Will Asin Thottumkal (Ghajini) and Genelia D?souza (Jaane Tu? Ya Jaane Na) be able to cast their spell on the Star Screen jury? Or will the Best Actor (female) award be a toss-up between veterans Kajol (U Me Aur Hum) and Priyanka Chopra (Fashion)?
In the run-up to the 15th Star Screen Awards, slated for January 14, 2009, The Financial Express looks at Bollywood in a three-part series flagged off on January 10. In the first part we examined the effects of the economic slowdown on the Hindi film industry. Today, we look at Bollywood?s journey towards corporatisation.
This year at least three big-budget Bollywood films, Singh is Kinng, Rab Ne Bana Di Jodi and Ghajini, saw a wide release with 1,000-plus prints, a trend similar to Hollywood films. What?s more, producers Vipul Shah, Yash Raj Films and Madhu Mantena put in place a mirror marketing plan to create that demand. For example, according to insiders, producers spent as much as Rs 8-15 crore on marketing Ghajini. The returns have been good, with all three collecting Rs 500 crore and counting at the box office.
With corporatisation finally producing results, the whole function of financing is getting streamlined, leading to a sea change in the way films are packaged, marketed and distributed. ?There are various areas much more streamlined now. With several production houses opting for the studio model, we are producing, distributing and marketing the film,? says Siddharth Roy Kapur, CEO, UTV Motion Pictures.
Films are a risky business, ?so like in the case of stocks, you need to have a portfolio approach?, says an insider. Big production houses, including the family-run Yash Raj Films, are releasing 5-10 films a year, which is a mix of big, medium and small budget films. ?The investment returns on low budget films are really good,? says Naveen Shah, CEO, Percept Picture Company, which distributed Pakistani film Khuda Kay Liye in India with great success. ?Besides doing well at the multiplexes, it?s been a big home video seller,? says Shah. Bollywood is experimenting with varied content in a bid to hedge risks.
But insiders admit that ?Bollywood is not all there? in corporatising itself, for there are discipline, accountability, IPR (intellectual property rights) and piracy issues to begin with. ?We have managed corporatisation to a large extent. The industry has taken the first steps towards insurance. Some studios are opting for completion bond companies (completion bond companies insure that the film is physically completed; no guarantee is made of its artistic, creative or commercial value)?that?s prevalent in Hollywood,? says Kapur, ?but we need to do much more to make the production process more efficient. Our line production process needs to be tightened.?
Admittedly, things are different from what they used to be. Bollywood is not a cottage industry anymore where people have to mortgage homes to make films,? says Naveen Shah. ?It?s a legitimate business and one can raise money from the market, which is opening up huge possibilities,? he adds.
There?s perhaps a reason why corporates are willing to finance films now more than ever. With the multiplex boom, if a film gets a good opening, the return on investment is assured. Though ticket prices aren?t as high as in the West, the sheer numbers make up for it?in 2007, India saw ticket sales of 3.25 billion, which, according to a PwC-Ficci report, is slated to rise to 3.5 billion by 2012.
But to ensure a good opening, only hype isn?t enough, good content is, as audiences have shown this year. Think Drona, Love Story 2050. ?Clearly, the craft of film making hasn?t yet been touched by corporatisation,? says Shah. ?Making a film is not quite like building a bridge.
There?s a whole creative process involved from story-telling, music, packaging and so forth. The studios still work as a financial bag relying on a creative mind,? he adds.
Bollywood has been having a good run for two years. ?The market was so good that sheer quantity was driving the economics,? says an insider. Not anymore. ?With funds drying up, quality is going to be the single most important differentiator. The difficult times will compel the industry to come up with high quality products,? points out Shah. But the film industry is also looking beyond the box-office to de-risk. New revenue streams are opening up?think satellite, overseas, digital, music rights, gaming, merchandising and so forth.
According to PwC-Ficci, ancillary revenues are expected to grow 16% over the next four years to reach an estimated Rs 1,800 crore in 2012 from Rs 850 crore in 2007. All this wouldn?t have been possible if key players hadn?t taken the difficult road to corporatisation.
?Tomorrow: Marketing Bollywood? the future
