Bangalore: Not content with selling people their dream homes, some real estate developers in Karnataka are selling them dreams, celluloid ones, and making a killing in the bargain.
According to Umesh Banakar, a member of local film industry body Karnataka Film Producers Association, almost seven of every 10 films currently on the floor in Bangalore, where the Kannada-language film industry is based, are being produced, if not indirectly financed, by real estate developers. And according to the Karnataka Film Chamber of Commerce, another local film industry body, some 147 films are under production, compared with the usual 80. The real estate developers usually run mid-sized companies, with annual revenues of between Rs100 crore and Rs250 crore, and have been attracted to the film industry only partly because of the glamour.
Real estate developer-turned-film producer S.V. Babu has produced three films and is planning three more next year
The real reason is money, the ability to earn several times the original investment. And most developers have enough to make a substantial investment.
A real estate boom that has seen prices increase by 20-29% over three years in some parts of Bangalore and put money in the pockets of real estate developers is the reason behind this, and no one exemplifies this phenomenon better than Srinivasa Venkatappa Babu.
The 47-year-old is a real estate developer-turned-film producer. He sports a thick rope-like gold chain around his neck, another on his wrist and numerous rings on his fingers—“for good luck”, he says.
Babu started developing residential properties on converted agricultural land in 2000; his entry into the business coincided with the realty boom. He incorporated his company Terracon Projects Pvt. Ltd soon after; the company has since developed projects in Hosur Road and Nelamangala in Bangalore and even Vizag in neighbouring Andhra Pradesh.
Then the film bug bit him (Babu also claims he was inspired by his physical education teacher back in school, Shakti Prasad, who has acted in several cameo roles in films). And so, in 2005, Babu produced Honeymoon Express. The movie was a hit and Babu’s honeymoon with the film industry began.
Babu’s next film, Tenali Rama, was a winner too, although he will not disclose how much he made from the two. All he is willing to say is that he made a loss of 40% on his third film, Savi Savi Nenapu, which was released in 2007. Not that this has changed Babu’s outlook on films. “To make up for this loss, I am launching three new films next year,” he says.
Meanwhile, Terracon continues to do brisk business and Babu juggles his time between overseeing the company’s projects and his films. Terracon is privately held and details of its revenues and profits are not available. Like Babu, another developer who has struck gold in films is E. Krishnappa.
The 49-year-old managing director of Ek Group of companies invested Rs1.5 crore in making a film, Mungaru Male, in early 2007. By some estimates, he has made around Rs50 crore on his investment, with the film emerging one of the biggest hits of the year. Krishnappa claims he made a little more than Rs10 crore on the film, which continues to do brisk business across the state, more than 300 days after its opening.
The film’s success has brought with it some unwanted attention too—Krishnappa has been raided twice by tax authorities. “If I had maintained a low profile by remaining just another developer, I know I would not have attracted much attention. (The raids) are a part of the game: my accounts are clear and I have nothing to fear,” he says.
Real estate is a much more predictable business, says one developer-turned-film producer who has lost a bit and earned a bit more money making films. B.G. Reddy lost Rs10 lakh in 2005 on his first film Mr Bakra, but made Rs40 lakh on his second Hudugaata. Still, he says, “It is safer to make land transactions than films. If you invest on land, usually it appreciates. If you make a film, it becomes difficult to predict its success.”
Nor is it easy to make the shift, says Byre Gowda, another developer who has produced a few films. You have to “deal with moody artists, juggle their dates and organize shooting equipment”, he adds. And some people take advantage of the fact that developers-turned-producers do not know much about the film industry, he says.
However, all this hasn’t turned him off films; he has just worked out a way to avoid dealing with starry tantrums—his next film Sangaathi will feature Gowda junior in a leading role.