Unless 3 Idiots, the Amir Khan-starrer, or Rocket Singh turns out to be a big hit, 2009 is going to end without a blockbuster from Bollywood. And from the looks of it, the flops this year will outnumber the hits by a wide margin.
It’s true that the dispute between exhibitors and distributors did result in releases getting bunched together and the IPL tournament once again kept audiences away from theatres. But the year hasn’t really seen a single memorable film yet, though Paa could change that. Producers who managed to sell their films must be a relieved lot; one of the biggest hits of the year, Love Aaj Kal, has seen Saif Ali Khan making a dream debut as producer. But the year will probably end on a sad note for most distributors, whether it’s an Eros or UTV Motion Pictures or Studio 18. Many of them picked up films, pre-recession, at very high costs and weren’t able to make much money if at all they did.
Studio 18, for instance, is believed to have picked up “Luck” for some Rs 38 crore but ended up with box office collections of Rs 18 crore. According to one estimate, a clutch of 19 big-budget films fetched box office collections of Rs 510 crore for five big production and distribution houses that either made or distributed them. The amount that these five companies are understood to have paid for these films was about Rs 537 crore. Of course, the producers will monetise the properties by exploiting other rights such as those for television or music. But theatrical sales still fetch the biggest chunk of revenues. Moreover, these numbers were collated till the first week of November and one of the most expensive films of the year, Kurban, reportedly made at a cost of Rs 60-65 crore, was released after that and all but failed at the box office. That means UTV’s distribution arm, which had acquired Kurban and also picked up Wake up Sid in a package deal for reportedly Rs 80 crore or slightly more from Dharma Productions, must have had a rough year.
Audiences are obviously not willing to suffer bad content which is why films like Aap ka Rashee or Main aur Mrs Khanna were out of the theatres before you could say Aladdin! What are the lessons to be learnt from 2009? Nothing new really: don’t pay large amounts for stars — look, what happened to Kurban and Billo Barber? Don’t pay obscene amounts to directors simply because they’ve delivered one hit. Look, what happened to Delhi 6? Keep the budgets as tight as possible, and here there’s something to be learned from the AB Corp management which stuck to its targeted budget of Rs 15 crore for Paa. It’s surprising that producers don’t want to risk new talent even though big stars don’t always deliver the goods. But it’s hard to see the trend changing in a hurry.
One reason why they continue to shoot at exotic locales, create lavish sets and hire top stars and directors is that there are distributors willing to pick up the tab. Until distributors stop acquiring these expensive films, producers have little reason to feel anxious that their films won’t sell. For their part, some of the foreign distributors have deep pockets and are willing to wait it out for four or five years to earn a return on their investments by exploiting the various rights.
So far the majors seem to be comfortable forking out big sums; while Fox Star Studios may have denied that it is coughing up Rs 100 crore for the new SRK film, it must have paid a fairly large sum nevertheless. What Fox is doing though is following a co-production model, rather than playing a role only in the distribution, which allows it to rein in costs and to be closely involved with the content. That’s probably the best way to go about things; simply picking up films on the basis of the star-cast won’t always work. KPMG had said earlier this year that the Hindi film industry might actually de-grow by about 5 per cent in 2009 over the Rs 10,700 crore posted in 2008. However, if December turns out to be a good month, industry revenues this year may match those of last year. But this kind of a performance is not good enough for the industry to attract investment, whether foreign or local.
Already the levels of risk are perceived to be high and are keeping foreign investors away from the filmed entertainment space. Even foreign studios like Fox and Warner, which are pursuing localised strategies, have to make sure they keep the content good and the costs low.
