In qualitative terms, the B circuit is the ‘final frontier’ of the film industry – beyond this there is no market. Films reach this segment after their run in the more profitable distribution and exhibition circuit is fully, truly over, after they have literally been run to the ground. So what we get here is the local industry’s equivalent of what the Indian market is to the Hong Kong film industry (‘just a bonus’). Typically the B circuit distributor acquires either cheap new films (including Telugu versions of non-Telugu films) or reruns.
In geographical terms the B distributor is generally confined to territories consisting primarily of non-metropolitan centres. Most cinema halls available to such distributors are run down and have low ticket prices (around ten rupees for the highest seats). The margins are so low that it is not economically viable for major players to operate at this level. I will confine my discussion here to those distributors and exhibitors that are relevant to the circulation of Hong Kong films.
The beginnings of the B circuit in Andhra Pradesh lie in an interesting moment -- both of regression from and resistance to industrialization in the 1980s. The sharp increase in production costs and escalating risk had, between the late 1970s and early 1980s, led to the withdrawal or scaling down of several established distribution companies which, until then, had enjoyed state-wide distribution networks. An additional factor, the new entertainment tax regime from the mid-1980s, which imposed a flat tax on films regardless of the actual number of tickets sold, had only added to the risks involved. Among the companies that cut down or transformed their operations was the Poorna Pictures Private Limited.
At this time, the pre-sale of films was founded on the high valuation of the economic worth of some major stars – something that was in itself a consequence of, and measured by, the impressive growth of fans’ associations. A range of smaller new investors entered the distribution business, seeking to capitalise on the success of select star vehicles. This resulted in the fragmentation of distribution territories into smaller units, as producers sought to sell films at relatively high cost to minor players bidding for single territories. Over the next decade, the number of territories grew from three or five to ten. It made eminent sense to the smaller distributors, increasingly referred to as ‘buyers’, to offset their risk by finding even smaller distributors, or sub-distributors, who bought rights for a part of the territory. Some sub-distributors even bought rights for a single town. A range of investors entered the film industry as sub-distributors. There was a high rate of attrition here but sub-distributors did succeed in pumping large amounts of money into the film industry, leading to an increase in film production.
The industry proceeded under the assumption that the huge popularity of film stars, indexed by the growth in fans’ associations, was adequate for ensuring the success of films. By the mid-1990s there was a full-fledged crisis in the industry with all major stars failing repeatedly at the box-office. The 1980s and early 90s provide evidence that the industry did not always manage to translate star popularity into profit, at least not in a manner that yielded any long-term capitalization of resources. Instead star casting became the means by which the risk of future losses was passed on to the now fragmented distribution sector. While small distributors did exist before the 1980s, this decade saw rise of hundreds of new distribution offices, most with a ‘library’ of under 10-20 films, many of whom have subsequently closed down.