Ownership of IP is turning out a big incentive for producers to switch to online streaming services, and might end up forcing a change in how TV producers work with them.
In its earnings conference call, music and entertainment company Saregama said that they’ll be getting into film production, and the approach is in consonance with their philosophy of owning the intellectual property of the content that they create. It is also why they’re working with Sun TV as a broadcaster, and have stopped making Hindi TV serials.
“The good part”, about working with SUN TV, Saregama MD Vikram Mehra said, “is that Sun TV allows content producers to retain the IP of the serials that we are creating”. “We worked last year also making content for Hindi TV serials. We have decided to completely stop that part because the IP is not retained by us. Hindi TV channels do not allow content producer to retain in the IP hence we do not want to pursue that any longer.” The company, at any given time, runs 3-4 serials on Sun TV, which are profitable. However, Saregama doesn’t see that business scaling in the short run.
Meanwhile, Saregama is getting into film production: not the “big filmy Bollywood” type, but into thematic films under the Yoodlee films banner, which, according to Mehra, “are practically zero on star cast, will have very limited theatre release”. Instead, “where the big market for it will be sitting with these large content platforms like Netflix, Amazon, Jio, Hotstar. Online platforms, Mehra said, “need content, which is differentiated from the regular Bollywood content. Those are the kinds of films we will be doing.”
“For every app that comes on board even the big ones like Netflix or Amazon they all need exclusive content,” Mehra explained on the call. “Now it is very difficult to manage exclusive content of big filmy Bollywood people, so they also want other kind of exclusive content, and that is a content we are creating”, Mehra continued. More importantly, for Saregama, the IP off all of these films is owned by them, and they will only license it to platforms on a limited basis: “we are not going to let go of IP.”
“Our plan is right now to launch a movie every month”
Saregema wants to launch a movie a month, and five films are already read, under the Yoodlee banner: Abhi & Anu, Brij Mohan Amar Rahe, The Noblemen, Ashcharya Chakit and Hamid. The release appears to have been delayed, since Saregama had said in its annual update that the first film (Brij Mohan Amar Rahe) was set to be released by September 1st 2017; the second, Abhi & Anu, was due for release on September 22nd 2017. Another film, Ajji, was supposed to release in October. It had said then that it is targeting 50 films in four years, and around 12 films a year. Saregama essentially decided to send Ajji to film festivals for screening, and plans to release it first, and the rest of the films will follow.
These films, Mehra said, have budgets in the “low single-digit Crores and we should be able to go back and make a recovery easily by licensing them to these platforms or cable and satellite channels.” They will have a limited offline release with PVR, targeting thematic audiences, in six to ten towns, with the primary purpose being to “recover the cost of advertising there and ensure that an enough critical reviews written on the film so that the valuation for digital guys and TV guys goes up.” The first theatrical release is planned for November.
“The intention right now is that we can play huge volume to our advantage to reduce the post production cost”.
These films are being shot in 18-21 days, and “the maximum time that it will take from the time we green light a film to the film getting released out there, and licensing happening will be six months so that the turnaround times are that much faster.” Saregama is ensuring that all the star-cast comes on board “as practically zero prior cost and
we end up doing up a profit sharing with them right now in case the movie gets profitable.” This ensures that the initial cost is low, and everyone has skin in the game.
“We have no intentions to make these big blockbuster movies right now. That is not the space we are in,” Mehra said on the conference call. The approach is not to make sure one out of 12 movies succeeds, but “every movie on the minimum should recover at least 75% of the cost,” and “majority of the movies should go back and recover the cost and make some kind of profits for us.”
“The good thing about the movie business”, Mehra said, “is the long-term revenue impact that keeps and coming in. It is not three years, it is not five years, it is not 10 years as some of the other listed companies, we are going to go back and see they are making money off the movies that we produced some 20 and 30 years back, also that is the advantage of this stream. With a clear focus that IP in perpetuity will always stay 100% with Saregama, we believe 10 or 20 years down the line this will have a huge advantage for us.”