FX-School

A NEW Term in Gaming + CG Animation, VFX, and Filmmaking starts on JANUARY 9th, 11th, & 10th!  FREE Counselling!  Call 022 4235 4235 or click here to learn more

 

New Course

New Course

The case for making fewer films

Published on : May 24, 2011
The case for making fewer films

Vanita Kohli-Khandekar / New Delhi May 24, 2011, 0:23 IST

Is it time to rethink the whole idea of scale in the film business? For a very long time, the label of being the “world’s largest maker and consumer of films” has fascinated the Indians. It is the single biggest reason why corporatisation of the film business has been given a huge impetus from private and public capital. Investors staked their money in the hope that the Indians would continue to watch a lot of films.

 

As capital started flowing in, organised multiplex chains took off. This consolidated a fragmented and chaotic theatrical business. The results were startling. The film industry has grown over four times from about half a billion dollars in 2000, when the first multiplex took off, to over $2 billion in 2010. A bulk of this growth has come from multiplex chains. Clearly, the demand side has delivered.

 

On the supply side, as organised studios got going, it was thought that they would consolidate production and distribution and squeeze greater value out of the 1,100-odd movies made in India. But that has not happened. There are only three studios with any heft in the country: UTV, Eros and Yash Raj Films. Together they released 138 films in 2010. These studios accounted for just over 10 per cent of the industry’s total revenues.

 

Compare that with the US, where just four studios – Fox, Paramount, Warner and Disney – released more than 50 films in 2010. They accounted for over 70 per cent of the total Hollywood revenues.

 

It is not a fair comparison since every variable – from the average ticket price ($7 to 50 cents) to screens (40,000 to 11,000) – is loaded against India. Besides, the US and India are at different stages of growth. But let us overlook these for a minute to look at Hollywood’s approach to scale.

 

In 2010, Warner Brothers was the biggest studio in the world. It released 23 films including Harry Potter and the Deathly Hallows (part one) and Inception. Its film entertainment division earned nearly $12 billion, or just about half of parent Time Warner’s total revenues. Disney released 16 films and its film division did $6.7 billion in revenues. Most studios made between $400 million and $500 million for every release.

 

Note that the revenues that a film company makes cannot be strictly attributed to the number of films it releases in that year. A part of the revenues comes from previous years’ releases and releases in other formats such as home videos. But if you did a trend analysis over a decade or so, the average would hold. On an average, the largest studios release 12 to 16 films a year — or roughly one film every month. Then they simply squeeze every dollar possible out of them, and they are very good at it.

 

In India, while studios such as UTV have averaged around 12, Eros does 100 films a year. And Yash Raj does, say, three or four films. So it is not clear what the best number is. As for milking a movie release well, there are a number of reasons why that remains a challenge: not enough screens, low frequency of film viewing and so on.

 

However, the biggest reason why squeezing more out of a film is difficult is that we make too many films. It creates a clutter and makes it difficult even for films with moderately good prospects to reach their potential. “In India films are not made to do business but for personal reasons,” says Sunaman Sood, director, Acendo Capital, a boutique media and entertainment advisory firm. What he means is that glamour-struck jewellers and builders don’t really care if they lose money on a one-off film. But their entry spoils the market for the people who are trying to build a business.

 

It is a bit like news broadcasting in which politicians and real-estate companies desiring to wield influence launch news channels. India now has 122 news channels, the largest in the world. But most of them are making losses. The “largest film maker in the world” tag has, therefore, been a millstone. It actually keeps everyone from making enough money. The question is: will things change if we made fewer films?

vanitakohli@hotmail.com

copyright © Business Standard click here

© Copyright 2018 FX School. All Rights Reserved.

Home  |  Privacy Policy  |  Terms of Use