By now, everyone knows that 2.0 is the costliest film made in the history of Indian Cinema on an unheard budget of $75 Million (Rs 500 crores). Starring Rajinikanth and Akshay Kumar in lead, the Shankar directorial is a sequel to 2010’s much loved film, Robot. While announcing the film, the producers LYCA promised that they would not be compromising on any technical aspect to make sure that 2.0 proves to be the first global Indian Film.
Any production house that mounts a film as humongous as 2.0 will first churn out an exit route to recover their investments and Lyca too has done the same. Though they have not recovered entire chunk of their investment, it is almost certain that the producers will be in plus once the film complete 7 days of its run at the Box-Office. The makers have pre-sold the digital as well as satellite rights of all three versions for a record amount, which has resulted in a considerable chunk of recovery. While the distribution rights of Telangana/Andhra Pradesh, Kerala, Karnataka and Northern belt have already been sold to individual distributors, LYCA has retained the distribution rights of Tamil Nadu and Overseas. They have adopted the self-distribution model at these two major markets given the fact that the business potential is sky high.
Economics of 2.0 for producers:
Budget including PnP: $75 Million (Rs 550 crore)
Satellite Rights: Rs 120 crore (All Versions)
Digital Rights: Rs 60 crore (All Versions)
North Belt Rights: Rs 80 crore (Advance Basis)
Andhra Pradesh/Telangana Rights: Rs 70 crore
Karnataka Rights: Rs 25 crore
Kerala Rights: Rs 15 crore
Total: Rs 370 crore
The distribution rights at Andhra Pradesh/Telangana, Kerala and Karnataka are sold on outright basis, which means that the distributors won’t share their profits with Lyca. On the other hand, the profits at the Northern belt will be shared by the distributors with Lyca at a pre-determined percentage. Basically, the producers at this point of time are approximately Rs 130 crore short from the break-even point and the modes for recovering this amount would be the amount that they get from Tamil Nadu and Overseas Belt apart from the profits from the Northern Belt. Recovering this amount should not be an issue for the producers of 2.0, as even the worst-case scenario the film will end up getting Rs 130 crore share from Tamil Nadu and Overseas Markets. Vijay’s recent film, Sarkar earned a distributor share of Rs 75 crores from Tamil Nadu and if 2.0 lives up to the expectations, we expect the film to earn in excess of Rs 85 crores from Tamil Nadu alone thereby becoming an Industry Hit. Talking about overseas, Sarkar is looking to end its run around the $10 Million mark and we expect 2.0 to cross the benchmark within its opening weekend alone. Lyca would be expecting a distributor share of at-least Rs 50 crores from the overseas belt. Basically, these three streams of income will make 2.0 an extremely profitable venture for the producers provided that the content isn’t a let-down.
Talking about other distributors, while their investment is at record level, the amount if recoverable given the fact that the hype surrounding 2.0 is at the next level in the regional belt. All that the film needs to be a profitable venture for everyone associated is good universal content.