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The Corporate Shakeout In Tamil Film Industry: The Forgotten Lessons of the Paramount Case

For the past one year, there has been a growing interest in media circles in Tamil Nadu about the ventures of corporate film companies such as Pyramid Saimira, Adlabs, Ayngaran, Eros, UTV etc., Media reports speak of a big shakeout in Tamil film industry due to the advent of corporate groups. It must be mentioned here that corporate film companies entered Tamil film industry long after corporates such as Adlabs and UTV entered Bollywood.

The corporatisation of an industry that remained ‘unorganised’ from day one is seen as inevitable by some sections, particularly actors and technicians who are enthused by the clear schedules and prompt payments corporates promise. The corporatisation of Tamil film industry also has its detractors in the producers, distributors and exhibitors who are being elbowed out of their traditional domains. There are mixed reports in the Tamil press about the prospects of of the corporatisation of Tamil film industry. These reports in Tamil press point to the prospects the shakeout holds for the industry and its audience even as they underscore the downside of corporatisation. In comparison, reports in the English press have been hailing corporatisation of the Tamil film industry unabashedly and in an uncritical manner. Probably there is a case for mapping a subaltern divide here as well.

It is being said that the corporate shakeout will introduce financial and other ‘disciplines’ into the sector, besides delivering quality fare for the audience and distributing the profits and losses in a transparent manner. The independent film producers have been pictured in media reports as unprofessional and corrupt, whereas the new corporates are sought to be dressed up in glowing terms in public imagination as professional and transparent. The corporates are also seen as the need of the hour to clean the stables of Tamil film industry.

Written from a lack of even a minimal understanding of the history of studio systems and film economics, these reports also revel in weaving imponderable scenarios such as “Kollywood goes in the footsteps of Hollywood.” A report in The Hindu revealed its ignorance of the history of Hollywood studio system’s vertical integration policies which brought about its downfall in the following manner. “Corporatisation is a welcome change for the Tamil film industry. It adds a lot more credibility. …Like the Hollywood studio system, Tamil cinema is slowly but surely going the corporate way.”

What is not mentioned in these reports is the implication borne of the full-scale vertical integration of the sectors of production, distribution and exhibition the corporates are assidously planning in Tamil film industry. What is not mentioned in these reports is the lesson taught by the vertical integration of Hollywod studios during the golden age of studio system in USA (1920-1948).

The golden age of Hollywood was also the age of monopolistic trade practices by the big studios and the wrath such practices attracted in the form of landmark anti-trust cases, the famous being the 1928 verdict against Favourite Players-Laskey (caused by the actions taken by the FTC, the Federal Trade Commission) and the 1948 U.S Supreme Court Judgement against Paramount studio for taking the logic of vertical integration to phenomenal levels of unfair trade practices.

In the absence of watch dog bodies such as FTC and a strong regulatory framework to guard against monopolistic trade practices, corporatisation of Tamil and Indian film industry would head the classical Hollywood way of debacle. In the absence of cross-media ownership laws, the corporatisation wave is only bound to cause waves of unfair and monopolistic trade practices in the days to come. The emerging scenarios of corporatisation of Tamil film industry attest to the same.

The web site of Pyramid Saimira claims that the group controls 655 screens and 4,29,000 seats in India. The group has produced/released 15 Tamil films so far, besides a good number of films in Telugu, Kannada, Malayalam and English. The group has been making deep inroads into distribution business as well. It has interests in the Tamil television sector too. Recently, it has launched a popular programme, Simran Thirai on Jaya TV, featuring a former Tamil film actor, Simran. Hundreds of individually-owned theatres in Tamil Nadu and other Southern states are being transformed into chains of screens owned by Adlabs and Pyramid Saimira. It must be mentioned here that of the nearly 12000 theatres in the country, 60% are located in South India. Here lies a stronger attraction for corporates like Pyramid Saimira, Adlabs and UTV to up the ante.

With ten companies focussing on all the key sectors of the film industry such as production, distribution, exhibition in Indian and international markets, the Pyramid group has already put in place a strong vertical integration platform which took Hollywood studios nearly four decades to build. The growing profile of Pyramid Saimira is because of its three-in-one role: as a producer, distributor and exhibitor of Tamil films.

The case against the monopolistic trade practice of block booking (invented by Zukor’s Favourite Players-Laskey) was first filed way back in 1921. The practice of block booking (which forced theatres to buy a bunch of unworthy films for screening one saleable film) was made possible by the ambitions of Zukor’s studio to test the waters of vertical integration. Even with the availability of a strong legal and regulatory framework the verdict against Favourite Players-Laskey came only in 1930 and the U.S Supreme Court judgement against the Paramount studio was pronounced only in 1948. It took nearly three decades for the regulatory system in USA to bring to an end the monopolistic practices caused by the vertical integration of the business interests of Hollywood studios.

