The film industry has a good 2011 as it harnesses long weekends and festivals.
On Diwali day, start at Mannat, Shah Rukh Khan’s house in Bandra. Travel through the heart of the Indian film business in north Mumbai, right up to Film City. The chances are all you will hear is a deafening silence. It is the sound of an industry waiting with bated breath for the first word-of-mouth reports on Ra.One.
The Rs 160 crore magnum opus, produced by Khan, starring him and promoted ad nauseum by him, is one of the most expensive Indian films ever made. It is being released on Diwali in a film-crazy country that blows up a lot of money and has fun that week. The combination — SRK, festival and mood — is deadly. Ra.One is destined to do well. Given its budget, how much profit it makes may be a question mark. This however is not about Ra.One.
| Multiplexes jack up Ra.One ticket prices |
Ra.One simply emphasises the one big truth about the economics of the film business. It is about timing, timing and timing. No one, not even SRK wants to risk a non-festive release. The Indian film industry now has the ability to harness festival releases with the studio-oiled marketing machinery. It explains, at least in part, why after two really miserable years, the Rs 14,000 crore crore film industry has had a great time so far in 2011 (see table: Bumper Bollywood).
Of the top 15 biggest hits, more than half were released on festival or holiday weekends. This is way higher than the proportion even three years back, say analysts.
You could ask in this age of studios and planned productions, why are festivals so important? Why aren’t we able to pace our releases better?
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Siddharth Roy Kapur, CEO, UTV Motion Pictures, one of the largest studios in India, points out that festivals have always been a great time to release films.
"Purse strings are loosened around that time," says he. Also, you could combine, say, Diwali or Eid with a long weekend to get the best of the first weekend, the most critical period in a film's release window. It is the same logic that drives some of the biggest Hollywood releases to cluster around Thanksgiving, July 4 or Christmas. Avatar, for instance, released on December 18, 2009 bang in the middle of the Christmas season in the US and Europe.
| BUMPER BOLLYWOOD All figures in Rs crore | |
| Bodyguard Cost: 60 NBO: 142 Release day: Eid | Yamla Pagla Deewana Cost: 25 NBO: 55 Release day: Lohri |
| Ready Cost: 45 NBO: 120 Release day: NF | Delhi Belly Cost: 25 NBO: 54 Release day: NF |
| Golmaal 3 Cost: 35 NBO: 108 Release day: Diwali | Mankatha (Tamil) Cost: 24 TR: 50 Release day: Eid and Puja |
| Singham Cost: 45 NBO: 100 Release day: NF | Ko (Tamil) Cost: 14 TR: 25 Release day: Good Friday |
| Zindagi Na Milegi Dobara Cost: 65 NBO: 90 Release day: NF | Siruthai (Tamil) Cost: 13 TR: 22 Release day: Pongal |
| Kanchana (Tamil) Cost: 9 TR: 18 Release day: Independence Day | |
| Cost includes print and publicity costs; NBO is net box-office collection, or ticket money collected minus the entertainment tax, but including distributor’s share; TR is total revenue, or income from box office plus overseas, satellite, download, music and other rights; NF means not on a festival date; Source: Koimoi.com (Hindi films) and Sreedhar Pillai (Tamil films) | |
"Traditionally, a festival release gets 10 per cent more audiences," says Sreedhar Pillai, a Chennai-based trade analyst. It is also the time that everyone is equal in the film business. "There is usually an unsaid understanding that no two big films will release on the same day. The only exception is a festival. No rules apply," says Allu Sirish, marketing director, Geetha Arts, a Hyderabad-based production house. The company has produced, among other films, Ghajini.
Sunaman Sood, director, Acendo Capital, a boutique media advisory firm, points out that the risks in film-making are getting bigger and bigger as costs go through the roof. And, festivals are the safest release window in this high-cost, creatively risky game.
Here is the math. The average film budget is now closer to Rs 20 crore, more than double the average even three years back. This is because of a rise in talent and marketing costs, even while distribution costs have fallen thanks to digital cinema taking off. But, there are fewer festivals and more films. About 1,100 films are made and released in India in an average year. There are only 52 weeks in a year and many of them are a total no-no for film releases. There is exam time, shradh, cricket matches and now there is a full eight weeks lost to the IPL. There are hardly any windows of opportunity left for a film to release. So, studios and filmmakers are finding new windows. Aamir Khan found a sweet spot in Christmas releases with Ghajini and 3 Idiots. The Eid and Pooja weekend became the window of choice in a Pongal-dominated Chennai for this year's Tamil mega hit Mankatha. "Even the Friday after IPL has become a festival Friday," laughs Komal Nahta, editor Film Information and Koimoi.com. Then there is the new year. None of these were there on calendars earlier.
Not everyone agrees that our ability to harness festivals has got better. "In Hollywood, an event film is planned not less than two years in advance," says Vikram Malhotra, COO, Viacom18 Motion Pictures. So, for instance, if a Harry Potter release is due in Christmas 2012, the style guide, marketing and therefore monetisation plan is out in December 2010. The consumer product licensing teams and other revenue teams actually sit with the script of Harry Potter two years before the film's release. This ensures that all the potential of the film is juiced.
"We just identify the opportunity of a festival and then rush towards it. We are still some distance from timing these well and planning them," says Malhotra. Maybe. But, a mix of well-timed releases and an industry that seems to be making the right creative calls has meant that "this has been a very successful year", says Nahta. Roy-Kapur agrees, "It has really been a good year. Diverse movies are doing well from Delhi Belly to No One Killed Jessica and Bodyguard".
The mix of edgy multiplex films with popular single-screen ones is falling in place, at least for Hindi cinema. Pillai points to a similar trend in Tamil Nadu.
Nahta estimates that 18-20 per cent of the total releases make money. That average holds for 2011. What has changed is the profitability of the hits, which has improved substantially. Tanu Weds Manu, for instance, has made 100 per cent profit on box office revenues alone. It will make another huge chunk on other revenues — DTH, satellite, overseas, music, downloads and so on.
Some day soon, the world's largest film industry could also aspire to be the world's most profitable.