Mumbai: Movie production houses are setting their sights firmly on regional film markets this year as they attempt to diversify risk away from Bollywood.
Zee Motion Pictures is looking to significantly step up its presence in regional cinema, with plans to release up to 60 films in six languages in the fiscal year ending 31 March 2010, up from 10 planned for the current fiscal.
High appeal: An image from Marathi movie ‘De Dhakka’. The regional film market is considered to be less volatile than that for Hindi cinema.
Reliance Entertainment Ltd has a slate of 10 films it plans to release this calendar year through its movie production division, BIG Pictures, up from two in 2008. UTV Motion Pictures Plc. plans to produce three films in calendar 2009, up from three released over the past two years.
The drive for a wider niche in regional cinema comes as an economic downturn and exorbitant prices charged by top actors combine to squeeze returns on investment in Bollywood, as the Hindi movie business centred on Mumbai is called. The strategy has been taking shape recently, according to Sanjeev Lamba, director of marketing and sales at Zee Motion Pictures.
“It seems that everyone is looking at the regional markets with the intention of becoming a major player,” says Lamba. “They are all looking across the board. Some of that consolidation has begun in Hindi cinema and has a long way to go. Consolidation has also begun in the regions and the companies that started looking at the regions in the past couple of years will see that bear fruit in the next two years.”
The sentiment is shared by Mahesh Ramanathan, chief operating officer of BIG Pictures, who says that the company, a unit of the Reliance-Anil Dhirubhai Ambani Group, will be “an active participant” in the drive into the various regional film markets.
“As a national player, we have plans to participate in all segments and we cannot ignore regional films,” contends Ramanathan, adding that “it was always the plan” to move aggressively into regional cinema.
“Each region has its own dynamic and each can make good cinema, but we have to put in more effort to get the script right because regional markets are far more dependent on theatrical revenues. Box office sales account for 80% of revenues in regional markets, compared with only 50% in Hindi cinema.”
Spreading the risk
In addition, the different sizes of the regional language markets result in a variation in the scale of budgets. A big-budget film in Tamil or Telugu potentially involves expenditure of up to Rs25 crore while a big-budget movie in Bengali or Marathi costs up to Rs10 crore.
With up to 85% of total industry revenues derived from six language groups—including Hindi, Tamil, Telugu, Kannada, Marathi and Bengali—Lamba argues that diversifying into regional cinema helps to “spread risk across a wider spectrum” for Zee, which plans to be a “significant” force in the industry.
He adds that although Hindi cinema contributes up to 50% of total movie industry revenue, it is more volatile than regional movie hubs and branching out into language cinema will help offset this.
Adds Lamba: “I think there has been a far greater level of stability in regional cinema than in Hindi cinema. Hindi has been volatile but the volatility and level of investment have been offset by the less volatile regional markets.
Burgeoning market: A handout image of the Marathi film ‘Ek Daav Dhobi Pachhad’, running in theatres now. A big-budget movie in Marathi or Bengali costs up to Rs10 crore.
“Although we have a fairly aggressive plan of up to 10 films in each language cinema, it is a moving target and is subject to economic conditions. A correction has been happening across the region and across the entire film industry, with the main part of the correction happening in Hindi language cinema, where the prices were a little too boisterous.”
Production houses are looking to make a combination of small-, medium- and big-budget films, featuring a range of actors from top names such as Tamil star Rajnikanth to relative unknowns, according to Lamba.
He adds that the relatively more developed cinema infrastructure in India’s four southern states, where half of the country’s theatres are located, as well as the “enormous” price inflation seen in Hindi language cinema in recent years, have served to heighten the attraction of expanding into regional film markets.
Ram Mirchandani, chief operating officer of UTV Rampage Motion Pictures, the regional film unit of UTV, says prospect of high returns in addition to creative opportunities is an incentive to move into language cinema.
“The key drivers here are creativity and revenues,” says Mirchandani. “There are good films to be made in the regions at the right price. We have consolidated in the Hindi language space and now we have decided to look regionally. The business of Tamil and Telugu films is pretty huge—for them, going to the movies is like going to the temple.”