"Let's build a combination, invest money, sell it, and earn a pitiful profit. That's the guiding principle of telugu producers today, according to ace producer dil Raju, who also believes that producers would ultimately lose out due to this business model's negative effects on distributors. Raju discusses the telugu film industry's 85% failure rate in his most recent interview for "Open heart with RK."
Raju explains that with production costs, including remunerations, hiked, the producer is spending the maximum amount he will get after sales, resulting in lower profits, when discussing the whole fiasco of how films are made in the telugu Film industry and why people like producers and distributors are seeing losses. As a result of misconceptions about producer earnings, Raju also breaks into the spending and collection phases.
According to dil Raju, if a movie earns 200 crores "gross" from telugu states, 18% of that amount was lost to GST (36 crores), and another 25% will come through theatre rentals. And the distributors receive a "share" of 110 crores from it. Another 25% of the picture will be lost if the distributor purchased it on an NRA (Non-Returnable Advance) basis. Thus, the producer only receives 85 crores in total.
And he claims that if a movie makes 100 crores in total revenue (the amount the producer receives), the producer is spending 95 crores well in advance. He clarified that if the distribution is delayed due to "interest" payments on the loans borrowed, this $5 crore profit will be impacted. "Even if the producer is now the first to spend money, he will also be the last to receive it back. Everyone, from artists to technicians to financiers, accepts payment in advance, but the producer only receives payment after the outcome, the speaker continues.
What about the extra funds being used by OTT platforms to buy rights? "OTT platforms do not pay you in advance but rather pay you a month after the film's release. So, in order to release a movie, money is needed. Don't overlook the TDS fees and GST that a producer must pay, added dil Raju. And this explains why dil raju is planning a big release for every one of his films, despite what critics may say, because in order to recoup the substantial investments, one must make risky decisions even if they must endure criticism.