The recent OTT agreement for Mandaadi (Tamil) reportedly highlights a growing trend in digital rights acquisitions. Netflix initially offered a flat deal of Rs 15 crores. The producer pushed for Rs 25 crores to cover the Rs 45 crore budget. Later on, both sides agreed on a performance-based structure. The deal set a base payout of Rs 10 crores. It added escalations up to Rs 40 crores if the movie hit key box-office benchmarks. Mandaadi crossed the target, turning the risk into a major payoff.
This kind of arrangement is nothing new in the film industry. Performance-linked contracts are a double-edged sword for producers and streaming platforms alike. When a film succeeds theatrically, the producer maximizes profits. The OTT platform pays a premium, but only for proven content. When a film fails, the table turns drastically.
Toxic bites the dust:
The danger of this gamble is evident in high-profile misfires like Yash's Toxic. The makers of Toxic turned down a lucrative pre-release digital offer of around Rs 150 crores, betting on higher post-release returns. Box-office results fell flat. Bids dropped dramatically to just Rs 30 crores.
Irumudi towers, The Paradise has high stakes:
It's believed that even major Telugu production houses are having to abide by this kind of arrangement. Ravi Teja's Irumudi is gaining from the staggering box-office success (the film is a Rs 200-crore grosser). The Paradise too has a lot riding on how well it performs theatrically.
