New Delhi: At the end of last month, Tamil film producer Ashok Kumar hanged himself to death in his apartment in Chennai. Cousin of popular director Mr. Sasikumar, Kumar blamed main financier N. Anbuchezhian for his suicide in a two-page memo, claiming he had to pay exorbitant interest for loans taken for film production, had been harassed for years and eventually led to the brink by the financier when he couldn’t pay it back. The tragedy comes a few years after famous producer G. Venkateswaran, older brother of director Mani Ratnam, committed suicide, allegedly under pressure from financiers, including Anbuchezhian.

Industry experts say the funding problems in Tamil cinema are more than loan sharks. It all comes down to the unorganized nature of the industry. Unlike Bollywood where the culture of business-oriented studios only picked up in the last decade, the South Indian film industry, including Tamil, Telugu, Kannada and Malayalam cinema, was ruled by private studios like Prasad Art Pictures and Gemini Studios in the 1980s and 1990s. However, over time the system disintegrated, giving rise to smaller independent producers.

“Anyone can become a producer here (in the south),” said independent business analyst Sreedhar Pillai. “Every year, 200 Tamil films are made, of which 190 are made by producers for the first time. “

The unknown record of these individuals requires financiers who are individuals providing funds for film production at interest rates of 36-48% per annum. Assuming it is even a Rs1 crore loan, the producer has to pay Rs4 lakh per month or Rs48 lakh per year in interest. A Bollywood production house, on the other hand, would get bank loans at 18-24% per annum. The crisis comes when films fail and individual producers have to take the brunt of it, given that most of them are fully customized projects by people with no distribution or exploitation experience.

What’s more, Pillai points out, most producers in the south are also hungry for better pre-sales and don’t sign satellite or digital deals until the film’s release, expecting a huge sum. If the film explodes, prices fall to a quarter of what was expected.

Moreover, institutional funding is not the easiest alternative in the south. D. Paranthaman of production house V Creations, which has supported films like Kabali, said bank interest rates fluctuate based on the producer’s track record and reputation.

“Banks won’t give loans to everyone. It must be a reputable company and artist (in the lead), ”said KS Ravikumar, director of films like Lingaa and Dasavathaaram. “Even then, there are a lot of formalities that are not easy to get around. higher authorities or have recommendations.

The need for loans, in the first place, say trade experts, stems from the mandatory presence of a bankable star to make a project viable. The star-centric culture, especially Tamil cinema, results not only in the dominance of big-budget mainstream films, but also in financiers (and sometimes banks) approving loans only when there is a familiar face on board. Ravikumar points out that a financier would not even consider an Rs1-2 crore movie without big names because there would be no guarantee on its release.

“It (donated funds) depends on the artist. There are only four or five artists who would be given a lot of money; no one will pay for the others. They can give for the directors, but without the presence of a star, it is also a risk for the financiers, ”said P. Vasu, director of films like Chandramukhi and Kuselan.

Previously, the film would be in the hands of the producer who would decide the director and the story, except perhaps in the case of a Rajinikanth, Kamal Haasan or MG Ramachandran-starrer. But today the whole production process revolves around the main man. And producers, especially in the Tamil industry, take out loans to pay the hero up front.

Trade experts say that Tamil superstars like Ajith or Vijay receive around Rs 30-35 crore as compensation, of which they demand Rs.15 crore as an advance. Telugu actors like Mahesh Babu or Pawan Kalyan, on the other hand, would receive Rs20-25 crore of which only a token amount of Rs1-2 crore would be demanded upon signing the film and the rest would be given after completion.

“Today the heroes decide who would be the director, and sometimes even the producer,” Vasu said. “If the director has a story, it will go straight to the hero. If I have a big hero in hand today, any big banner or business will come to me. But if I say I have a good story, they will ask me if I have a hero. “

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