Show business is feeling the pinch. Big buyers are not coming forward to pick up marquee helmed produced, directed or starred titles. The gloom has set in because two or three biggies have turned turkey at the box office this year. The euphoria of December 2008 has dissipated very quickly, leading to a sense of emptiness, maybe even edginess in B-Town.
Billu ‘Barber’ and ‘Delhi 6’s fate at the BO has convinced all and sundry that the triumphant aftertaste of ‘Rab Ne Bana Di Jodi’ and ‘Ghajini’ is well and truly over. Between the two, they did billings of Rs 320 crore in December. They were followed in early January by Warner Bros’ big ticket ‘Chandini Chowk to China’, which bombed on the opening weekend. It hasn’t been the same since. So, how does the mechanics of B-Town work? And why is there a squeeze now? To understand this, I spoke to several insiders and most of what I learnt was illuminating to say the least.
The entire ball of wax – the composite Indian film industry – was valued at approximately Rs 8,600 crore or thereabouts last year. These are gross billings, including tax which the customer forks out at the box office. Of this, the Hindi film industry is ballpark Rs 3,400 crore or 40 per cent. More importantly, the net size of the domestic industry (post tax) is about Rs 1,500 crore annually. This has grown substantially over the last three years or so – 16-17 per cent in 2007-08, 14-15 per cent in 2008-09 and is expected to taper off to a compounded annual growth rate of 8-9 per cent this year. Slowdown? Yes, very much so. For three legs of the movie stool are bleeding – satellite rights, VCD/DVD/Home Video and music rights. The way it works is that theatrical release contributes 45 per cent of the takings, overseas almost 20 per cent, satellite rights 15 per cent, DVD/VCD 12 per cent and music 8 per cent.
The bulk is still doing soundly – theatrical release and overseas, which is showing strong traction, but the wheels have come off the bus for the other three legs. Satellite, because the channels are floundering and hence don’t have the big bucks to pay, while piracy has acutely depressed the DVD/Home Video and music rights market. Even the theatrical release market has undergone a rapid metamorphosis over the years with the emergence of multiplexes. Thirty per cent of all billings come from Greater Mumbai and Greater Delhi markets. Eighty per cent of all revenues come from the top 30 cities. If you want greater granuality, then 20 per cent of that universe comes from six premier cities beyond Greater Mumbai and the NCR – Nagpur, Kanpur, Jaipur, Ahmedabad, Bangalore and Hyderabad.
If 50 per cent of the 80 per cent comes from eight centres essentially, the balance 22 cities make up for the balance 30 per cent in the equation. That is why when a ‘Ghajini’ or a ‘Dhoom 2’ are considered monster hits, the business comes from these towns and cities. The opening weekend collections, a hitherto unknown concept in the past, is now a determinant because of the multiplex hue and skew to this mathematical equation. ‘Ghajini’ is reportedly the biggest hit of all time, adjusting for inflation, a sum total of close to Rs 250 crore. Bigger than ‘Sholay’ and ‘DDLJ’.
Now let us take a gander at the Hindi film industry output in greater depth. Of the 250 odd films that are produced annually, the key lies in the 50 or so A-grade movies. These are the films with big star casts or under big banners with known directors, etc. Then you have the 50 or so B-grade films, which have a 20 per cent success ratio. Of these 250, as many as 50 are regional films dubbed in Hindi. The 50 A-list movies are the ones that rake in the big bucks. If Karan Johar’s Dharma Productions is unhappy with Yash Raj Films over distribution deals, then it is also because Yash Raj itself has taken a hit in recent times. Last year, only ‘Rab Ne…’ clicked, while the previous year, only ‘Chak De’ saved the day for them. Movies are now bought and sold for large amounts of money. To give you an example, Indian Film Co, owned by Raghav Bahl, bought ‘Ghajini’s domestic rights for Rs 90 crore, while the overseas rights were purchased by Reliance Big Entertainment for Rs 10 crore. Both made money in spades. But that is not necessarily true for say a UTV, which paid a lot of money for ‘Delhi 6’, or Warner Bros, which produced ‘Chandini Chowk…’ along with Ramesh Sippy. Indian Film Co incidentally also distributed two other blockbuster hits last year – ‘Golmal Returns’ and ‘Singh is King’.
