This feature was written by KollyEmpire (KollyEmpire Limited), the official Tamil Cinema box office analyst portal based in the UK. You can follow their official account on Twitter @kollyempire or visit their website at kollyempire.com.
While the peak of Tamil Cinema occurred in 1985, it still generates a substantial amount of cash for the Tamil Nadu economy. In fact, Tamil Cinema accounts for 0.1% of the gross domestic product of the state. It may not seem like a lot, but for it being a far smaller industry than most other cinematic areas. One of the main reasons as to why Tamil Cinema production has continued in the area is due to the intervention of the government. The popularity of Tamil Cinema has risen sharply in just a few years, mainly due to many films produced in the Tamil language now involving star studded casts.
Any movies which have words only in the Tamil Language can make use of a tax exemption. These laws have been changed ever so slightly since then. Now, a movie needs to gain a ‘U’ certificate from the Central Board of Film Certification. If they achieve an ‘A’ certificate then they will not qualify for tax exemption. This has completely changed the type of movie that is being produced with the majority of Tamil Cinema movies now moving towards being more family friendly.
Since most Tamil Cinema movies are not given a major release around the world, or even India, the way in which they are released will be very unique. There will normally be three ‘groups’ of people involved in the process.
You have the producer. Their job is to secure funding for the movie. In addition to this, they will help with general marketing of the movie as well as the selection of areas where the movie is going to be exhibited.
The distribution deal that a Tamil Cinema movie obtains will be important for financing of the movie. Generally speaking, there are three ways in which a distribution contract can go:
- Minimum Guarantee and Royalty: This is, more often than not, the best route for a producer to go down. They will get a fixed, lump sum for the movie. Anything that the distributor takes up to that lump sum is kept by them. After that, any profits are shared between the producer and the distributer.
- Commission: The producer earns commission of showings of the movie. Low budget Tamil Cinema movies go down that route.
- Outright sale: the distribution is sold. The producer gets nothing bar the initial fee.
Exhibition contracts also need to be sourced in advance when it comes to movies. This includes:
- Theatre Hire: the distributor will hire a theatre and will take everything the box office collects after taxes and fees have been paid.
- Fixed hire: a lump sum is paid. No commission goes to the theatre after this lump sum.
- Minimum Guarantee and Royalty: a minimum amount will be paid to the theatre. A royalty is collected beyond this minimal amount.
- Revenue Share: no fee for the rental. Both groups will share the cost of running the movie in the theatre.