Mumbai: "The film industry provides a very good opportunity to scale up operations very profitably and with very low risk," quoted Tips Films managing director Kumar Taurani during the conference call conducted to announce the company's quarterly results. He added that Tips's plan is to scale up to releasing 12 films a year in the coming three to five years.
"The dependence on box office success is continuously reducing, as the other three rights (music, video, & OTT) contribute a substantial part of the movie's cost. Going forward, Tips Films very roughly expects its revenue distribution to be 30 per cent from digital rights, 30 per cent from domestic theatrical rights, 15 per cent from satellite rights, 15 per cent from music rights, and 10 per cent from overseas theatrical rights. We will have more clarity on these proportions over the next six to 12 months with more releases," he stated further.
He laid emphasis on the fact that the budgeting of a movie is a critical aspect in deciding its profitability. "Hence during this process, we seek the input of key company executives responsible for our major revenue streams, such as music, television broadcast, OTT distribution & marketing, and overseas release. The financial position analysis in these areas is based on all available information, including the screenplay, budget, schedule, director, producer, and principal cast. We currently have three films under production and are close to signing a deal for one of them. We will disclose more details once the deal is finalised."
He mentioned that the feature film format of 80 to 180 minutes of character-driven storytelling remains very relevant to today's audience.
Historically, movie business revenue was based on satellite rights, video rights, music rights, & domestic and overseas theatrical rights. This revenue distribution saw a disruption in the early 2000s. And music and video rights could not provide adequate monetisation for films for about 15 years, due to technological disruption. The disruption phase he described is now over. "Over the last three to four years, the film industry has seen a drastic change as a result of multiple OTT platforms and the revenue monetisation capability of music rights."
When asked about the duration of making a film, he said that pre-production takes two to three months. He said that, but production these days, depending on the film, can be done in 20 to 25 days; just say 100 days; or if there is a very big film, then maybe 150 days. Postproduction takes three to four months, depending on the number of visual effects in the film. If there is a lot of VFX in the film, it will take longer; eight to nine months is also possible; otherwise, two or three months is sufficient.
When asked about the future of theatres given the OTT competition, he noted that everything will survive. OTT will survive; audiences are different. "Sometimes senior people want to go to the theatre; sometimes they want to watch on OTT. Youngsters are more into OTT. So, again, depending on the quality, which kind of film is thriller or horror, and if it's a big actor, people will go to the theatre; if it's a small actor, people will prefer to see it on OTT. So, there are many permutation combinations, but I feel theatre will 100 per cent survive till we make films."
Speaking on the balance of focus on theatrical releases versus OTT, he said that if the company likes the stories, then it just acquires them. We sign artists, and then at that time, we understand that this will be an OTT film or a theatrical film. As a result, the fact that we release so many theatrical and non-theatrical OTT films is not a guarantee. So, for the next one or two years, we plan to release at least five films per year, with the goal of increasing to 12 films per year in three, four, or five years. "We should release at least one movie every month, whether it's OTT, theatrical, regional, or Hindi, so that's our target for the next three to five years," he concluded.
