Movies are like energy shots for general entertainment channels (GECs). They help a channel to define its leadership - one successful blockbuster movie in a week could shoot up the GRPs for the channel and also its position for that week.
However, movies don't come cheap. An exclusive right for a blockbuster movie in 2006-07 cost about Rs 15 crore. However, this turned out to be a risky affair for the channels, as the best of the lot could only recover a small per cent of the revenue in the first telecast. A large per cent of the cost was recovered only after multiple telecasts of the movie spread over a period of six-seven years.
Not much has changed on the front of exclusive deals three-four years down the line. It costs almost the same at Rs 15-17 crore for a big film.
For GECs, movies are not the bread and butter but are bought to spike the ratings and help create positive channel imagery. Movies are not acquired to generate huge revenues - rather they are used to boost the other programming and create channel imagery.
However, in the last few years, both the producers and broadcasters have tried different routes. The syndication deal has turned out to be a win-win situation for both producers as well as broadcasters. While the broadcasters are less burdened with the cost, producers are making more money by selling the same movie to multiple parties.
This trend started when the cost of telecast rights for movies started sky rocketing - partly due to the new players who had joined the bandwagon. It was a typical demand and supply situation. The first syndication deal was done by Studio 18 for Jab We Met in late 2007.
A senior industry observer says, "The launch of channels such as 9X and Imagine (then NDTV Imagine) increased the demand for movies as new channels found movies to be a clear differentiator and an easy way to increase sampling on the channel. This increase in demand also increased the price levels."
Assuming that there are five broadcasters, each of whom is entitled to air the movie four times a year, there would be 20 airings of a movie over a year. "This means that the first broadcaster is entitled to air it in the first fortnight, then the second broadcaster will have the entitlement in the next fortnight and so on. Therefore, it is not open for a broadcaster to air the movie whenever it wants."
As per the new economics, if a movie got Rs 15 crore earlier when the exclusive rights were sold to a single operator, the new syndication increased the price tremendously.
On the other hand, the broadcaster who got the first telecast rights would have to shell out about Rs 2 crore. The second and third broadcasters would pay 15-20 per cent less, and the same rule applies for subsequent broadcasters. In this way, the second and third runs cost about Rs 1.5 crore and Rs 1 crore, respectively. This money is easy to recover.
However, on the flip side, the advertisers' interest started declining on the absence of exclusive rights. A senior media buyer says, "Advertisers are ready to pay a premium for exclusive rights because the window period between the first and second telecast is longer, whereas in the syndication model, the window period is only two weeks."
However, the first and second airing in syndication model still manages to get a higher price but advertisers lose interest for the third and subsequent airings.
Rao of STAR Gold, says, "The stronger a platform - the stronger is the performance. The strength of the platform matters a lot as it determines the reach of the film. Once you have an idea about the kind of reach a particular platform enjoys, it gets easier to determine the performance of the film on TV."
Another problem that haunts channels is the problem of 'too much on too many channels'. When broadcasters start selling movies to advertisers, the promos for the same are run on different channels, making the situation extremely baffling for advertisers and audience alike.
Advertisers have an option of picking the best ad rate without worrying too much about the time and date of the film as there is a window period of two weeks during the initial few airings and subsequently, the window decreases to as low as one week - making it difficult for the channels to sell the property.
"In such a situation, it makes sense to do deals with lower risk," advices Rao.
Keeping the IPR with the production house gives it an option of milking the movie in the long run. The producer has the liberty of striking various deals with other entertainment companies.
The gap between the theatrical release and television premiere also become shorter. For instance, Kites, which is still running in theatres, will be aired first on Colors on June 27. In the past, the channel had premiered films including Ajab Prem Ki Gazab Kahani and Blue even when they were running in cinema halls.
However, the Viacom18 channel is now moving towards an exclusive model and has bagged exclusive telecast rights of films such as Raavan, Mirch and Chaloo Movie for seven years, except for Raavan (for which it has rights for five years). STAR India has also signed some exclusive deals lately, including Paa, Wanted, De Dana Dan, Aladin and Drona for an estimated Rs 50 crore.