BEHINDWOODS COLUMN

A producer’s income from the film does not end when the distribution rights are sold out. At the same time of the distribution rights sales, he can sell various other rights of the film such as audio rights, video rights, overseas theater release rights, overseas video release rights, overseas satellite TV rights, inland satellite TV rights, inland video rights, dubbing rights for other languages, remake rights for other languages, DTH rights, Internet rights and IPTV rights.

Likewise, a producer can sell as much as 60 types of rights for a film.  Most producers, unaware that each one of them can be sold individually, fall prey to greedy buyers who pay a mere few lakhs and wrap the rights of all rights in a single deal. This deal of buying all rights in a single go for small money from innocent producers and earning good profit by splitting the rights and selling them individually has become a thriving business. Notably Satellite TV right purchasing community is notorious for these kinds of deals. Professional agreement on right sales is a vast subject (more on that later).

Audio rights

Audio rights brought home humongous amounts of money. There was a time this whole part of the country was going crazy over film music. That was in the past and easily can be defined as the Golden Era of Tamil film music. Huge competition prevailed for garnering the audio rights of a film. When LP records were reigning the market, only rich folks could afford them and relish the unique music pleasure. Then the big thing called audiocassettes arrived in. They brilliantly broken in to every nook and corner of Tamil Nadu and phenomenally changed the music consumption of the entire state. There was only one emperor of the Tamil music industry in this age and his name is Ilayaraja. In the era of Ilayaraja and T. Rajendar, production houses harvested multiple lakhs of rupees only with sales of the audio rights.

Few music directors, realizing the money making potential of the music they create, floated their own audio companies too. They made profit not only with their own music but released other music director’s works with their companies as well. In the beginning, Ilayaraja’s music was released by banners like HMV and INRECO. Later, Ilayaraja started a company named ‘Echo’ on his own for his audiocassette and music releases. The same ‘Echo’ has tasted great success with the release of T. Rajendar’s ‘Maidhili Ennai Kaadhali’ audio release as well.

During this golden age of audio market, audio rights of movies associated with legendary music directors like Ilayaraja would be sold for great prices. The producer sold the music rights of ‘Dhalapathy’ to ‘Lahari’ for a colossal price. Ilayaraja is one of the very few music directors to have breached the benchmark one crore-rupee business value mark, across the nation. After Rahman’s entry in the arena, the audio right business easily crossed crores. The salary of the music director was determined based on the worth of audio rights business.

Mammoth names like Sony were queuing up to get the audio rights of Rahman’s songs. These are the times audiocassettes and CDs created history in sales. A decade back, it was possible to earn as much as 25% of a small movie’s budget through the audio rights alone, provided a renowned music director is booked the film. For big movies, audio sales would be phenomenal, so there is a guarantee for additional income.

However, at present times, as the influence of internet spreads endlessly, audio piracy and internet piracy downloads considerably hit the cassette and CD sales and has killed the audio rights sales too. Audio rights, which have enjoyed deals of crores during the good times, now do not fetch even mere lakhs. Big names in the audio business have closed the shop. Then how the audio release functions happen as grand gala celebrations? How is it that the music directors’ salaries are termed in crores of rupees?

Music directors like Rahman, Yuvan, Harris and Vijay Antony are famous. No second thought about that. Songs too, become blockbuster hits. However, the people who procure the audio rights are sure to make money in other avenues other than the cassette and CD sales. That is how these kinds of grand audio launches are feasible. In the present market scenario, even for a film with music composed by one of the big names in the industry, the producer cannot sell the audio rights even for 25% of the music director’s salary. Despite this, producers who want good technical caliber and who realize good quality songs would be well received by the audience, do not compromise and approach only quality music directors for their films.

With audio market scenario this bad, how do the audio companies make money with the rights? Surely, there are other avenues. Let’s reserve the topic for discussing later and now concentrate on details about audio rights.

Do you know audio rights are classified in to two types? They are Physical and Digital rights. Physical rights are to earn money through sales of audiocassettes and CDs.

