He set up India’s first multiplex, most major production and distribution firms listed after he did - yet, the man who saw tomorrow is hardly elated at how things have turned out.
Walkwater Media, the firm he founded after selling Adlabs to Anil Ambani’s Reliance in 2005, is in the heart of the media and entertainment (M&E) district in Andheri, Mumbai. As we settle down over really large cups of tea, I wonder, what a man, who has been around for almost 30 years in the Indian film industry, does after cashing out with a reported Rs 360 crore, writes Vanita Kohli-Khandekar.
Shetty has always had a weakness for new things. In the eighties and the early nineties when films were made only for the “masses”, he financed an entire range of arty ones like Ardh Satya, Chakra, Hip Hip Hurray and Split Wide Open. He set up the first multiplex in Mumbai, the first IMAX, listed Adlabs (and hated it) and started the digital cinema revolution. But what is he doing now, I ask?
Shetty admits that he is working on one really big project, bigger perhaps than any of the other stuff he has done. He promises to share more, but not right now. So, even though I am dying of curiosity, I leave it at that, and instead take a sip of my tea.
What he doesn’t mind discussing is the smaller projects. He is funding a host of media start-ups — Scrabble (digital theatres), Framebox (animation and visual effects), iRock (edgy content creation) and Lumiere (world cinema). He has set up a TV production house and is producing a couple of films. He seed-funded Rajneeti, film reportedly based on Sonia Gandhi’s life, before UTV picked up the project.
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Shetty combines the skills that a newly corporatised Indian film industry needs desperately — vision, a feel for the technology of the business and an instinct for the creative part that is not harshly judgemental like that of most senior managers in a film firm. It makes him one of the few old media barons to straddle the world of old and new media successfully, I think, munching on a biscuit.
For a young man who started off in a small film-processing studio, there must be some satisfaction that so many of his ideas have taken off. Multiplexes are now a way of life in big and small towns alike. India is now counted among one of the world’s largest digital screen countries. And almost every major film production and distribution company listed after he did.
Strangely enough, Shetty does not seem enthusiastic as he sips his tea and contemplates the new film industry. He thinks that a structural anomaly is building up in the business. It is perhaps the reason a larger proportion of films have failed all through 2008 and 2009. He reckons that three things are causing trouble in the film industry.
The first and one he really holds forth on, is the failure of the industry to back new talent and its abject dependence on existing stars. It has raised the cost of making a film to crazy levels. That is because when stars raise their price, almost all the talent on a film project from the editor to the cinematographer starts demanding higher rates.
“There is too much money chasing very few projects,” says he. In one recent year, for instance, four large firms raised a total of Rs 2,000 crore to make films. Just spending 10 per cent of that on new talent (read actors) would have helped rejuvenate the business. Most of the money went into films that did not do well, even as the actors walked away with a lot of money as their fees.
That is not correct, I argue. A lot of the money also went in creative experiments which explains the variety now available, at least in Hindi cinema. Shetty doesn’t agree. Of the 100 “new” films released last year, how many had original scripts, he asks.
True, some of the most critically acclaimed ones were rip-offs of obscure French and other European films. Shetty funded Munnabhai MBBS and produced Gangajal and Dev among other films. He should know about original content, so I let that pass.
But what about multiplexes? Surely their success pleases him. His former firm Adlabs had set up Fame Adlabs, the first multiplex in Mumbai, way back in 2001. These multiple-screen theatres changed the nature of the business, plugging years of revenue leakages. Now, just over 1,000 multiplex screens bring in 55-60 per cent of the theatrical revenues for a film.
Ironically, Shetty reckons that the very success of multiplexes in their current form is causing the problem. This is when I leave my steaming hot cup of tea to listen.
There is, he says, a multiplex skew in the creative process. The reason a 3 Idiots works is that it is a pan-India or a family film. In the eighties, the “multiplex kind of films were few and far between — a Hrishikesh Mukherjee, a Gulzar or a Shyam Benegal made films that only a section of the audience watched. Now there are lots of niche films, but very few fare for the rest of India. This is weird because on the one hand, a lot of investment is going into multiplexes for small-town India, and on the other, there is a complete lack of content for these markets. “That is why Bhojpuri (cinema) is working,” he says.
Add to this the ticket pricing at Rs 150 and more. The “frequency of film-going has decreased even as prices have increased,” says Shetty. (He is right, ticket sales in India have fallen over the last three years). Multiplexes, he says, have become unreasonable. They actually incentivise piracy because they have priced tickets out of the reach of a huge mass of film-crazy audiences. When was the last time your driver or maid went for a film? (Mine usually watches a pirated version on her Chinese DVD player.)
Says the man who espoused the cause of multiplexes so hard, “Earlier, people didn’t go to films because the theatres were bad. Now there are no theatres for people who want to pay Rs 30-50 a ticket. There is a need for theatres with a 700-800 capacity at a Rs 30-50 price point. And this, not just for small-town India.” Is that then his next big idea? He doesn’t say anything, preferring to sip his tea — which has gone cold by now — instead.
And his third worry is the shifting of risk. Earlier, risk was shared between the producer, the distributor and the retailer (theatre-owner). So if a film bombed, they all ended up losing. Gradually, producers started getting into distribution and theatre-owners stopped giving minimum guarantees. Now most theatres work on a revenue-share basis and they happily remove a film that doesn’t work. So, if a Chance Pe Dance or a What’s Your Rashee? fails, only UTV (the production company) loses.
“What it should be (the right shape and the answers) I don’t know,” says he. But he does think that tracking popular television, which caters to a pan-Indian audience, could give some of the answers.
He points to the south. The films the south churns out, in spite of having loads of multiplexes, are still the same old family entertainers. So, their hit rate is higher. Is it because unlike the Hindi film industry, production in the south is still not controlled by companies? Shetty shrugs.
Does he miss Adlabs? “No! I feel very relieved, there is no stress, no quarterly results...”
It is almost two hours since we started talking and my tea has gone cold. It is time for me to move on to lunch.