Colors strikes deal with Eros to acquire 9 films @ Rs95 cr

04 Jul,2012

By Nandini Raghavendra

 

Raj Nayak

Colors, Viacom18’s entertainment channel, has struck an exclusive seven-to-nine year deal with Eros International to acquire a slate of nine yet-to-be-released films for around Rs95 crore, marking a return to the movie space.

 

This is the first big external acquisition this year for Colors, after the channel sold a large chunk of 500 films from its library to Star Network earlier in January this year, as it deferred the launch of its own movie channel.

 

Earlier this year, the channel had picked up an entire slate of 17 movies from Viacom 18 Motion Pictures, a Viacom group company.

 

Confirming the deal, Colors chief executive officer Raj Nayak said: “The way movie prices are going we decided to take a pause. It is not viable for one channel to pick up films at those prices as we cannot amortize it across our channels. At the same time, being a leading general entertainment channel, we cannot not offer movies.”

 

The deal is exclusive to Colors, which retains the right to syndicate the films. As for building their library again with more movies, while talks with a few independent producers to acquire more films is on Mr Nayak says price will be the deciding factor.

 

It must above all make business sense. Which is why as a strategy, Colors has made a big shift into non-fiction programming and experimented with shows like ‘Ring Ka King,’ and the recently acquired the dance reality show, ‘Jhalak Dikhla Jaa’.

 

While the satellite market has seen many ups and downs, it remains a huge source of income for producers and makes for as much as 20-35 per cent of a film’s recovery costs, especially the big ones. For Eros, it also reduces risk prior to release. Broadcasters who are in a race for ratings have been paying huge sums for big films.

 

Industry insiders say, on condition of anonymity, that it is difficult to recover anything beyond Rs20 crore per movie. But the pressure to improve viewership is unrelenting. “The reality on a movie premiere is that it cannot recover more than 30 per cent of its cost; and the rest is across the years,” said Mr Nayak.

 

Source: The Economic Times

Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

Photograph: Fotocorp

 

 

 

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