Now, UFO Moviez enters film distribution, seeks to offer more content at a lower cost

Kapil Agarwal, Joint Managing Director, UFO Moviez, said the company had two options for expansion: film production or distribution. And the company preferred the latter as film production is investment-heavy.

“Theatres are running empty currently because of a dearth of content. Many haven’t reopened and many are looking at permanent closure. We are making sure theatres don’t shut down by giving them content for all 52 weeks. This way we will be bringing more audiences to theatres, which will help us increase advertising revenue. More footfalls mean more advertiser interest,” Agarwal said, explaining how venturing into film distribution will help UFO Moviez’ overall business.

Explaining why expanding into film distribution felt like the right decision, Agarwal said: “Our first stakeholders are theatres. Currently, they aren’t getting content. So, by providing content to them we are making sure that they don’t shut down.”

A film every week

UFO Moviez plans to provide at least one film every week to exhibitors so that the theatres have a strong content pipeline, helping the industry, which has been reeling under the impact of the Covid pandemic, get back on its feet.

In fact, Agarwal said the decision to venture into film distribution was accelerated because of the pandemic.

The first film the company is distributing is Shakeela, starring Richa Chadda and Pankaj Tripathi, which will be released on December 25.

In 2021, UFO Moviez will distribute around 11 films, including movies such as Ram Prasad ki Tehrvi, starring Naseeruddin Shah, which is slated to release on January 1, and three films by Ram Gopal Varma — horror thriller 12 O'Clock, Disha Encounter and Murder.

The business model

So, what is the company offering that is new when it comes to film distribution? “For producers, the expense on print and advertising (P&A) is a heavy cost. And we have seen in the past that even when movies are ready producers are unable to release because of the P&A cost they have to pay up front to digital cinema companies and exhibitors. We are converting that into a variable model based on collections.”

Instead of an upfront payment for P&A, UFO Moviez is asking for a percentage of revenue from the box office business that the movie collects after its release in theatres.

“The producer has to run from pillar to post to distribute his/her film. Plus, there are heavy charges for distribution. Then the P&A cost. On an average 300 to 400 movies do not release every year because they cannot find distributors,” said Agarwal.

Movies that don’t get released in theatres are mostly small to medium size films. While big ventures have distribution companies such as Dharma Productions, which distributed the Baahubali franchise, Yash Raj Films, Eros International doing the needful, small and medium size films have a tough time getting a distributor.

Along with distribution, UFO Moviez, which is also into cinema advertising, will be using its extensive ad inventory to market upcoming films that it will be distributing.

Plus, the company has tied up with a company that is willing to invest in the advertising cost. So, if a producer has no money to advertise his/her film, the tie-up will help, said Agarwal, who said that company’s name would be revealed soon.

Along with fee-based film distribution, another strategy UFO Moviez is currently looking at is releasing films from down south dubbed in Hindi.

“We will also be bringing a lot of south Indian content in dubbed languages which do not come to northern markets because of the P&A cost. We will also try taking Hindi films to southern markets,” added Agarwal.