Its not just startups, even Bollywood is facing a funds crunch!!

Published by Gaurav Gupte on

Balaji Motion Pictures has decided to merge its movie production business with Balaji Telefilms due to the financial difficulties that it was facing. They suffered heavy losses after movies like Azhar, Kya super cool hai hum 3 and Great Grand Masti which tanked at the box office. Their latest release, Tiger Shroff starrer Flying Jatt is also believed to be in the dumps. The only movie sanctioned by Balaji in a long while is Half Girlfriend. The only good news that they had in 2016 was the success of Udta Punjab, but it was co-produced with Phantom Films and an online leak just before the movie’s release resulted in a revenue loss. Their main focus from now on will be mainly on movie distribution and not production.
UTV Motion Pictures which has produced hit movies like Lakshya, Swades, Rang De Bansanti, etc has announced that it will stop operations of its Hindi movie production business. This was a decision taken by Disney India, which owns UTV Motion Pictures. It has had a rough year with back to back flops like Phantom, Katti-Batti, Tamasha, Fitoor and the recent mega flop – Mohenja Daro
If industry analysts are to be believed, none of the major Indian studios are doing good business are under tremendous financial strain. There have been many rumors of big production houses rethinking their pending movies. Many big banners like PVR, Percept Pictures Company & Sahara One have shut shop in the last 2 decades, but UTV is the biggest name of them all.
The story is no different for Fox Star Studios after movies like Shaandar, Bombay Velvet and Hamari Adhuri Kahaani which did not perform well at the box office. The silver lining to these dark clouds has been Sonam Kapoor starrer Neerja which was a huge success.
Corporate studios who started about 2 decades ago were supposed to bring in professionalism, standard processes, and financial transparency and end the shadow of the underworld on the industry. Unfortunately, most of these studios are headed by executives who have little or no experience in movie production. The biggest concern as per an industry insider is that they only look at the actors’ star value and at the Director’s reputation. They skip the most important part, the script reading sessions! What this insider fails to understand is how these MBAs make profit projections without knowing the script of the movie. That is like guessing the taste your food without knowing the ingredients in it.
This point was backed by renowned filmmaker and director, Anurag Kashyap, who said that actors like Shahrukh Khan, Salman Khan, Amitabh Bacchan and Akshay Kumar are responsible for the downfall of the industry. He says that these 4 have been listed in the Forbes highest paid actors, but their movies are actually not performing as well as other actors who charge less than them and are still on the Forbes highest paid actors list. What he claims is that the movies which these Bollywood stars make earn a maximum of 300 crores/ $ 50 million, but Hollywood movies which star actors who are paid less than or equal to these 4 stars actually earn hundreds of millions or a few billion dollars. Clearly, the return on investment is much lower from these 4 stars.
The sad part about this was that when a star asks for a certain amount, the studios or the producers agree to it!! So why should anyone say no to money that they are getting easier. The lack of business sense is what is baffling!!!
The management, in this case, is seen to be lacking a passion and creativity to understand the audiences and the industry.
Movies like Fitoor and Bombay Velvet were budgeted at Rs 80 crores & Rs 84 crores respectively. No analyst can understand the reasons for the sky-high budgets for these movies and the studios were destined to lose money from the time they budgeted this amount. This happens as studios budget on the basis of profit projections.
Movies make money before they release by selling their TV rights to channels. The final price that a TV pays will depend on how a movie performs at the box office. If a movie bombs at the box office, the price can come down by 50%. These right are usually sold by the original movie producers and if a movie is a big hit, the studio gets a very small percentage of it.
Another challenge that the studios face is a reduction in movie theatre collections. This year witnessed a drop in about 7% of theatre collections. A thorough introspection by studios is long overdue.
Amidst all this, there is a good news for aspiring actors. Ace fashion photographer Atul Kasbekar teaming up with former CEO of Balaji Motion Pictures Tanuj Gar to start their own movie production company. 

Categories: Media


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