Falling Rupee Raising Costs In Tollywood

[Sidhu...Sidhaarth Roy]

Telugu cinema filmmakers are feeling the heat of the Indian rupee's exchange rates plunging to unprecedented low levels, as movie budgets threaten to spiral out of control. With the Indian rupee touching an all time low against the dollar, Tollywood producers are having nightmares over the prospect of shooting 'dream song sequences' at fancy international destinations.

With the current state of the economy, the costs of shooting abroad — hiring local artistes, guides, and locations — has gone up drastically. Producers of three big ticket films currently being shot overseas — NTR Jr's Ramayya Vastavayya, Mahesh Babu's 1, the Venkatesh-Ram starrer Masala — swear by the effects of the dipping value of the rupee.

Burugupalli Sivaramkrishna, producer and President of Telugu Film Producers Council, conjectures that the current economic condition could result in costs going up by 60%! "If the estimated budget for shooting a schedule was around `25 lakhs, (at a time when the rupee was 55 to a dollar), it has now shot up to around `40 lakhs. So, filmmakers need to make adjustment and re-work their budgets. Bollywood films will have a greater impact since major portions of their films are shot overseas," says Sivaramkrishna.

Suresh Babu, who is producing Masala (the Telugu remake of Bol Bachchan), which currently has a Japan schedule, echoes similar sentiments. "The over-all cost of production could just go up by around 20%."

Combined with the hike in fuel and other material costs, the falling rupee has added to the filmmakers' cup of woes. Small time producers are also taking stock of their escalating budgets. "I cannot shoot my film overseas, but with the rise in fuel prices, set properties, and essential commodities, the costs of shooting locally too is also rising," avers a small producer.

Director Charith (Ramesh), who is currently shooting in Vizag and Rajamundry for his forthcoming film, has decided to reduce the shoot duration by 60% in a bid to offset the spike in production cost. "We had planned to shoot for 10 days in Vizag and Rajamundry, but wrapped the whole shoot in four days. I have to thank my producer and artistes for supporting me on this," he says.

While the sense of despair is obvious, some see a silver lining — the prospect of the film's overseas rights and revenues coming back in stronger currencies. Raman Sanchula, an exhibitor and distributor from the US, which contributes to around 85% of overseas revenue, says that filmmakers who sell overseas rights of their films now, can expect to receive more value, comparatively.

"Those who are selling their film's overseas rights now are minting money as compared to those who sold it a couple of months ago. The situation is viceversa for overseas exhibitors as they have to shell out more to acquire the right."

And all this is possible with proper negotiation. Says a filmmaker, "I'm expecting a better price for my film in terms of overseas rights. With the rupee falling steeply, I'm hopeful of
getting a competitive price for my film, provided I negotiate well."