The other one, Digital rights, are the saving grace and endowment for the audio right owners. They provide the authorization for rights of songs downloaded through mobile networks, ring tones and CRP (Calling Recorded Playback – Professional parlance for caller tunes). Audio rights are purchased with current prices only counting on these rights. Without digital rights, audio business would have reduced to dust already. If the producer wishes, he could separate digital rights and physical rights and sell them. However, as this is complicated in the present scenario, no producer opts for this.

The money generated through digital rights is not directly benefiting the audio rights owner. Three bodies split the income.

·         Audio rights holder (The audio company who bought the rights from producer)

·         Aggregator (Who does the conversion of audio and video of the movie as mobile device compatible)

·         Service Provider (Mobile companies who provide the facility to the end customer)

The lion’s share of income goes to the mobile companies called service providers, as it is only through them the income is generated from the public. The balance amount generated is split equally between the audio company and the aggregator (20% each).

In the recent times, a song that has earned close to a crore rupee only by means of digital download is ‘Kangal Irandaal’ from ‘Subramaniapuram’. Being a relatively new film, the digital rights would have been sold only for a few lakhs, whereas the rights generated crores of earnings to the owners. Similarly, Vijay Antony’s ‘Nakka Mukka’ garnered 1.25 Crores. Kandhasamy too has brought in notable income. For the movies with music by the likes of Rahman, Harris and Yuvan, the digital rights always fetch good income. That is how these big names always enjoy great demand. Sony now acquires rights for all Rahman movies in advance. This always would ensure certain pan-Indian income. Also when worldwide business is considered for the movie, Sony would also participate in the advertisement campaign for the film and generate demand for the audio.

There was a time, before the advent of FM radios, where radios were almost obsolete. The common music fan’s only source for entertainment used to be audio cassettes and CDs. Invasion of simple compact discs with hundreds of songs in each of them in MP3 format, downloaded illegally from internet have ravaged and devastated the audio sales. They do the same even now. There was a boon to counter this in the form of FM radios’ influx; business potential was immense too. Sadly, our producers had to leave that golden opportunity slip through their fingers, reason being politics and it also the influence of Sun TV network cannot be denied, which secured forefront in almost all avenues of media.

FM radio channels broadcast songs from brand new movies and earn revenue for themselves. In a situation like this, producers called content providers, allow this to happen without any charges. Ethically speaking, each time an FM channel broadcasts a song, it must pay for that to the producer. Sun network has turned this practice upside down. Their Suriyan was the first Tamil FM channel and it reached amidst the masses very easily and with rapid pace due to their massive network. Producers were enticed by the idea that if they could broadcast their songs in Suriyan FM, they would be benefited with massive reach of the movie and it would be converted in to collections. Sun network has exploited this and exceptional opportunity and converted all the business to it. Almost all the producers followed the suit. Now, there is no use in producers rethinking or repenting about this methodology.

Once, Sri Lankan radio used to pay Rs.10 for each aired song. What we hear about Bollywood, however, differs as producers pay money to channels for airing their songs. The authenticity of this news also needs to be verified.

For songs broadcasted / made available in the flights, the concerned airline has to pay certain amount to the audio company. It is not possible to pay them song wise; and there are few global companies available to manage the transaction of buying the rights as a package and sell it again to the airlines. Same guidelines are applicable for the songs played in restaurants or fuel pumps in other countries. There are many companies, which purchase audio rights of small movies, counting only on the aforesaid rights.

In India too, there is a process to collect money for broadcasting songs in big food malls and places like dance bars. Audio CDs and cassettes could not be broadcast in public; look closely on any CD/Cassette’s cover. There would be rules written there to avoid public playing / broadcasting. These payments have to be routed through a company called I.M.I. However, due to the massive loopholes in our country’s copyright law, this process could not be strictly implemented. Due to these copyright issues, major restaurants and petrol pumps switched over to instrumental music of hit songs. After the arrival of FM radios, this has been stopped too, since FM radio is their ubiquitous choice now.