Is bringing down cinema stars’ remunerations enough?

With Producers’ Guild announcing strike from 1st August, people are saying stars should reduce their remunerations. Is it enough?

Producers of Indian Cinema are shocked looking at the turnouts at Cinemas post Covid-19. People are happy to watch movies on OTT platforms or Satellite TV. Going to theatres as become a luxury that they cannot afford. Bringing down prices will help but production budgets have increased ten folds and recovery costs have been too high. With such budgets, producers cannot go for low ticket prices looking at the limited interest and attendance of public.

So, many have been saying that decreasing star remunerations should help. A star is paid according to the value he or she brings to the table. Like if a star demands least price One crore. then they should guarantee that recovery or 200% more than what they have demanded. Like if they can bring 3 crores business to the table, they can demand 1.5 crores as their remuneration, according to today’s rules.

Once upon a time, If a star brings 3 crores business, then they used to demand Rs.50 lakhs as remuneration. So, the production budget used to be 1.5 crores and others’ remunerations used to be covered in Rs.50 lakhs. The Producer used to get table profit of Rs.50 lakhs, just by getting a star’s dates. Hence, dates of an actor have become so important.

This promoted greed too. Not saying or claiming that stars have become greedy but the people or staff around them who work like “mediators” started promoting false propaganda by giving unbelievable numbers during the first weekend or first day to them. Everyone knows that star brings crowds during the first day or first weekend. This is where mediators come in. Producers promise to pay them some percentage of hero’s remuneration for “getting them dates on priority”. To increase this amount, mediators go to stars and claim that they are being underpaid while they tell to producers that stars are becoming greedy.

With producers hoping to make that Rs.50 lakhs table profit and increase it, the game of horse trade has begun. Who pays them the Rs.3 crores? – Distributors or presenters or promoters or people who buy theatrical or Satellite or Digital rights. Let’s take only theatrical rights.

Generally, distributor calculates the star value, response to the teasers and trailers, combination value and then quote their figures. But for a big star film, they pay the minimum guarantee amount to producers as that becomes the star value. This minimum guarantee amount in our example is Rs.3 crores. So, if a film fails to make even those Rs.3 crores back, then it is a disaster.

Today, business model has changed due to the horse trading. Due to craze for combination, according to our example, producers are paying Rs.2 crores to cast and crew, with Star taking Rs.1.25 crores and others getting Rs.75 lakhs. Means the Rs.1.5 crores production budget has come down to Rs.1 crore or even less. If people understand that this has become a problem and try some amends, then these mediators won’t be able to make their percentage.

This prompted them to find those people who don’t have any connection with Industry as distributors. These distributors’ start their bidding in the horse trade and offer Rs.4 crores or Rs.5 crores to producer. This seems like a viable business plan. But did the market increase to Rs.4 crores or Rs.5 crores?

Suppose a star’s hit or blockbuster, again taking only our example, does make Rs.7.5 crores. As distributor paid Rs.3 crores to producer for rights, And movie made double that amount, producer would ask to give some percentage in the overflows. The amount above Rs.4 crores can be considered as overflows or by standard business plan, above Rs.6 crores can be called overflows.

Showing this as an example, “mediators” started bringing new distributors and have put pressure on producers to find crazy combinations only. So, the budget has increased to Rs.5 crores or Rs.6 crores from Rs.3 crores and those Rs.3 crores have become star’s remuneration as this is minimum guarantee.

A minimum guarantee amount means everyone in the business avoiding losses. But hoping to make Rs.7.5 crores or Rs.10 crores with every film of a star won’t help anyone. Producers rather than concentrating on story, screenplay and technical standards, they started chasing a director, a cinematographer and a star. To get them all, they have to pay these “mediators” commissions, percentages. Some bring their own “distributors”, “financiers” who promise sky and then disappear.

Avoiding this lot who have been becoming over greedy and bringing transparent business model that openly declares collections, calculating the budget looking at the script rather than combination should help rather than just asking for reduction in star remunerations.

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