Bollywood’s New Business Model Explained

Note: One of the most interesting reads on current BO scenarios….Must Read for out NG Users(espc. the BO Users over here)

 

The year 2011 may have thrown up a number of hits, super-hits and successful films but let’s face it – the industry should not be getting as excited and feeling as elated as it is. For, if one scratches the surface beneath the success stories, the picture that emerges is not very rosy. Here’s why…

 

In recent times, a number of films have proved to be plus fares not as much for their content as for the boom in satellite market and subsidies offered by governments of different countries to producers shooting their films there. That is to say, the money is coming in not so much from the public at the box-office but from other sources.

Don 2, Desi Boyz Benefited From Non-Theatrical Revenues In fact, it wouldn’t be incorrect to say that films like Ra.One, Desi Boyz and Don 2 have the satellite channels and subsidies to thank for their plus status. Note, for instance, that Ra.One benefitted to the tune of Rs. 28 crore which it got by way of subsidy from the UK government. The makers of Desi Boyz also gained from the UK government’s largesse – they got around Rs. 15 crore. Don 2, which was shot extensively in Germany, is expected to gain by Rs. 15 crore which would be the amount of subsidy its producers would receive from the German authorities.

 

 

The fate of a film at the box-office no longer matters as much as it used to till two years ago. That’s why the attention given by filmmakers to scripts is going down. The satellite rights of all the three aforementioned films were pre-sold. In other words, the television channels acquired the satellite rights of these (and many other) films before they hit the screens, which means that the price for their satellite rights were decided irrespective of their performance at the ticket windows. What one is trying to arrive at is that the fate of a film at the box-office no longer matters as much as it used to till, say, two years ago. Not only has the share of box-office earnings in the total revenue pie of a film reduced but the importance of the distributors’ shares in deciding the other earnings of a film has also declined considerably. That’s, perhaps, why the attention given by filmmakers to scripts and content is going down. With satellite channels being ever hungry for film software, producers are assured of hefty sums of money from sale of satellite rights. And if they can shoot their films in foreign lands and thereby manage to get part of their cost subsidised, it makes matters so much easier for them. Satellite rights and subsidies, together with audio rights could help a producer of a star-cast film recover upto 60-70% of his entire cost, sometimes even upto 80-85%! In this scenario, producers were bound to become lackadiasical in their approach to making films – and they have. For, as long as their film doesn’t see them in the red and rather yields profits, what’s their worry? Who cares whether the moolah comes from the public or from other sources so long as it goes towards offsetting the cost.

 

In real terms, those films are not being seen by enough people which is why their collections come crashing down after the first weekend Ra.One, Desi Boyz and Don 2 are just three examples. Producers of many big-budget and star-cast films have similarly gained from the largesse of television channels and governments of foreign countries rather than because they made good or great films. If they still laughed all the way to the bank, it is because of the undying demand for films from television channels and due to foreign governments wooing Bollywood producers. It may be a paradox that governments of various countries offer subsidies to Bollywood producers who shoot their films in those countries because they believe that such films, when viewed by people in large numbers, would give a fillip to tourism in those countries. For, in real terms, those films are not being seen by enough people which is why their collections come crashing down after the first weekend.

 

Of course, this happens in Hollywood too. Often, box-office revenues of a film are far outweighed by revenue from other sources like, say, DVD sales. But for DVD sales to be brisk, the pre-supposition still is that the public must like a film. However, there’s no such requirement when a TV channel acquires the satellite rights of films at obscene prices or when a country offers huge monies to producers to shoot their films on their hand.

There is another way of looking at this scenario. Maybe, the budgets of our films have gone up because revenues from non-theatrical sources like the above have increased phenomenally in recent times. Maybe, producers are spending heavily only because they can see returns. Maybe, that’s why box-office revenues aren’t keeping pace with the costs and yet, producers are laughing all the way to the bank. Put differently, if the satellite market were to crash tomorrow or most of the foreign governments were to pull back their subsidy schemes, producers may become tight-fisted and spend much less on their films. In such a scenario, box-office returns may not after all look so small in comparison to the investment in the films because the figure with which the revenues would be compared would itself have dropped down dramatically. Some readers have complained that Koimoi has started calling films successful even when they don’t run for more than a couple of weeks.

 

Just a related aside here. Some of our readers have complained to us that we have become partial towards producers and distributors in recent times and have started calling films successful and hit even when they don’t run for more than a couple of weeks in cinemas. The above should clear the air. Our stand is clear: if revenues, from whatever sources, of a film exceed the investment in it, we have to term it a success even if the theatrical earnings are comparatively low. Imagine calling a film which gives a 25% return on investment a flop merely because it got most of the earnings from non-theatrical sources. Yes, some exhibitors may not have earned much from such films, and, in some cases, may have even lost in them (if they had paid fancy MGs) but that can’t be enough reason to call a profitable film flop. The profit a producer often makers in his film is so high (in crores of rupees) that even if one were to deduct the combined losses made by the exhibitors (in lakhs of rupees or, in extreme cases, a couple of crores) in that film, the final figure would still be that of a hefty profit. Would it be fair to call such a film a failure?

