Shock waves within the film industry thanks to shockingly low collections,” wrote Taran Adarsh on X earlier last month. The film critic and trade analyst, best known for giving trade figures and box office updates on social media, made the post on August 3 amid the release of a slew of Hindi movies, all of which failed to make a mark at the box office.
While Auron Mein Kahan Dum Tha, starring Ajay Devgn and Tabu, collected just Rs 6.75 crore in the first weekend (the movie was made at a cost of Rs 100 crore, as per reports), Ulajh, which also released on August 2 and stars Jahnvi Kapoor and Gulshan Devaiah, reportedly grossed a net of Rs 4.90 crore (first weekend), even though it was made at a cost of Rs 35-50 crore.
A month earlier, Sarfira, which stars Akshay Kumar, Paresh Rawal and Radhika Madan, too, bombed at the box office despite receiving positive reviews. Made at a cost of Rs 80-100 crore, the film collected a little over Rs 30 crore worldwide.
In fact, the first half of 2024 has not seen any money spinners—the overall India box office declined by 30-35% compared to the same period last year—besides a 25% lower footfall in cinemas versus pre-Covid levels, as per reports.
Adarsh’s X post and the disastrous figures are a telltale sign of the downward trajectory of Bollywood’s box office fortunes —at a time when big-budget movies are sinking without a trace and cinema footfalls are at their lowest, even as stars are making unreasonable demands and entourage and film production costs are skyrocketing, as per industry observers.
Industryspeak
Unsurprisingly, these key stressors are increasingly finding mention in comments made by industry stalwarts. In July, filmmaker Karan Johar, who runs Dharma Productions, expressed his concern on reputable actors demanding unreasonable fees. “Those movie stars asking for Rs 35 crore are opening to Rs 3.5 crore. How’s that math working?” he was quoted as saying in an interview.
Earlier in June, commenting on the rising entourage costs, filmmaker Anurag Kashyap claimed in an interview with director and actor Janice Sequira that one of the actors had a strange demand for a cook, who would charge Rs 2 lakh for food that would be so little that “it looked like birdfeed”. Actor Nawazuddin Siddiqui also made a similar observation recently. “There are many unnecessary demands that actors have, they want everything lavish. I have even heard that some actors have five vanity vans—one for gymming, one for cooking, one for eating, bathing, practising lines, and what not. Yeh paagalpan hai, koi paagal hi hoga jo paanch vanity van leke chalta hai (This is madness. Only someone mad can go around with five vanity vans),” he was quoted as saying in a media report.
Emphasising that it is crucial to redefine what constitutes theatrical success, Johar had said in his interview: “When action films like Jawan or Pathaan worked, everyone jumps that way. Then a love story works, the same thing happens. We’re running around like headless chickens…”
“We haven’t realised that audiences now want rooted Indian cinema that brings pure joy, without the pressure of critics,” added Johar, who is reportedly in talks to sell a majority stake of his production company. He is looking for potential investors owing to a decline in post-tax profit of his company, dropping from Rs 27.1 crore in FY 2022-23 to Rs 10.70 crore in FY 2023-24, as per reports.
Actors Anil Kapoor, Arshad Warsi and Kriti Sanon have also spoken on pay disparity, rising expenses such as “suffering due to the sharp rise in pay scale” or “the need to understand what is necessary for a film and what is luxury”.
Mumbai-based film critic and trade analyst Atul Mohan says any superstar can falter in the absence of good content; yet, he doesn’t doubt the key concerns addressed by directors. “It’s a well-known fact in the industry that actors carry a fleet of staff, personal trainers, makeup men, social media staff … with all this cost borne by the producer. Producers are struggling to achieve numbers, funding and tie-ups with studios—adding to this are star tantrums,” says the industry veteran who has been in the business of cinema for over 25 years.
Small is big
The writing is on the wall for inflated budgets and talent salaries, says Tanuj Garg, managing partner of Ellipsis Entertainment, which has produced some highly-acclaimed, cost-effective films like Tumhari Sulu, Neerja, Looop Lapeta, Do Aur Do Pyaar and Sharmajee Ki Beti, to name a few. “These are no longer sustainable. There is a potent market out there but it is only and only about stellar writing and creative conviction backed by super-sound economics. Everything and everybody else is incidental.”
Garg’s comments come at a time when star power is dwindling and failing to set the cash registers ringing, but low-budget films, new faces and unique subject lines are constantly producing the right marketing mix at the box office.