The moot point for us in India is how many years (decades?) would take us to at least come to terms with the looming dangers of the corporatisation of Tamil film industry in the absence of any regulatory and legal framework against the implications of the vertical integration of production, distribution and exhibition sectors.

The way out of the so called untransparent, unprofessional and corrupt system of productions by independent Tamil film producers surely can not be the way Hollywood studios followed for the self-destruction of the so called golden age.

I can hear readers pointing to our MRTP (Monopolies and Restrictive Trade Practices) Act, 1969. In my considered opinion, it is one of the classic legacy acts of our socialist past and one which is ill-suited to deal with the implications of global flows of capital and resources which nourish the present models of vertical integration.

We had the wisdom (?) to open our telecom sector to take in the winds of liberalisation without any regulatory framework in place. TRAI (Telecom Regulatory Authority of India) was introduced to the chaotic telecom scene much later as an afterthought to fix the merry-go lucky violators. The same is the story of the opening of India’s insurance sector. IRDA (Insurance Regulatory and Development Authority) was thought of as a solution long after the problems of stakeholders started showing nasty dimensions. We only had the Cable Television Networks (Regulation) Act, 1995, after millions of kilometres of cables criss-crossed the roof tops of millions of Indian households. So let us wait till the vessel of unregulated corporatisation of film industry blows over and spills out a string of unfair and monopolistic trade practices.


1 Kishore Budha { 03.30.08 at 1:04 pm }

Ravi: We should also consider what happened post Paramount decision. From the early 1950s on the studies gradually produced fewer features, cut their permanent payrolls, and came to operate increasingly as providers of facilities for independent production companies constructed around an individual writer, director or star… Changes in the industry since 1960 have largely continued the patterns established after the Paramount decision. The majors, concentrating their industrial power in their role as distributors, replaced the studio system of production with one in which they acted primarily as bankers, supplying finance and studio facilities to independent companies. How does this inform the Indian scenario? One, the Indian media completely gets it wrong when it compares the “industrialisation” of Indian cinema (distribution, exhibition) with the studio system, in which companies such as Paramount also produced films themselves. The Indian scenario is modelled after the post-Paramount decree. Thus, in the case of Tamil Nadu (as we have witnessed in Mumbai), we will witness the same set of filmmakers making the films. The “corporate” players (as the media likes to call them, Corporate here not just a statement of fact but also symbolising a normative “modernity” of production practices) will fund and distribute the films. Thus, we will continue to see star or director-led films as in a market-scenario the audience would like to believe that they are paying for and consuming a unique product. We have already discussed commodification in your last article.

2 Kishore Budha { 03.30.08 at 1:20 pm }

When historians speak of the structure of the Hollywood industry after World War II, they describe it as the period of the ending of mass-production of films and the diffusion of independent production — the package-unit mode of production. This is essentially how the “unorganised” industry in India too has functioned. What has been lacking is mass ownership of cinemas and an organised, industrialised distribution system with access to capital from market instruments such as banks. This is now emerging. It is not in the interests of companies such as Adlabs, UTV to take on the headache of production. Instead, they negotiate with producers who will conceptualise the film along with the executives of the company. Once the due-diligence on the film (market analysis, viability) has been done the contract is signed and the film company monitors the production. The “package unit” handles the production on behalf of the film company. The enthusiasm of the media reflects their own ideological biases and hopes. Despite the cosmopolitan chic popular cinema has acquired (bourgeoise and middle classes no longer squirm at the thought of watching a Bollywood or Tamil film), there is still a not-yetness about Indian cinema. How else can we explain the increasing resemblance of popular films to Hollywood films (production values).

Thus, “corporatisation” is the imagination that industrialisation will “modernise” and “rationalise” the popular film and the way it is produced. The point that is not understood that this film form is already rationalised. Popular film has been made and sold in the market. It is a sophisticated operation. Thus, corporatisation will not produce a different film.

3 Gopalan Ravindran { 03.30.08 at 1:36 pm }

Thanks for the different take on corporatisation. You are right that it will not produce a different kind of cinema and it is a symbolic reflection of the normative modernity. But I am afraid corporatisation is also in the process of snatching away the plurality and freedom of choices made possible by the contentious, chaotic and unorganised individual producers, distributors and exhibitors, at least to the non-multiplex film audiences in the rural hinterlands of Tamil Nadu and other southern states. In a market that is faithfully reflective of the scores of other inequalities, the so called A, B, C centres convey different things to the corporates and their detractors and consequently receive different treatments as well. This has also opened up a new space for Tamil dubbed Jackie Chan and Hollywood films in the rural theatres of Tamil Nadu. I am not sure whether the same implication of corporatisation prevails in the Bollywood territory.

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