Films can’t be made by MBAs on excel sheets: Why Bollywood studios are shutting shop

Karishma Upadhyay

Sep,01 2016 10:15 54 IST

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

This was preceded by months of speculation about the fate of one of Bollywood’s biggest and oldest film studio. Almost immediately after there were reports that Balaji Motion Pictures is rethinking it’s film production business following recent nonstarters like 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.


Films like Fitoor and Great Grand Masti have caused their producers great loses.

Last year after the debacle of films like 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 studio 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, it did that to a large extend. There’s professionalism all around, processes are streamlined and financial transparency put an end to the underworld nexus that plagued the industry in the 90s.

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

Most studios are headed by executives who have little to no movie making experiences. 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 told me, "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 caliber of Ashutosh Gowarikar has story that a superstar like Hrithik Roshan is interested in. After that it doesn’t matter what the film’s story is.


Hrithik Roshan's last two films have been Bang Bang and Mohenjo Daro.

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 Rs 80 crores when it had a newbie like Aditya Roy Kapoor 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 Rs 84 crores on Bombay Velvet. Even on paper, there was no way that either of these films could recover that costs 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 at the box office. 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 fifty percent.

Studios are single-handedly responsible for inflated star prices. In the initial years, every A-list film triggered off a behind-the-scenes bidding war between studios. It’s reached a stage where even if a film is a monster hit, like say PK, the studio ends up getting a miniscule percentage of that profit. But if a film fails, all the losses are the studios.

There is a large section of actors who take advantage of how starstruck and inexperienced studio executives are.

Imagine this scenario — Actor X is offered a three-hero project that has dud written all over it but the producer agrees to a fee is that thrice his market rate. Actor X agrees and recommends two other mid-level names. These two actors also hike up their price. This producer then will sell his film to a studio who will be too star struck to question the script or the actors prices.

The actors might be saddled with a dud but that doesn’t mean an end to their career and they would have walked away a many crores richer. Again, the only loser in this system is the studio. This happens more often than you’d believe.

The last few years haven’t been very good for the world’s most prolific film industry.

Costs continue to skyrocket while yearly theatre collections dropped 6.7 percent in 2015. It’s not surprising that film studios are baring the brunt of this. Trade insiders believe that many more studios that are in the red will either have to complete shut down or reevaluate how they make movies.

Published Date: Sep 01, 2016 10:15 AM | Updated Date: Sep 01, 2016 10:26 AM