Take for instance, Vidhu Vinod Chopra’s directorial film, 12th Fail, which crossed the Rs 50-crore mark in six weeks, and Kiran Rao’s Laapataa Ladies, which released on March 1 and grossed over Rs 25.26 crore worldwide till May—for a film made with a budget of just about Rs 5 crore. Both films did not have A-list actors but were commercial hits nonetheless. Rao’s film made its OTT debut on Netflix, garnered 13.8 million views in four weeks, as compared to Ranbir Kapoor’s Animal, which had 13.6 million views in the first three weeks. Munjya, a creature feature produced by Dinesh Vijan’s Maddock Films, was made at a cost of just Rs 30 crore but collected Rs 123 crore, as per reports.
Reportedly, A-list actors like Ranbir Kapoor charged Rs 35 crore for Animal, Hrithik Roshan charged over Rs 50 crore for Fighter, Akshay Kumar charged Rs 60-80 crore for Bade Miyan Chote Miyan, while Shah Rukh Khan earned about Rs 40-50 crore in Pathaan, apart from a profit-sharing deal on the film. Bade Miyan Chote Miyan was made on a budget of Rs 350 crore but it grossed only Rs 108 crore at the BO. It was produced by Pooja Entertainment, which is reportedly reeling under financial crisis for not paying staff their dues.
This year, the only ‘blockbuster’ has been Kalki 2898 AD, the Telugu epic science fiction film that grossed Rs 1,100 crore worldwide. Starring Prabhas, Amitabh Bachchan and Deepika Padukone, Kalki 2898 AD is followed by Siddharth Anand’s Fighter that collected Rs 337.2 crore worldwide. Another exception is Stree 2, which became the highest-grossing film for actors Shraddha Kapoor and Rajkummar Rao with a collection of more than Rs 200 crore in the first five days of its release last month.
The horror-comedy, in which Kapoor and Rao reportedly charged Rs 5 crore and Rs 6 crore, respectively, is also set to become the biggest Hindi film of the year.
As per the India Box Office Report by media consulting firm Ormax Media, June collections crossed over Rs 1,200 crore primarily due to the performance of Kalki 2898 AD across markets, contributing to over 60% of the BO of the month. The industry is expected to cover up with a strong future line up across languages like Pushpa 2: The Rule, Singham Again, Bhool Bhulaiyaa 3, The Greatest of All Time, Double is Smart, Talapati Vijay, Emergency and Devara: Part 1, among others.
“Small-budget films are doing well without big names,” says Karan Taurani, senior vice-president and research analyst (media, consumer discretionary and internet), Elara Capital. “Regional films do well in Hindi markets now. Dubbed versions of films like RRR and KGF Chapter 2 have done well in English/ Hindi language, which were earlier contributing only 10% of the total BO. Today, it is 20-25%. Today, of the total BO collection worth Rs 12,000 crore, Bollywood’s share is estimated to be around Rs 5,000 crore,” he adds.
As per Taurani, budget films like Srikanth, Crew, Article 370 and Munjya have fared well but 80% of Hindi box office today depend on big-budget films whose absence has affected collections. “Also, films available on OTT platforms within four to six weeks as compared to earlier, where eight weeks was a strict norm, offer ample content variety to consumers. This has been a major setback for cinemas.
Market economics
Taurani shares there are a number of reasons why movies fail at the box office. “What the audience wants is unpredictable. A well-made film may not connect with the viewers. Its success also depends on the timing, sales and competition from other releases. Overall market conditions and external factors, such as the impact of digital streaming platforms, can also affect box office performance,” he adds.
Also, the first half of the year contributes to 35% of BO and the second half to 65% due to the festive season. Trade analyst Mohan says, “Ticket pricing is a strategy where small-budget movies are kept at an affordable pricing. For instance, a ticket for Laapataa Ladies was sold at Rs 99 in many theatres. Pricing is dynamic to attract footfall. It has been observed that the producers request to keep the pricing low on weekdays and weekends slightly higher.”
The 150% hike in movie ticket pricing post-Covid is another factor for cinemas now running at an occupancy level of 80-85% of the pre-Covid levels, estimates Taurani of Elara Capital.
Bollywood’s current state of affairs is a fallout of the content accessible on OTT platforms, says trade analyst Mohan. “OTT has given movies a repeat value, all of which are now available at convenience. Producers make moolah from OTT where movies are released with pre-sold rights,” he says.
For instance, if a film does a business of Rs 100-125 crore, it can be sold within a slab of Rs 30-40 crore on OTT, depending on factors such as stars, genre, etc. Actors sometimes sign endorsements, take a percentage cut or produce their own films in order to make the project viable.
