Source – Economic Times
BANGALORE: Guneet Monga is a film producer with an impressive record of delivering at the box office. With films such as Shaitan and Once Upon A Time In Mumbai, Monga till now took the traditional route of having her films financed by the major studios and production houses.
But the combination of a desire to bring out-of-the-box film content to Indian audiences and have complete creative control over her project has seen Monga adopt the new-age model of crowd-funding to raise money for her next film, tentatively titled Julia.
“Not everyone has access to the major studios, or the financial clout to bring their project to the screens. In a film-crazy country like India, the social networking sites can be a massive source of funding, if there is greater awareness about it,” said Monga, who frequently collaborates with the poster boy of Indian counter-culture cinema, Anurag Kashyap.
So far the exclusive domain of the indie filmmaker, the success of producer-director Onir in raising almost a third of his 3 crore budget for his film I Am through social networking sites such as Facebook and Twitter has now emboldened mainstream Bollywood.
Other than Kashyap and Monga, the growing roster of film-makers currently exploring the model includes Academy Award-nominated director Ashvin Kumar, who is in the process of raising money for his projects. Other film-makers such as Ram Gopal Varma are also reportedly exploring crowd-funding for their smaller projects.
“Crowd-sourcing in India is currently at the stage where e-commerce was two years ago. It is about to explode,” says Arun Mehra, chief executive, Talenthouse India, a joint venture formed this year between Reliance Entertainment and Talenthouse, the world’s largest online crowd-sourcing platform. The crowd-funding model is evolving rapidly, too.
Film-makers are promising returns on investment to their backers based on their financial contribution. And some, such as Monga, have fine-tuned it: she is in the process of raising 1-crore through the crowd-funding route, but by targeting specific individuals, rather than faceless masses.
“It’s extremely empowering to raise money through the crowd-sourcing route. The benefits are massive-tighter budgets, follow the guerrilla style of shooting and have complete creative control. We are definitely looking to raise funds for more of our features by utilising crowd-funding platforms,” she says, adding that having a brandname like Kashyap associated with the project certainly helped with identifying investors.
Originally envisaged in France around 2004, crowd-funding for films has exploded across the globe as film-makers increasingly leverage the internet-largely through social media platforms-to raise money for their projects.
Ensuring that the funding of films isn’t restricted to the major production houses only, Mumbai-based start-up enabler Springboard Ventures has also tied up with crowd-funding platform Film Interactor International.
“We are going to aggressively look for projects, including funding for the print and advertising aspect of films. The aim is to mobilise between 50 lakh and 4 crore across projects,” says Satish Kataria, managing director of Springboard Ventures. Kataria, who was previously with Vistaar Religare, the country’s first film-focused private equity fund, is currently working with Onir to raise funds for the film-maker’s next two projects
Gaurav Dhingra and Mozez Singh, both investors in Monga’s film, say that the goal is to bring out a superior product, and monetise it by finding new audiences.
“The idea is to promote new and exciting content and package it in a way that it attracts new audiences. So far, Indian cinema has been extremely self-consuming. It has catered only to domestic audiences and the Indian diaspora. That needs to change,” observed Dhingra, managing director of Oasis Motion Pictures.
Film-makers are eager to point out that all the money sourced through crowd funding is investment, not charity, even in the notoriously money-losing business of film-making. Onir signed Memorandum of Understanding with all the 51 investors who invested more than a 1-lakh, each of whom was given a co-producer credit in the film.
“The revenue recovery model is different, but we do try and ensure that our investors get their money back. DVD sales and the sale of satellite rights have ensured that,” he said.
Separately, Monga entered into legal contracts with all her investors, promising them a certain percentage of the profits made by the film upon its theatrical release. “We did not want 100 investors, and therefore, decided on 10 serious players, each of whom is expected to invest Rs 10 lakh. They have the first right of recovery, with the money being divided according to the ratio of investment. The cast and crew get paid after that,” she said.
According to Mozez Singh, co-founder, M Sky Entertainment, while the model is still evolving in India, the fact that film-makers in the country are not only daring to explore offbeat content but also guaranteeing returns to investors is a huge development.
“If an investor is guaranteed a certain percentage as returns, the risk element comes down significantly. Let’s face it, the film business is one that works on guts and instinct, and if a film does well and finds its audience, crowd-funding as a business model will really take off here,” he said.
Separately, the emergence of sites such as Kickstarter.com, Film Interactor and Indiegogo, are being seen as manna for independent film-makers in the country, especially at a time when financing of films has been hit hard by the ongoing credit crunch.
“Looking to raise funds on platforms such as Kickstarter.com is a great grassroots marketing strategy, and get an early buzz started on the film,” pointed out Payal Sethi of FilmKaravan, one of the leading developers and distributors of South Asian independent films.
Sethi, who is also making her directorial debut with Ooty Queen, a film with a budget of Rs 1.25-crore, plans on raising a third of that amount through Kickstarter.com. Pre-production is expected to kick off by April 2012. “Through Kickstarter, I have a 30-day window to raise the capital. Plus, I did not want to wait till I got funding from an established founder. This just made more sense,” she said.