Business of Bollywood: Eid holiday results shock filmmakers and executives

Bollywood in general has had a disappointing year so far, and with Tubelight failing to set the cash registers ringing, filmmakers and executives in Mumbai area worried lot.

The first half of 2017 is over, and Bollywood has seen the release of films starring Salman Khan, Shahrukh Khan, Akshay Kumar, Hrithik Roshan. But not even one of them have managed to earn Rs. 150 crore ($22 million) at the box office.

For the past five years, Salman Khan movies have dominated the Eid holiday box office, but this year has been an exception. And guess what, southern film DJ (starring Allu Arjun, Pooja Hegde, directed by Harish Shankar) earned almost as much as Tubelight, despite the film releasing only in one-third number of screens.


Watch: DJ-Duvvada Jagannadham Latest Trailer

With the stupendous success of Baahubali, there are many who’re even wondering if Bollywoods’ commercial supremacy in Indian cinema is coming to an end.

Business of Bollywood: ‘Baahubali 2’ shatters myths in Bollywood

Business of Bollywood: ‘Baahubali 2’ has not only shattered box office records, the movie has also shattered several myths that were prevalent in Bollywood till now.

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Bahubali’s success reveals that size of the market for Indian movies is huge. Indian Filmmakers just need to give the Indian audience something worth coming to the theatres for. The audience don’t care if a movie has big stars, or is dubbed, as long as the film wows them and gives them a Hollywood like visual experience.

‘Baahubali’ broke the notion that dubbed films don’t work. Hindi-speaking audience only has Salman Khan and Aamir Khan to look up to, to give them the blockbusters (Shahrukh finds it difficult to give even decent hits nowadays). Both men do only one film a year (on an average), so the younger audience turns towards Hollywood films to get their thrills on screen (‘Baahubali’ gave the audience that kind of experience).

The movie should encourage more producers (of regional films) to dream big and make a pan-India film (now that it has been proven that language is not an obstacle…and we are talking about really big numbers here.

Baahubali 2 has grossed over Rs 500 Crores worldwide in the first few days of its release.
Even in the Hindi-speaking belt of India, dubbed version of “Baahubali 2” made more on its first day of release than Bollywood’s top grossers “Dangal”, “PK”, and “Bajrangi Bhaijaan” did on their respective opening days.
“Baahubali 2” has already collected more that Aamir Khan’s “Dangal” (Bollywood’s highest-grossing movie of all time).

Also read: Baahubali-2 review

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While content shall remain the king, certain investments have made a difference – More multiplexes and upgraded single theatres across the country have pushed up collections. Fast-track penetration has happened due to digitalisation. Prints have become cheaper, day and date release possibilities (a trade term that stands for simultaneous release across markets) is now a reality.

All these factors have contributed to higher collections.

The two major contributors to revenue growth are:

  • Higher average ticket prices and
  • Broader theatrical distribution.

Having said that, theatrical contributes only 50% to a film’s overall revenues, with satellite, music, home video, overseas rights, new media, digital rights and other smaller revenue streams making up the rest.

When Making 100 Crores Was Such a Huge Deal

In Bollywood sweepstakes, yardsticks change with time. Once upon a time, great music was the touchstone of box-office success, and for years, ‘silver jubilee’ was the measure of a stunning hit.

In today’s world of impatient corporate movie makers, the benchmark of triumph boils down to a neat number: Rs 100 crore.

When Aamir Khan’s Ghajini, with its sad ending and southern-type violence, crossed the Rs 100-crore mark in local theatrical collections (post entertainment tax), it demonstrated an, until then, untapped potential. That was 2008.

Since then nine other releases have joined the Rs 100-crore club. For actors, studios, producers, investors, exhibitors, and even fans, it’s a magic figure that separates the men from the boys. Post Golmaal 3, Singham and Agneepath, the non-Khans are very much a part of the charmed circle.

What’s the significance of the number?

For the trade it’s reassuring how robust the simple, oldworld box-office collection can be if the mix is right. First, it’s earnings after paying entertainment tax that can be as high as 30%. Second, the money made overseas is over and above this. Third, it does not take into account other revenue streams that flow in from satellite rights, music and digital.

Nonetheless, it brings up a tricky question: Is the industry growing, or is it just a combination of more screens, higher ticket prices, and a wider reach, thanks to “digitalisation” that quickens the day and date release?

“A Rs 100-crore figure is really an indication of the growth in the business itself. In equal measure, it reflects the power of a film having pan-India appeal. Traditionally, the Rs 100-crore club has been dominated by the Khans. But with the third non-Khan film crossing the figure, there are definite signs that content is working in totality,” says Apoorva Mehta, chief operating officer at Dharma Productions.

Karan Johar’s latest release Agneepath, starring Hrithik Roshan, crossed a net box-office collection of Rs 114 crore in two weeks. Exhibitors like Reliance MediaWorks, which runs the 260-screens Big Cinemas, are a beneficiary of the story. According to Anil Arjun, CEO of the company, strong content acceptance is the determining factor.

It brings in 17% more viewers, supports a 12% hike in ticket price. In each of the large-format releases, the collection in tier-2 and tier-3 towns is 20% higher compared with regular movies. “So clearly, a wider appeal in these towns is a driver for a quicker ton,” says Arjun.

Producers who sell a film outright to a studio are equal beneficiaries. Atul Agnihotri, the maker of ‘Bodyguard’, sold the Salman Khan-starrer to Reliance Entertainment, for a reported Rs 60 crore. The film’s net box-office collection was Rs 148 crore. In such deals, the onus of marketing and releasing and thereafter making profits rests solely with the acquirer. Like Agnihotri, Excel Entertainment took a safe bet by selling Don2 to Reliance; Arbaaz Khan cut a similar deal by selling Dabangg to Ashtavinayak. “At the pace the industry is growing, we should see a rise in business every three years. So far, Rs 100 crore has definitely become the benchmark for big-budget films,” says an upbeat Agnihotri.

The stakes are higher for a release like Agneepath: Johar was the producer as well as the distributor. Here, the producer makes the most money. In Singham, a remake of a Tamil movie, the rights of the original film were with Reliance; the movie became a home production as director Rohit Shetty and lead actor Ajay Devgn were retained for the film. In 2011, five films crossed the Rs 100-crore mark.

Among the Rs 100-crore club members, Golmaal, 3 Idiots and Dabangg hit the high note. “Yes, the potential was there as Ghajini demonstrated but the star, genre and release period play a very important role in achieving mega success at the box office. It’s equally important that the content of the film has the ability to draw audience to the theatres during its run,” says Priti Shahani , chief strategy officer at Reliance Entertainment, which has had three back-to-back Rs 100-crore hits.

Where does the industry go from here? What kind of content will take films to the Rs 200-crore league? What formula from these 10 films will work? Four have been remakes of a successful South Indian film whose rights have been bought; one is adapted from a book while Dabangg, Golmaal3 and Don2 spin new stories. It could well be beginning of a transition that will redefine Bollywood as the industry that makes the most number of films to one that earns the most.