Work-for-hire or IP share: a Guwahati studio's Friday decision
Riverline Media is a five-person studio in Guwahati with ₹4.5 lakh in the bank and fixed costs of ₹85,000 a month. In one week it receives two offers. Offer A is a state tourism department work-for-hire: a 12-minute promotional film for ₹11 lakh, six weeks, 40% advance and 60% on delivery after departmental approval, with all raw footage and rights transferred. It needs a rented gimbal at ₹18,000 a week for four weeks and a freelance camera assistant at ₹22,000 a month. Offer B is a co-production with a first-time director on a 22-minute Assamese short: a grant pays ₹3 lakh cash upfront, the studio contributes ₹1.5 lakh in kind (edit suite and sound), the studio takes 40% of revenue, and the plan is festival submission with no distributor and no timeline. Neither offer can be run by the current five people alone, and the owner must answer both by Friday.
1. Map the cash position of each offer over the next six months and identify which option the studio can actually survive. Show your arithmetic, including the worst realistic case for Offer A.
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Start with the fixed cost line, because it is the only number that is certain: ₹85,000 × 6 = ₹5.10 lakh of survival cost whatever the studio does.
Offer A. Cash in: ₹4.40 lakh (40% advance) in week 1, ₹6.60 lakh only after delivery and departmental approval. Direct costs: gimbal 4 × ₹18,000 = ₹72,000 plus the assistant at roughly 1.5 months × ₹22,000 = ₹33,000, so about ₹1.05 lakh. In the best case the balance lands in month 2 and the bank peaks near ₹9 lakh. In the worst realistic case, approval plus treasury release takes 90 days, so payment lands in month 5. The trough is end of month 4: 4.50 + 4.40 − 3.40 (fixed) − 1.05 (direct) = ₹4.45 lakh. The studio never goes below its starting balance. Net contribution is about ₹9.95 lakh over five months, roughly ₹2 lakh a month against an ₹85,000 fixed line.
Offer B. Cash in ₹3.00 lakh, no cash outlay because the ₹1.50 lakh is in kind. But six months of fixed costs still run: 4.50 + 3.00 − 5.10 = ₹2.40 lakh, with no revenue event until a festival selector makes a decision 12–18 months away.
So B does not kill the studio, but it leaves zero cushion and no capacity. A's risk is concentrated in one signature that the studio does not control; B's risk is diffuse and long. On cash alone, A is the surviving choice - and it is the one that can fund B later.
2. Which single term in Offer A would you fight hardest to change, and what is the business consequence if you lose that negotiation?
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The term to fight is not the fee; it is '60% on delivery after departmental approval' - an open-ended condition with no deemed-approval date attached. As written, the department can hold ₹6.60 lakh indefinitely on a subjective judgement, and the studio has already spent the gimbal and assistant money by then.
The replacement to ask for: 40% advance, a 30% payment on first rough-cut screening, the final 30% on delivery with a deemed-approval clause (silence for 15 working days equals approval), and no more than 10% retention for any stated corrections.
The second term worth trading against is rights. Full transfer of raw footage plus all rights is normal for government work, but ask for a narrow licence-back: 30 seconds of the finished film and selected raw shots for the studio's own showreel and website.
If both are refused, the consequence is concrete: the studio is lending ₹6.60 lakh of working capital to a client for free, it cannot fund the co-production even if it wants to, and it finishes the year with no reel it is allowed to show. For a five-person studio whose next three contracts will be won on a showreel, that last loss is the expensive one, not the interest on the delay.
3. The tourism officer now says the film must be delivered in four weeks, not six. The scope stays at 12 minutes. What do you do, and what is the reasoning behind your answer?
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Work backwards from the deadline to find where the time actually goes: script and location lock by day 3, five shoot days, three days assembly, five days edit and review, five days for the department's approval chain. That adds to roughly 21 working days - so the studio's own portion can be compressed by about 40%, but the client's approval portion cannot be compressed by the studio at all.
That produces three honest options, and the recommendation is the first:
- Accept at a price, with the calendar written into the contract. Add a 20% rush fee (about ₹2.2 lakh) because the assistant and gimbal are now a fixed cost over a shorter, denser window, and the risk of a 90-day approval is unchanged. Attach a review schedule with named approvers and the deemed-approval clause.
- Trade scope for time. Keep four weeks but reduce to a 7-minute master plus three 30-second cutdowns, or drop the second location. A shorter film shot well is worth more to the department than a rushed 12 minutes.
- Decline. Legitimate if the studio cannot hire the assistant in time.
What must not happen is the fourth option that studios actually take: accepting four weeks at the original fee, absorbing the overtime, and discovering at day 28 that the delay was never in the edit but in a signature.