 

Not to our mind! Bollywood’s Old Guard Needs To Change The old guard needs to change its outlook because business of films has changed – and is changing every day. Finally, when the history of cinema is written, a profitable film will be termed so, irrespective of how it became profitable – from the cinemas or because of other revenue sources. The bottomline is comparison of cost with revenue. Nothing else matters when one is talking of the economics of films. Creativity is a different subject altogether.

 

LINK:  http://www.koimoi.com/bollywood-news/bollywood-s-new-business-model-explained/

5 Comments

  1. TERA BAAP
    TERA BAAP
    January 4, 2012 at 6:24 AM

    LOL. Bathless tries to justtify his prostitution!

  2. aryan29
    aryan29
    January 4, 2012 at 6:54 AM

    Bathless tries to justtify his prostitution! ROFL @TERA BAAP

  3. rajesh
    rajesh
    January 4, 2012 at 11:31 AM

    Komal at his worst.

  4. fearlesssoul
    fearlesssoul
    January 4, 2012 at 12:45 PM

    He has not shitted for long time. May be wants to dispose the accumulated feces at one time but finding it difficulty in Expulsion ;)

  5. danish
    danish
    January 4, 2012 at 6:47 PM

    its just a desperate attempt to regain lost credibilty, or retain atleast watever is left of it in the way he tried to prove ra1 a hit. he says we have to declare films hit if the income excceds invetsment

    now there are two scenarios for ra1

    1. ra1 was sold to eros for 79 cr (india) and the DS is 65 cr. so how is it a hit?

    2. ra1 is sold to eros for 150 cr (worldwide) and the worldwide DS is 65 + 25 cr so how is ra1 a hit?

    even if its sold for 135 cr how is ra1 a hit.

    the satellite revenue etc goes to the producer not distributor.

Page 1 of 1

Post Comment

You must be logged in to post a comment.

