Bollywood actor Arjun Kapoor recently got candid at a FICCI event where he broke open and decoded the business of Bollywood; making money in the industry is not as easy as it once was. The actor explained the revenue system of films in layman’s terms and also said that the current system was completely different from the one he had come to know as he entered the filmmaking business.
The star, who is the oldest son of veteran producer Boney Kapoor has had an intimate look at the inner workings of Bollywood since a very young age and was thus able to provide keen insights into its economics.
“You can’t rely on your MBA degree to make a movie.”
Kapoor stressed that having an MBA degree wasn’t enough to get sufficient returns from a movie and that one had to keep their education aside if they wanted to achieve something, calling the profession of acting impulsive and gut based. “There’s no upside to making films. Those who come from the outside would think it’s Russian Roulette, it’s gambling, not a business. I think the first thing to note is don’t look at it like an Excel sheet because it’s a very gut and impulsive profession. You’ve to keep a lot of your education aside when you want to do something,” said Arjun.
“In that chaos, to find some structure and order, some numbers come in. You can’t rely on your MBA degree to make a movie. You can use your MBA in the process of making the movie, but the choice to make that movie should come from you as an audience, and why the directors, writers, and actors have that vision. Those numbers are important because at the end of the day, it’s a business. You have to safeguard the people who invest in the film,” he further explained in a session at the event.
“The economics of our industry has completely flipped now”
The actor also touched upon how the business of moviemaking has become much more mechanical and set in its ways since his debut with the 2012 film Ishaqzaade. He said that the theatrical business was suffering due to the shift from satellite to social media and OTT. The change in media consumption patterns in audiences has become a key contributor to the way film revenue is collected today. “Theatrical is your core business revenue, it decides the budget of the film. Earlier, satellite used to be your biggest post-theatrical revenue, but now the advertisements have shifted to social media and YouTube. Then there’s music and digital,” he explained.
He debunked the myth that just because a movie was deemed a Box Office success, did not mean that the payouts would be as grand as reported. “Theatrically, when you hear the film did Rs 100 crore, the distributor share is only Rs 50 crore. The rest goes to exhibition and taxation. The distributor would usually pay you the Minimum Guarantee upfront so that you have the cash flow to make the film. Eventually, when you make Rs 500 crore in theatrical, you actually earn only Rs 150 to Rs 200 crore. Overseas can be another revenue, but the revenue sharing is very different there. It can be 45-55% or 40-60% depending on the model.”
Finally, the actor painted a bleak picture of the industry and mentioned that not even big names were enough to guarantee a minimum revenue collection – all bets were off post pandemic.
“Now, that’s changed because there’s no minimum in theatres. It can do Rs 5 crore or Rs 50 crore, there is no middle. We knew a Kareena-Arjun film would do at least this much. There’s no such guarantee today. So, the revenue model is changed completely. Today, you need to first determine what your digital, satellite, and music would be because that’s the base value of your film. It’s become inverse to what it was in 2019. Theatrical is a bonus now. The economics of our industry has completely flipped now.”