markets like India further.
Hence, Satellite TV market is unable to bare the costs of film rights for Satellite broadcast. Producers don't want to decrease their profit margin as stars are increasingly getting expensive.
Audiences are also not showing interest in watching a movie on there satellite broadcasting channels as they decide on the ad breaks - the length and placement. On streaming services, they are allowed skip ads or if they spend some more amount they can go premium and avoid ads, altogether.
With these changes, Satellite market is looking to transform themselves. Each and every Satellite channel is looking come up with their own digital service while even production houses are also thinking in that direction.
Right now, due to global market slowdown, the Satellite channels have stopped buying rights for films and are figuring out a way out of all the economical problems.
For films like RRR, Chiru152, AA20 and Prabhas next, the revenues might decrease from Satellite market but for medium and small budget movies, if Satellite market continues to plummet, then their means profits will evaporate without any trace.