Now, with cash flows crippled and the fund tap drying out, movies are stuck on the conveyor belt for no one is willing to pay the asking price. The old adage of buyer’s market and a seller’s market is very much in operation. Big’s ‘Luck By Chance’ is another flick which failed miserably this year as did ‘Victory’. However, Vishesh Films’ ‘Raaz’ managed to keep itself afloat. Coming up this year are many A listers – Ravi Chopra’s ‘Banda Yeh Bindaas Hai’, UTV’s ‘Mr aur Mrs Khanna’, Vipul Shah’s ‘London Dreams’, Big’s ‘Paathshala’, Vidhu Vinod Chopra’s ‘Three Idiots’ at the fag end of the year; Diwali release also from Big – Rakesh Roshan’s ‘Kites’; impending release – Vishal Bhardawaj’s ‘Kaminay’, Tips’ ‘Ajab Prem Ki Ghajab Kahani’, Karan Johar’s ‘Wake Up Sid’, another impending release, Yash Raj’s ‘New York’, Sajid Nadiadwala’s Akshay Kumar-starrer ‘Kambakht Ishq’, another soon-to-be-released Eros International’s ‘Aa Dekhen Zara’, UTV’s ‘What is Your Rashee’, Madhur Bhandarkar’s ‘Jail’, Aamir Khan’s ‘Delhi Belly’, Karan Johar’s SRK-starrer ‘My Name is Khan’, Eros’ ‘Alladin’, another Karan Johar film ‘Jehaad’, Saif Ali Khan’s first home production helmed by Imtiaz Ali, and Shree Ashtavinayak’s ‘Blue’, and many more.
Prima facie, several of these films appear to be promising. Some have the necessary ingredients – big banners, big helmsmen, big stars – but their fate will only be known at the BO once they are released. Circa 2009 is in dire need of a hit. Only the sleeper ‘DevD’ has clicked big time this year, along with ‘Raaz’. Last year during the IPL, ‘Jannat’ set against a cricket backdrop worked. This year is complicated – elections and the IPL overlapping. The economic meltdown all pervasive. The only reason why the Hindi film industry is still keeping its head above water in 2009 is the overseas market, which has grown by leaps and bounds over time. Connecting with the diaspora, ‘Delhi 6’ has done well abroad, even if it has failed abysmally at home.
Overseas now is worth as much as $125 million or Rs 650 crore net of tax and this, coupled with the domestic net billings of Rs 1,500 crore, make up the size of the Hindi film industry. As much as Rs 2,000 crore post tax. Industry insiders reckon that if the going remains robust, then by 2010-11, it should be worth Rs 3,000 crore. For that, satellite rights hit by a severe liquidity crunch and DVD/VCD and music rights torpedoed by piracy have to revive. Of course, the multiplexes at home and abroad have to be full to the rafters.
Only then will a beleaguered industry be able to raise its hand and be counted again. Till then, it needs a booster dose of another ‘Ghajini’.
(All the figures rounded off are sourced from industry)
(Sandeep Bamzai is a well-known journalist who started his career with The Statesman in Kolkata in 1984. He has held senior editorial positions in some of the biggest media houses in three different cities - Kolkata, Mumbai and New Delhi - with The Indian Express, Illustrated Weekly, Sunday Observer, Dalal Street Journal, Plus Channel where he ran India's first morning business show on Doordarshan, The Times of India Group, Business India, Hindustan Times and Reliance Big Entertainment. Starting his career as a cricket writer, he graduated to becoming a man for all seasons under Pritish Nandy, who he considers as the premier influence on his career. Since he studied economics at Calcutta University, Bamzai decided in 1993 to branch out into business and financial journalism. Familiar with all three media, he is the author of three different books on cricket and Kashmir. The views expressed here are of the writer’s and not necessarily those of the editors and publisher of exchange4media.com.)