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5 issues the trade needs to resolve to take the business of films to the next level

Ajit Andhare, COO, Viacom18 Motion Pictures

With a legacy of over 100 years, Indian films have evolved, year after year, enthralling viewers across the globe. Over time, with cinematic gems like Mughal-e-Azam, Mother India, Sholay, Dilwale Dulhania Le Jayenge, Dil Chahta Hai, Kahaani, 3 Idiots, Queen and Airlift, among others, our films have undergone a paradigm shift.

Whether content, marketing, distribution and exhibition infrastructure or production quality, Indian cinema has reached new heights with the aim to entertain, and at times, inspire. Yet, there are fundamental issues that have been plaguing the business aspect of the industry. As a fraternity we need to acknowledge them, debate them and come together, and find a way forward.

#1 Heads: I Win, Tails: You lose

The central issue confronting the industry continues to be a ‘Heads: I Win, Tails: You Lose’ proposition prevalent at the heart of Indian filmmaking. The key issue that few are willing to discuss is the investor-producer being suitably rewarded, given the risky nature of the business.

The current hit rate of Hindi films is at an aggregate level, where only one in two films succeed at the box office. But, is the investor-producer making a sufficient return on a hit to cover the losses he is bound to incur on the other films?

If you compare the film sector with any other risk-oriented businesses that run on a portfolio approach – for instance, the venture capital industry that operates with an even lower portfolio hit rate – the multi-baggers on the few successes more than compensate the losses on majority of investments.

How do we run film portfolios to improve the overall return, is a key question that needs to be addressed. The answer lies in better hit rates and an equation where film IP is held mostly or only by the investor, with box-office-related incentives or first-cycle profits worked out for directors/talent.

#2: Leftovers Of A Cake Already Sliced

Film business is a rights business, where a bouquet of rights is created once a film is made. The producer should work to monetise these rights over a period of time. The star-led rights-deals that carve out satellite or digital rights, impinge on the rights of a producer as you are left carrying only box-office rights that have the maximum risk attached.

This trend needs to be bucked as rights should remain with the risk-taking producer/studio to manage the overall risk. In any case, if the first cycle is sold, the producer’s cost should be reduced adequately and the second cycle should come back to the kitty.

#3: Your Driver Has Already Seen The Film!

Rising piracy combined with greater penetration of mobile devices and satellite television are driving footfalls away from cinemas. A top-billing film could command up to seven crore admissions in cinemas a decade ago, a number that has nearly been halved for the same film today. Rising prices might have pushed box office collections but they have driven admissions out. The ease with which a film is seen by your driver on his phone for nearly no cost, gives him no reason to go to cinemas.

Releasing films only in DCI-compliant cinemas, DPX-only censor process, stronger action by the government against piracy and centralising the final edit in a tightly controlled facility are some of the radical but effective solutions to consider.

#4: Open My Window, Please

An event film commands the audience and pulls them to cinemas. However, smaller films that might be more widely consumed on digital platforms need to be given better windowing immediately after satellite??? so as to maximise digital revenues.

#5: Talent Cost vs BO Returns

Considering that many films chase a limited talent pool allows for the talent to price itself at a level where the film economics suffer. Unearthing new talent and investing in it  to improve talent supply is the way to tackle this issue. Talent prices need to be pegged to the BO opening. This has been spoken about for a while now but remains difficult to implement, given the fragmented nature of
the industry.

Cinema has been the most popular platform of mass media in the country. The big screen offers a form of escapism that simply cannot be achieved at home or on your mobile/ tablets by streaming content. Going to the movies is a ritual – the cue to buy the ticket, the tub of popcorn and the hot samosas to even the trailers that tempt the next visit before that evening’s entertainment has begun. Every industry has its fair share of problems but I would like to conclude with Mr Abdul Kalam’s quote: “We should not give up and we should not allow the problem to defeat us.”

Box Office India
Collection Chart
As on June 24th, 2017
FilmsWeekWeeklyTotal
Bank Chor1
5.85Cr
22.59Cr
Phullu
1
2.67L
2.67L
G Kutta Se1
2.11L
2.11L
Ramad
1
1.58L
1.58L
A Mystery Story120K20K
 Apmanit110K10K
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