Star fee set for correction as OTTs rationalize spends

livemint.com:

New Delhi: Fees of big actors, which had taken a jump after streaming platforms started buying films for huge amounts, are now correcting as the platforms turn conservative on the films they purchase. “There is a more cautious and tailored uptake of content by trade (streaming platforms), in light of which everyone in the value chain, be it actors or crew, need to recalibrate and realign with market forces and realities," said movie producer Tanuj Garg, who is managing partner at Ellipsis Entertainment.

Top stars had increased their fee by 20-30% after the first wave of covid when OTT buying was at its peak. While some of this rationalized as sales fell, a backend model is now coming into play, where studios like Yash Raj Films are are increasingly asking lead stars to take a share of profits instead of a fat fee.

While senior names like Shah Rukh, Salman Khan, Ajay Devgn and Akshay Kumar have agreed, the younger lot of actors such as Vicky Kaushal and Shahid Kapoor are yet to consider a share in profits, and signing fewer projects as they remain wary of such strategies, trade experts said. “For all producers, there is a realization that the film has to work at the box office and while it is important to be comfortable with digital, music and other revenues, there is now lower dependence on these," Shariq Patel, chief business officer at Zee Studios said.

“The cushion from such ancillary streams is becoming thinner, which means ATL (above the line) costs will have to rationalize and everyone should be ready to ride the risk." Star fee is a conversation that’s perpetually work in progress, Patel said, but there definitely are actors who have begun to smartly accept a portion of the backend. To be sure, the correction