As 2009 turns the corner, the Hindi film industry’s morale hinges on five mega releases. After a dull 12 months, will Lady Luck finally smile on a despairing industry?
It’s make-or-break time for the Hindi film industry and crystal-ball gazing has never been this scary.
The next five months will see the release of five mega films, and virtually riding on their success is the morale of the industry itself. So will it be a high-five? Or will the sinking morale of an industry that has witnessed flop after flop, not to mention the drought during the multiplex producer impasse, sink even lower?
Yes, when we ring out the old and look to the year ahead, we’ll analyse what went wrong in 2009. Not to mention tallying box office collections that have been dismal for the most part.
But let’s not cry over spilt milk and let’s look to the new year with expectation. Take a brief look at each film – a new release every month – that carries the hope of a buoyant and profitable 2009.
The Big Five
Hopefully opening a new innings is next week’s big release, Rajkumar Hirani’s 3 Idiots. This will be followed by Anil Sharma’s Veer, Karan Johar’s My Name Is Khan, Anurag Basu’s Kites and Prakash Jha’s Rajneeti. What makes these films hatke is their content and the fact that the actors slip into roles that are far from conventional.
Hirani’s back with another comic caper, 3 Idiots. In 2001, leading man Aamir Khan gave us a full-on comedy, Dil Chahta Hai. Though the movie has since been called a cult film by reviewers, it wasn’t a Ghajini or a Lagaan or for that matter a Taare Zameen Par at the box office.
Anil Sharma is back with an epic love story, Veer, after two duds, back-to-back: Hero – Love Story of A Spy and Ab Tumhare Hawale Watan Saathiyon. When actor Salman Khan tried turning back the pages of history in Suryavanshi, we all know what happened. And Veer is no Partner or Wanted, where he played roles he is supremely comfortable in.
Karan Johar is known for making films that are, well, Joharish – larger than life. In fact, he’s one director whose films actually sell the kind of dreams people want to live. This time, the maverick filmmaker has toyed with a human story, something you can relate to. For King Khan, My Name Is Khan is no dard-e-disco of Om Shanti Om or a Chak De! India.
After making movies you can identify with, Anurag Basu’s latest, Kites, is an unabashed commercial venture. In fact, do some quick math and you realise that the budget of Kites is more than all his previous films – Saaya, Murder, Tumsa Nahin Dekha, Gangster and Life in a… Metro – put together! As for leading man Hrithik Roshan, well, minus the Krrish mask and with no vroom vroom as in Dhoom 2, you need to keep your fingers crossed.
Ditto for Prakash Jha, who’s also made his most expensive film ever with Rajneeti. Known for his penchant for the political scenario of Bihar, Jha has gone the whole hog and taken on politics on the national stage.
An ensemble cast, yes, but what makes this project hot is the new avatars donned by Katrina Kaif (a la Sonia Gandhi, as the source insists) and Ranbir Kapoor. This is certainly an Ajab Politics Ki Ghazab Kahani and not Prem’s!
Turning Point
So there you have it. More than Rs 400 crore at stake and the confidence of film producers to boot. With ‘cost-cutting’ being the ‘in’ thing in tinsel town, will projects themselves take the fall, if these films fail to live up to expectations?
Utpal Acharya, Vice-President, Programming and Distribution, INOX Leisure, feels these films may generate business at the box office but he wonders if producers will turn a profit from these expensive projects.
“There’s around Rs 400 crore riding on these films and the industry hopes to earn at least 20 per cent on their investments. If these films bomb, at least Rs 500 crore will be at stake. The last quarter of this year and the first quarter of the next will be very crucial for the film industry and it is very important that these films do well,” he says.
Acharya knows the industry cannot afford to make any mistakes at this crucial juncture. However, the demand for these films is huge and exhibitors are hopeful of a great opening for each one of them with good collections at the first weekend.
Shyam Shroff looks to the future: “What if all five become major box office hits? How many more movies will be launched? How many more multiplexes will be built? How many more jobs will be created?”
Insiders say this is a critical time for the industry. This year, it’s producers, not the corporate houses, who have made money from the movies. Many corporates such as BIG Pictures, UTV and Eros had announced big projects and they are anxious to see how these five films fare before they make any more announcements.
Rewinding to the ‘corporatisation’ of the industry, an insider says most of the big acquisitions started at the end of 2009, when films were being acquired for Rs 60–70 crore. Most of these films released in 2009 and did not generate good business. As for profitability, neither, producers nor distributors nor exhibitors made money.
However, corporate houses suffered a double whammy. They incurred additional operational costs as they set up distribution offices in various centres. There were additional expenditures like acquisition costs and massive overheads, which further scaled up their balance sheets.
Market then and now
“Last year, when the market was positive, films fetched a high price through satellite rights, digital downloads, music etc. Ancillary revenue platforms were quite robust. Film companies could look beyond theatrical revenue to get more business. This year, the bubble burst and most films have not managed to recover costs beyond theatrical revenue,” the insider points out.
