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Business – ‘South film ind should increase overseas rights’

TE Narasimhan

The south Indian film industry, estimated to be around Rs 1,730 crore, should look at increasing the overseas rights to 8-10 per cent from the current five per cent. This will help the industry penetrate the under-tapped markets in foreign countries, according to research firm Ernst & Young.

The south Indian film industry accounts for the largest share of films produced in the country and also contributes a significant portion to the revenues of the Indian film industry, said an Ernst & Young-Ficci report on the south Indian film industry, to be released on Wednesday at the Ficci M&E conclave here.

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According to industry experts, revenues from cross-border states and other modes are picking up.

While the Telugu and Tamil industries account for almost 90 per cent of the aggregate Rs 1,730 crore, Malayalam contributes Rs 140 crore and the Kannada segment Rs 50 crore.

Among the various revenue streams, domestic theatrical revenues is by far the most dominant, accounting for nearly three-fourths (around Rs 1,260 core) of the total revenues earned. Revenues from cable and satellite television rights come next contributing around Rs 300 crore, followed by international theatrical rights at around Rs 90 crore or 5 per cent, among others, said Farokh Balsara, partner and national leader (media and entertainment practice), Ernst & Young.

The major challenges for the south Indian film industry, according to the study, are lack of finance, under-exploitation of the international theatrical, expansion of target viewership, limited exploitation of non-theatrical revenue streams – one of the key areas where Bollywood fares better, and inadequate marketing, especially for medium and small budget films.

Balsara noted that talent cost alone had increased 30 per cent year-on-year whereas the industry’s revenues had grown only at a modest pace. As a result, only a handful of films are successful while the rest are unable to recover their costs.

“If the present situation persists even for a couple of more years, it portends an ominous future. The industry may witness a spate of bankruptcies and shrinkage in business activity. While all the components of cost have gone up, the steepest increases are in talent cost and the cost of shooting,” he said.

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November 19, 2009 - Posted by | Uncategorized |

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