New crisis: Why Bollywood studios are shutting shop

Curtains for UTV Motion Pictures ring alarm bells for more

Disney India, that owns UTV Motion Pictures, announced that it was drawing curtains on its Hindi film production business, earlier this week.

According to First Post, this was preceded by months of speculation about the fate of one of Bollywood’s biggest and oldest film studios. Almost immediately after, there were reports that Balaji Motion Pictures is rethinking its film production business following recent nonstarters such as Great Grand Masti, Kya Super Cool Hain Hum 3.

Their latest release A Flying Jatt is headed towards a crash landing. Apart from the Arjun Kapoor-Shraddha Kapoor starrer Half Girlfriend, Balaji hasn’t sanctioned any new films in a while now.

Last year, after the debacle of Bombay Velvet, Hamari Adhuri Kahaani and Shaandaar, there were rumours of Fox Star Studios being in the red, but the success of Sonam Kapoor’s Neerja stemmed the tide for now.

In the last 16 years, many corporates like PVR, Percept Picture Company, Sahara One have shut their film studios but Disney/UTV has been the biggest one to bite the dust.

When corporates started setting up studios in the early 2000, they were supposed to right all the wrongs that plagued Bollywood. And, they did it to a great extent. There’s professionalism all around, processes are streamlined and financial transparency put an end to the underworld nexus that plagued the industry in the 1990s.

But movie studios came with their own problems, starting with top the management that didn’t necessarily understand movies or how to make them.

Most studios are headed by executives who have little to no film experience. They stumble at the starting block of the movie-making process when it comes to accessing the right script. As an old industry hand recently said, “Films can’t be made by MBAs on excel sheets. You need passionate and mad people to make movies.”

Films like Mohenjo Daro are bought by a studio (Disney in this case) because a director of the calibre of Ashutosh Gowarikar has a story that a superstar like Hrithik Roshan is interested in it. After that, it doesn’t matter what the film’s story is.

After a script is green-lighted, the next step is budgeting. A lot can and does go wrong at this stage. A film like Fitoor (another Disney production) was budgeted at approximately INR80 crore when it had a newbie like Aditya Roy Kapur in the lead and Abhishek Kapoor on the helm. Before this film, Aditya had had only two releases as a solo hero, of which only one was successful.

This decision is just as surprising as Fox spending a whopping INR84 crore on Bombay Velvet. Even on paper, there was no way that either of these films could recover that cost unless it turned out to be a sleeper hit, which it did not.

Studios tend to base a film’s budget not on the script but on profit projections. Films start making money even before they release and TV rights form a large part of that profit. What television channels pay depends on how a film will fare. So, a film with A-list actors and director would command a high price but if the film fails, that amount can come down by 50%.

Costs continue to skyrocket while yearly theatre collections dropped 6.7% in 2015. Trade insiders believe that many more studios that are in the red will either have to completely shut down or reevaluate how they make movies.

Published in The Express Tribune, September 5^th, 2016.

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