According to a veteran producer, every business model looks similar these days. “There are no business secrets. Everyone ended up engaging in the same marketing techniques, even similar marketing spends. Producers need to re-look at business models and not acquire films blindly. Producers need to value their projects,” he points out.
“In India, almost 60 per cent of business is in the organised sector. One should leverage this reality. Production houses need to evaluate films on merit and casting. They should not spend wantonly. Simply buying a Hrithik (Roshan) or a Salman (Khan) film is not enough. Production houses need to also keep their P&L (Profit and Loss) accounts in check,” he adds further.
Quiz Mahendra Soni, who apart from running a distribution firm, Venkatesh 2000 in West Bengal, is also involved with film production as well as exhibition, and he replies, “Production houses need to create long-term value for their films. Producers need to create and protect their IPR (Intellectual Property Rights). Studio 18, for instance, bought the rights for Ghajini for almost seven years. It is important to have the IPR for perpetuity so that companies can monetise on their films for a longer period.”
Delving deeper into lessons learnt, Soni adds, “All the films in a producer’s library sustain the functional costs for a long time. Nowadays, since producers sell their music rights for perpetuity to another company, satellite rights are also sold for seven to nine years and very little business is generated by home video rights. So even if few films work, how much will producers earn in the long term?”
Even if films like Kites and Rajneeti manage to garner record-breaking business, production houses are left with very little money, says Soni, whose firm has been releasing Star Fox movies in Bengal and soon, My Name Is Khan. Ask him what he expects from the film and he says, “My Name Is Khan is expected to fetch Rs 4.5 crore from the East, The best so far.”
With expectations sky high, Naaz Building, the hub of Hindi film traders (in Mumbai), is eagerly looking forward to the big roll-out. But not without apprehension. Asked which film he’s putting his money on, one trader who’s been in the business for three decades, says, “My Name Is Khan and Veer are the hottest”. “The trailer of Veer is terrific and everyone in Naaz is expecting a good opening. This film will either be a Mughal-e-Azam or a Razia Sultan,” he says.
CONTENT MATTERS
On the other mega projects, he says since Rajneeti deals with a political subject, the opening won’t be mind-blowing. “But going by Jha’s track-record and the cast, if the content is strong, the returns will be good. As for 3 Idiots, everyone in Naaz is sure that in the cities and multiplexes, this film will re-write history as far as business is concerned.”
Though everyone has their money on Hrithik Roshan’s performance, there are concerns about the release date of Kites. “It should have been released by now but everyone is clueless about its release date. The producers need to be sure before we comment on it,” says a source from Naaz.
Everyone’s keeping their fingers crossed. A leading distributor in the South, Dilip Tandon, minces no words. “If these films do not perform well at the box office, the trade is finished.”
According to him, the biggies have found it difficult to secure appropriate release space. “The backlog this year saw cramped weekends and more than two releases on important weekends,” he elaborates.
About the Big Five, Tandon says, “While we expect 3 Idiots to generate at least Rs 3 crore in the Nizam circuit, Veer, which will also release in Telugu, should fetch at least Rs 2.5 crore from Nizam. It’s a little early to talk about My Name Is Khan because Fox Star Studios is now focusing on Avatar. Kites and Rajneeti are also big films but distributors expect a reasonable deal.”
But what does the future hold after the Big Five? Post-recession, people have been careful about embarking on big-budget projects. Notice the absence of major announcements for next year. “But still, some films will be worth looking forward to. For instance, Ashtavinayak will be producing Akshay Kumar’s next film Khatta Meetha. UTV has also signed up Akshay Kumar for Priyadarshan’s next after De Dana Dan,” Acharya says.
Aman Gill, Head of Distribution with Studio 18 remarks, “There are a host of other big-budget films like Action Replay, Chance Pe Dance and House Full, where producers have invested huge sums. Producers create the content so they have every right to ask for more money for their products. It’s the same with distributors. Both producers and distributors can negotiate.”
Magic Ho!!!
Veteran exhibitor and owner of E-Square, Pune, Hemant Panchamiya believes in surprises. “It is hard to say how the five big films will perform at the ticket counter. The box office threw up ‘surprise’ hits like Wanted and Ajab Prem Ki Ghazab Kahani this year. Then there were films like Chandni Chowk To China, Tasveer and the recent Rocket Singh that did not do well though is was backed by a famous production house.” Point taken.
Panchamiya has his own grievances on behalf of multiplexwallahs. He says that despite the multiplex-producer impasse this year, it is exhibitors who are still being held to ransom.
“Multiplex owners will be hardest hit if these films do not do well. Also, since most of these movies entail astronomical production costs, it will be difficult for producers to break even. Distributors have put a high price tag on these films and this will not be viable for multiplexes,” Panchamiya remarks.
Rajesh Thadani, Proprietor, Multimedia Combines, predicts a price correction if the Big Five are a let-down, not to forget dipping confidence levels in large production houses.
“In that case, forthcoming films from these production houses will find few buyers or the prices that will demand. The opening occupancy rates for these films could be as high as 90 per cent but only the content will decide whether they are able to sustain themselves beyond a week,” he says.