The poor overseas performance of Peddi appears to have changed the way distributors are looking at big-budget Telugu films.
Until recently, major Telugu films were often sold overseas for huge outright prices. But after distributors reportedly suffered heavy losses on Peddi, buyers are now becoming far more cautious.
As a result, several upcoming big-ticket films are said to be moving away from outright overseas deals and opting instead for advance or commission-based release models.
Films such as The Paradise, Fauji, Dragon, Spirit and now Varanasi are being discussed largely under this model.
In an advance-based arrangement, distributors do not take the same kind of full financial risk as they would in a massive outright purchase. Instead, the producer and distributor share the risk depending on collections and agreed terms.
This is why reports claiming that the overseas rights of SS Rajamouli and Mahesh Babu’s Varanasi have been sold outright for around Rs 150 crore are difficult to believe.
There is no doubt that Varanasi is one of the most anticipated Indian films and carries huge expectations because of the Rajamouli-Mahesh Babu combination. But even a project of this scale cannot completely escape the current cautious mood in the overseas Telugu market.
The lesson from Peddi seems to be clear: overseas distributors are no longer ready to blindly pay massive amounts just because a film has a big star or director.
The new trend appears to be simple: big Telugu films may still get grand overseas releases, but buyers want to reduce their risk.
For now, advance-based and commission-based models seem to be the preferred route for major Telugu releases, including The Paradise, Fauji, Dragon, Spirit and Varanasi.