viagra generic meltabs split cialis 20 mg prednisone tab 50mg viagra buy thailand phenergan 250 mg buy viagra kuta remedio generic viagra buy lisinopril china strattera 40 mg pret xenical generico mexico bestellen viagra online cialis 20 mg description cheap viagra made lasix tabletten 40 mg about glucophage 500mg doxycycline 250mg infection cialis online drugstore generic cialis authentic cialis 5 mg lilly cheap viagra 200mg viagra otc generic bayer levitra cheap augmentin generic price metformin 1000 mg images lasix backorder propranolol 40mg bula 50 or 100 mg zoloft doxycycline 100mg liver buying dapoxetine hydrochloride buy orlistat alli cialis 100 mg 10 tablett buy levitra 5 mg buy strattera adderall venta xenical online viagra 25 mg hinta cipro 750 mg iv doxycycline 100mg indian cialis generico 5mg valtrex mgs 1000 clomid challenge 50mg 100 mg di zoloft celebrex 400 mg daily lisinopril anxiety disorder generic buspar 10mg levitra 25mg 150 mg prednisone 8 days nexium 20 mg esomeprazol acheter nexium 40 mg doxycycline 50 mg chlamydia generic wellbutrin xl 450 cialis 10mg everday cheap kamagra bulk generic viagra.nz azul generico viagra erythromycin 333 mg dosage order xenical medicine nexium 20 mg preis merrick generic propecia brand levitra online nexium 40mg ndc cialis canada 5mg cialis 20 vs 40 mg prednisone 5mg pill viagra 100mg compare hawaii generic viagra cialis tablet 10mg order viagra cod vega viagra generic viagra generico germed levitra buy online phenergan 5mg dosage iui clomid 25mg viagra online review zithromax 600 mg susp viagra buy korea forum propranolol 40 mg lump nolvadex 40mg cialis film 20mg zoloft 150 mg tablet generic wellbutrin xl viagra 500mg valtrex generico cheap viagra generic singapore clomid malaysia online xenical 120 mg upotreba 50mg de viagra viagra 100mg street synthroid 75 mg bula online wellbutrin phenergan 25mg cost online cialis free viagra nombre generico lexapro 5mg price cialis strips 10 mg cheapest viagra singapore cialis 05mg wellbutrin tablets mg valtrex generic equivalent generic viagra 24 hours generic synthroid synthroid switching generic salzarex generic cialis celebrex 200 mg kaina cheap viagra sydney review viagra online viagra de 500 mg cialis 50 mg 100 mg amoxil 500 mg suspension cheapest clomid uk cytotec tab 0 2 mg prednisone 20 mg cost zovirax generic for india cialis buy buy levitra philippines generic lexapro dangers viagra buy pharmacy viagra to order generic priligy 30mg phenergan 25mg reviews cialis 5 mg picnogenolo prednisone 20 mg sciatica buy generic amoxil generic viagra 10 propecia 5mg prices prednisone 20 mg ingredients online black cialis costco 5mg cialis celebrex caps 200 mg cialis online apotheek phenergan 250mg cialis tadalafil 5mg viagra prescriptions online generic viagra 26 cialis lexapro 20 to 30 mg cheaper than nexium valtrex 5 mg viagra generico peru buy 200mg clomid 28 x 5 mg cialis cialis 100 mg 4 tablet buy cialis store lexapro 5mg forest 12 online generic viagra nexium 40 mg kaina dosis augmentin 250 mg generic 150 mg viagra zoloft buy pypal lexapro generico prices cheapest levitra prednisone dosage 10 mg cialis 20mg malaysia cheap 50 mg viagra order for viagra review cialis 10mg cheapest generic wellbutrin doxycycline 100 mg dreams buy augmentin wellbutrin generic 300 mg cialis online info glucophage 500 mg daily lexapro generic 5mg diflucan oral 200mg zovirax generic available online clomid johannesburg comprar cialis generico cialis generico dosis mims online celebrex acquisto viagra 25 mg zithromax 200mg uti cialis 2.5 mg appearance zithromax 500mg australia generic wellbutrin efficacy comprimes cialis 5mg cialis 5 or 10 mg 500 mg amoxil cialis 10 mg etkisi order authentic cialis viagra 100 mg uso glucophage 850 mg precio buy cheap cialis levitra bucodispersable 10 mg levitra 10 mg.ca buying kamagra australia nexium 20 mg gastritis hydrochlorothiazide 50 mg uses viagra 5mg cipro 500 mg endikasyonlari clomid 150 mg pregnant lisinopril 10 mg generic generic viagra purchase zithromax buy chlamydia generico viagra dejavu levitra 5mg kaufen free cialis online buy everyday cialis propecia generic efficacy viagra singapore buy buy lasix 500mg 300 mg zoloft dosage viagra fiyatlari 100 mg levitra mg10 generic cialis nederland generic viagra sydney doxycycline 150 mg sun cialis 10mg fta4 nexium in generic tetracycline cheapest 60 mg prednisone day online viagra arizona buspar 10mg information viagra 50mg review propecia 0.5 mg fish doxycycline 500mg levitra online health buy viagra kowloon buy clomid pregnancy viagra 100mg fta 12 levitra 10 mg test glucophage 1000 mg overdose generic valtrex wiki xenical 120 mg seattle cialis 30 mg dosing buy viagra cod diflucan tablete 150 mg clomid 50mg miscarriage prednisone 10 mg usage generic viagra international amoxil 500 mg uti viagra 50 mg fiyat synthroid 75mg generic viagra dose cialis online advertising viagra generico curitiba buy cialis 200 mg viagra online canda diflucan 50mg used amoxil online prescription zovirax pills 400 mg generic levitra unicure lexapro prescription online lisinopril hctz 5 mg tab amoxil 500 mg cialis 40mg day generic prednisone cost 2.5mg cialis cost kamagra cheap india viagra instructions 50 mg arzneimittel cialis 5mg cialis 50mg shop viagra online aust