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NEW DELHI : The Indian film industry is in for tough times with escalating costs of projects, primarily due to the unreasonable fee hikes by the lead star casts, and a section of technicians, despite the poor show at the box-office, said industry insiders.

Skyrocketing costs have not only made projects untenable, producers are also not making enough profit to even consider launching their next films, and have decided to put upcoming projects on the back burner.

The trend is not only damaging Bollywood’s prospects, but also that of the Tamil, Telugu, Malayalam and Punjabi film industries.

“The issue is the same across industries. Actors and technicians are taking away such a big chunk of film budgets that producers are left with nothing, even if the movie manages to make some profit. Film budgets have risen disproportionately in the past five years and it is indirectly killing box office potential," Atul Mohan, editor of trade magazine Complete Cinema, said.

With the likes of Allu Arjun, Ram Charan and Mahesh Babu for instance, charging upfront fees of 80-100 crore, Telugu producers suspended shooting of films earlier this month to negotiate and come to some agreement on remunerations. According to people in the know, star fees have risen five to 10 times in recent years. The VPF (virtual print fee) charges for digital distribution players such as UFO Moviez, varying between 12,000 and 15,000 per screen, and shorter window for premiere of movies on over-the-top (OTT) platforms, have also added to the woes.

“While producers are to be blamed for using box office collections as a marketing tool to generate buzz around films, the strategy has backfired with actors demanding higher rates for projects as they believe the success of old movies is based on their box office draw and fan following," Mohan said.

Producers paying for a star’s entourage, including security, managers, gym trainers and on their accommodation are unfair, especially when they are charging high fees, said Sunny Khanna, a film producer and distributor. “Producers are making peanuts even if the film is a hit. The idea (of negotiations) is to make stars see sense and have them come on board as a partner who can have a share of profits if a film is a hit," he added.

Technicians too have hiked rates with producers looking to make larger-than-life spectacles to lure audiences to theatres, besides the VPF costs paid by producers for showing their films using digital projectors and technology, remains contentious, he said.

In fact, producers and theatre owners have difference of opinion over splitting the costs paid to digital service providers, such as UFO. Both parties are trying to ensure the burden does not fall on one of the stakeholders and are negotiating a reduction in overall rates.

The Telugu Film Chamber of Commerce has also called for an urgent resolution on the window between theatrical and digital premieres of films, which the body feels is hurting the prospects of movies in cinemas. Producers said small and medium-budgets films that do not feature popular stars deserve variable pricing on tickets and cannot cost the same as big, tent-pole titles.

“Producers in south have always been more united and proactive in taking up industry issues. In Mumbai, while the issues are the same, nobody sees eye to eye on how to go about it. But if Telugu film makers succeed in resolving the issues, other industries will definitely follow," Mohan said.

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