As per Manish Kalra, chief business officer of ZEE5, both cinema and theatre complement each other and democratise the reach of content. Movies released on OTT in eight weeks are good for theatre-goers giving access to people in remote areas where the movie was not released. “The pandemic was a shot in the arm for the digital industry. We were growing in triple digits then. Today, we are growing in double digits as consumer subscriptions continue. OTT gives ample choice to the viewer,” he adds.
Guneet Monga Kapoor, film producer and founder of Sikhya Entertainment, who has produced films like Gangs of Wasseypur, Lunchbox, Masan, Kill and, most recently, the 2023 Academy Award-winning documentary short film The Elephant Whisperers, says both Bollywood and OTT have been a game-changer.
“I’m a storyteller at heart, so adapting to technology is important. If a new technology comes tomorrow I will share stories there. If one content can be conveyed under 40 minutes like The Elephant Whisperers, another can take 2 hours, so adapting the story to where it can be shown is part of the process,” says Monga Kapoor, who has collaborated with Karan Johar for Gyaarah Gyaarah, a thriller-cop drama on Zee5.
Bringing back the mojo
Not all’s lost yet. PVR Inox has been bringing back audiences to theatres with film festivals, concerts, and sports screenings to recover from muted occupancy, which was 20.3% in Q1FY25, largely led by poor BO in the Hindi genre (35% y-o-y drop), delay in large-ticket regional films due to elections and delay in Hollywood releases due to backlog from the strike by the Writers Guild of America (WGA) in 2023. However, with big-ticket Hindi/regional movies in the future, Hindi BO is expected to grow 40% y-o-y in Q3FY25, which may sharply improve EBITDA margin, led by premium ticket prices, higher spend per head and ad revenue.
“Film festivals, concerts and sports screenings are expected to reach 6% in the future, which was 3% of the total admissions in Q1,” says Kamal Gianchandani, chief business planning and strategy, PVR INOX, and CEO, PVR INOX Pictures, and president, Multiplex Association of India.
“Over 60% of the admissions coming from higher price premium formats like IMAX, 4DX, ICE, people have the option of watching the same film in our regular mainstream cinemas with lower ticket prices. But a large number prefer to watch them in premium format. It shows that people are comfortable with pricing, but they’re looking for compelling reasons to come to theatres such as F&B offerings and other experiences,” adds Gianchandani.
Despite fluctuations, Ashish Kanakia, CEO of MovieMax Cinemas, remains optimistic about BO collections in Q3 & Q4. “Recent successes in regional films like HanuMan, Guntur Karam, Tillu Square, and Punjabi film Jatt & Juliet 3 show an appetite for diverse content. People visit cinemas to experience larger-than-life stories but films like Laapataa Ladies or 12th Fail are small budget, content-driven films with unique narratives and high production value, highlighting good content and the right marketing mix can elevate a film’s success any day,” he adds.
Coming soon
For Kumar Taurani, MD of Tips Industries, who has produced films like Merry Christmas, Sridevi Prasanna and Ishq Vishk Rebound, movies and music are the most sought-after sources of entertainment and this requirement will never diminish.
“We must focus on creating compelling content that resonates with the audience. While there will always be fluctuations at the BO, the fundamental appeal of Bollywood remains strong. As producers, we must stay open to change, embrace new trends, and adapt to the evolving tastes of our audience,” says Taurani.
As the managing partner of a content outfit, Ellipsis Entertainment’s Garg is clear about who and what to back without necessarily being blind market followers or going by the herd mentality. “Our films bear testimony and that has put us in good stead,” he says.
Garg firmly believes this country survives on entertainment and cinema is the staple source of entertainment. “The quantum of funding available may change, but the funding per se will not stop,” he adds.
“Today, people understand the value of economics. Actors have realised that producers and studios now have the ability to say no, which was not the case earlier. Artists’ entourage cost is the biggest price correction that needs to happen,” says a veteran director and producer, who has worked with industry stalwarts.
Needless to say, some stars have been compelled to drop prices. Trade analyst Taran Adarsh recently posted on X, “Looks like the revamping of #Hindi film industry has begun… The process of revising star fees and movie budgets has commenced. The good part is, a *few* actors are revising their remuneration *on their own*—this move is being done voluntarily, without any production house / studio requesting it.”
— Manish Kalra, chief business officer, ZEE5
— Tanuj Garg, managing partner of Ellipsis Entertainment
— Kumar Taurani, MD, Tips Industries
— Kamal Gianchandani, CEO, PVR INOX Pictures
— Guneet Monga Kapoor, film producer