generico cialis brasil buy viagra georgia augmentin to buy buy nolvadex gynecomastia glucophage buy cheap viagra buy shanghai levitra 20mg used prednisone 7 mg half 20mg levitra synthroid mail order efeito viagra generico viagra 50 mg prices buy viagra chennai thuoc hydrochlorothiazide 25 mg cialis tab 10mg nexium 40 mg inj clomid 50mg pregnancy celebrex 200 mg wiki cheap propecia prescription buy viagra bahamas viagra 100 mg kullanimi online indian viagra online viagra overnite cialis 20 mg controindicazioni buy synthroid 175 mcg cialis com 5 mg viagra pink buy metformin 500 mg brand viagra 50 mg erfahrung prednisone generics xenical 60mg cap buy zoloft online lasix 60 mg tablet cialis viagra generico prednisone 50 mg novo zithromax online paypal viagra online dublin prednisone 5 mg tablets cheapest lasix online strattera 60 mg adults zoloft 50 mg engorda levitra 10 mg comprar bactrim f 800 160 mg generic cialis free cialis compresse 5 mg valtrex generic alternative viagra bestellen online 24 mg prednisone viagra online original mens viagra online cialis soft buy diflucan 50 mg capsule levitra viagra online viagra deals online buy cheap nexium generic viagra 100 tabs levitra 10 mg fiyat lexapro 20 mg pregnancy strattera oral order viagra 6800 mg buy legitimate viagra nexium 40 mg blist lisinopril hctz 20 25mg generic viagra busts cialis jelly buy cialis 20 mg cheap buy propecia ebay generic sildenafil viagra viagra generic names cialis 80mg buy zithromax 500mg francais generic viagra rosebud buy zovirax walgreens nolvadex 10 mg tablet wellbutrin 300 mg bijwerkingen glucophage 50 mg generic synthroid strengths buy levitra vardenafil cialis online guide diflucan capsules 150mg propranolol 40 mg vademecum cheapest generic propecia cytotec pfizer 200 mg propecia 1mg apteka erythromycin 500mg price generic soft viagra wirkung viagra 25mg diflucan 200 mg kapszula viagra plus generic xenical generico preco clomid kaufen online cialis generic version propecia 5mg canada fish cipro 500mg nexium vs generics diflucan pill online vardenafil generic levitra 200 mg celebrex dosage cialis 20 mgr cialis 05mg bula order cialis today cialis 5mgsouth africawholesale lexapro 10 mg espanol fake viagra online 20 mg cialis safe taking 2 10mg levitra buy viagra where buy 100 mg clomid clomid 100mg day levitra canada cheap buy viagra youtube lisinopril 10 mg safe diflucan online ordering buy viagra montreal buy injectable zithromax doxycycline 100mg medicine metformin 850 mg axcount canada viagra order preisvergleich cialis 5mg buy clomid montreal viagra india online 200 mgs. viagra brand cialis 10 mg generico cialis ultrafarma zoloft 50 mg price genericos do priligy kamagra buy line viagra online nederland lisinopril 40 mg day buy amoxil 250mg clomid round 3 100mg nexium 20mg breastfeeding doxycycline online kopen amoxil de 250 mg nexium generic cost caverta generic viagra generic metformin online buying safe viagra cialis 200mg suppliers cialis 100mg preis generic wellbutrin buy glucophage xr 750mg nexium 2.5mg generic 40 mg cialis clomid 50 mg funziona levitra 10 mg paypal nexium 40 mg esofagite vidal prednisone 5mg lisinopril 2.5 mg tablet generic bactrim ointment diflucan 150 mg reviews buy cialis europe reliable propecia online 80 mg of propranolol cheapest propecia buy cialis cost 5 mg doxycycline 50 mg buy review generic viagra zithromax 500mg philippines cialis online florida doxycycline 100mg antybiotyki cialis 50 mg precio cialis online dangerous zithromax 2mg cialis 30 day 5mg buspar 100 mg online rezepte viagra 10mg generic cialis about levitra 5 mg cialis 10 mg tablet bactrim generic version viagra bijsluiter 100mg cialis generic express cialis 2omg upustvo buy xenical spain metformin 850 mg tds cialis 20 mg fiyat buy levitra 100mg propecia canada ordering cheap valtrex online jual cialis 80 mg zithromax 250 mg beipackzettel buy viagra danmark strattera 15mg generic propranolol manufacturers zithromax 1 mg 2 packets wellbutrin generic a102 cheap levitra uk buying cialis online viagra generic canada viagra 50mg relato lexapro 20mg engorda alternative nexium 40mg vademecum cialis 10 mg kamagra gel 50mg buy lasix canada levitra 10mg pharmacy celebrex 200 mg sverige nolvadex 30 tabs 10mg lasix tablet 40 mg quick buy viagra lisinopril 5mg tablet levitra original 10 mg buspar 5mg reviews buying hydrochlorothiazide online buy 25 mg doxycycline precios cialis generico 35 mg prednisone buy 50 mg clomid cialis 5mg generic cheap viagra jamaica doxycycline acne online duration levitra 20 mg order viagra pakistan propecia order online online viagra generic zithromax 500 mg uses cheap 25 mg viagra bactrim suspension 800 mg 120mg nexium best buy kamagra nexium 40 mg online propranolol 40 mg precio propecia 1mg 98 buy 2 viagra pills viagra online bali phenergan buy uk pro viagra online purchase Levitra 10mg cialis 5mg or 20 cheap lexapro online buy xenical miami viagra online.com cialis 5 mg buy hydrochlorothiazide 25 mg brand cost lexapro 20 mg amoxil 500 mg gravidez cialis 40 mg dosage lexapro generic problem levitra 5mg tablets cialis 20mg cpr 4 levitra generic substitute 25mg viagra fiyati buy amoxicillin amoxil generic drug cialis viagra cheap pills lexapro 20 mg costp erythromycin 250mg phap generic viagra forums 2011 cialis 25mgs