Whats the real worth of Hindi Film Industry?

I was going through these articles about Aamir’s Gajini breaking every record possible by getting sold for more than Rs. 90 Cr. What it means is that not only this movie is expected to be the highest grosser ever in the history of Indian cinema, it might very well out pace many international projects. But something really doesn’t make sense, and trust me its not about Aamir going bald, but the fact that when every market of the world is going down at the speed of sound if not light, Indian film market is expected to bamboozle past every sane expectation. This can be viewed as a reason to celebrate as well as moment to get utmost cautious. Any economics student can tell you that only thing worse than a dead market is an inflated one, and the reason is that it creates a false value for the product, which can neither be cashed nor be withheld, in the end proving out to be a kiss of death for both consumer and producer.

Now lets leave market economics and enter into filmi economics. Last year Om Shanti Om was made at a whooping budget of Rs 35-40 Crs. and was sold to Eros, amid huge fanfares, for Rs 75 Crs. The movie came with a bang, with all sorts of controversies, and toughest competition possible (which actually helped in the publicity of the movie), and ended up shattering all box office records ever set by an Indian movie, in shortest time span ever imagined. Movie till now has grossed around Rs. 85 Crs. at max, according to every box office number cruncher. Now this might be seen as a great news for some, specially Shahrukh Khan, who not only delivered the most successful Indian movie ever, but also ended with a cool profit of 35-40 Crs in the bank. That is almost 100% profit if someone is keeping records. But honestly speaking, was it such a profitable venture for Eros, who ultimately ended up buying the movie????

For Eros till now movie has made a profit of Rs. 11 Crs, but then again mind you, its not all Eros’s money, more than 50% belongs to the theater owners for showing the movie. Hence a profit of around 5 Crs for Eros. But they have the satelite rights of the movie for next 5 years hence they might add up 5-7 Crs more after DVD sales and satellite channel viewing . So after investing Rs 75 Cr you end up with a profit of around 12-15 Cr max, that is 20% profit. This might be a good number for some, but I feel when you take a risk of such a degree, profit margin should be a bit better. But still its ok. Hence I feel like that Eros will not make more than Rs 100 Crs on biggest movie of the Indian cinema till now.

Now if you take Gajini’s numbers, and expect the similar rage for the movie, which I must say is not that easy, considering Shahrukh has the biggest fan base of the world, and that too pretty loyal. Can this movie actually make money????? Indian films, infact Hindi films do not have as big of a market as English films, due to the reason of piracy. HBO won’t show pirated copy of say Gladiator, hence you will go to hall to see the movie. And then again a movie ticket in US cost $7, and $4 before 4:00PM. In US mind you, where average income is quite a bit. On the other hand, an average Indian makes less than a dollar a day, ends up paying Rs 280 per ticket on any multiplex. Which BTW comes out to be more than $7 by current currency rates. Hence a family of 4 has virtually stopped going to movies. And when they step out, they don’t want to see anything less than spectacular, else we have many examples of last year. At the same time I must point out that Hindi movie fans are not exactly like Rajnikanth fans, who take tickets for back to back shows, even before watching the movie. The ones who actually throw money and sindoor at Rajni’s entry in the movie (All these are facts, with 0% exaggeration).

So only way that a movie can make anything more than Rs 100 Cr. is that it has to be a genuine master piece. With loads of international appeal. Which no longer just topples Tom Cruise, but can even take on George Clooney and Tom Hanks, or even “Nemo”. Not only product has to deliver big time, but also it MUST NOT create any controversy, as it ends up show loosing an entire state or even 2-3. And if god forbids, it fails, it would be a blood bath not just for the actors and producers, but distributors, theater owners, workers, anyone and everyone. Its not easy to recover Rs 90 Crs, but its impossible to loose and then recover from the loss. Time has come when only international studios can now operate in India. Though this kind of gamble may not even be advisable to them, but atleast they have the power of Dollars.

I am seriously watching the course of events with much anticipation and hopes. I am keeping my fingers crossed, because future of Indian cinema now rests with Aamir, Shahrukh, Hrithik, Akshay, they can either really make David slay Goliath of Hollywood, or can throw the whole thing into oblivion.

When I am already talking about the economics of the Hindi film industry, let me also touch on one more point, that is Star value. No one can deny the fact that Gajini and OSO got this kind of selling price because these movies star Aamir and Shahrukh respectively, and their charisma is enough to make sure that people come to watch the movie atleast once. But when I read that Akshay has started asking for 22 crs. for one movie, along with rights and share in the profit, I feel pity for the producers. As we know that Aamir and Shahrukh, now do just their own stuff, but Akshay is one guy who actually acts for other production houses, so is it fair for him to ask for percentage in profits??? Because I do not think so that he will share losses if there are any. Moreover 42 Crs. (including all of his demands) means half of the budget of OSO, half of JA, 1.5 times of Chak De India, does it make any sense to you guys??? Because after all an actor is nothing but just a part of the process, no matter an all important part, but still a part.

For me all these kind of costs involved have made this industry very volatile. And at the same time it will hamper the quality of the movies alot. For example in Hollywood people do not take risks because of the costs involved, hence if you notice, all big budget movies end up either adapting a best seller, some kind of controversial novel (for build up) or either a remake of old classic (to get initial), or even sequels (though not everyone of them can be LOTR or Pirates series). Therefore Hollywood is becoming devoid of original stories and rich in special effects and, as we say in Hindi, “ang pradarshan” or skin show (I used the word in Hindi because I find it real funny, specially when Rakhi Sawant says that), to attract teens. hope Bollywood don’t follow suit.

PS: I didn’t want to sound pessimist, but then I thought everyone is throwing accolades on Aamir’s feat. There has to someone looking at the other side.

Please let me know how you found the article, except for being long, and boring, and verbose, and immature, and negative…. ok never mind.