Why are films today not making money?

We have seen how over the last few months, almost all films except Happy New Year and PK have lost money for their respective producers.

Even films that may have just broken even are those who have sailed through, thanks to their satellite rights that have been sold in the pre-satellite crash market. We bring you our understanding of what has gone wrong and why it's important for the film industry collectively to course correct to make it remain healthy.

1) HIGH FEE PAID TO STARS:
Barring the last Aamir Khan, Salman Khan and Shah Rukh Khan films, big films with high costs have lost money . And the singular biggest factor responsible for that is high male star costs. The coming in of corporate biggies a few years back pushed up the prices paid to big male stars to a level, where even films having good content tend to today lose money for their producers as their cost is so high. The satellite unrealistic prices in the past have now been corrected and thus, can no longer be used to subsidise high cost films. Then there are films that have poor content but the cost paid to the stars and now, even to top directors, is so ridiculously high that they only land up benefitting them, but the producers lose their money . We believe that it is time for stars to either drastically reduce their fees in line with their box office delivery or better still, they take a token fee of Rs 5-10 crores and the balance linked to the box office performance. Big films need to move to a financial model where the star is a partner in the profit and loss of the film, as against just being the talent who is paid without any commitment to the box office numbers. A thumb rule that can be applied is that an actor should not charge more than his domestic opening box office number. So hypothetically, if a film opens at Rs 10 crore, the star should be paid a fee of Rs 10 crore.

2) REDUCE NONPRODUCTIVE COST TO A MINIMUM:
Apart from paying a star's fee, a producer is also expected to pay for daily wages of the star's staff. This cost could be as high as Rs 75,000 1.5 lakhs per actor per day . On an average, if a film takes 60 days to make and even 20 days of promotion with a minimum of two stars in a film, this adds up to 1.5 to 2 crores cost per film. That means that a producer needs to recover an extra Rs 3-4 crores from the box office just to meet the expenses of the star's drivers, makeup and hair stylist, helper boy and costume assistant. These are completely non-productive costs as they add to costs but nothing to the quality of the film. This practice should be stopped. Stars need to negotiate their rates with the producers such that they themselves can pay their staff whatever is required. It is my belief that once this practice starts, drivers will not be paid Rs 1.5 lakh per month as is the case currently , where a producer is required to pay Rs 5,000 to a driver on a daily basis.Then again, directors need to be conscious of the days they shoot. Shoot days need to be planned such that you get optimum work out each day and shoot days are kept to a minimum. We tend to shoot much more than what we require, as a result of which costs increase and films become longer, both being detrimental to a film's recovery at the box office.

3) NEED FOR FILMS WITH GOOD CONTENT:
The Indian audiences have evolved over the last two years substantially and the ticket prices, along with the price of vehicle parking and popcorn, have increased so much at a multiplex that a consumer needs to think carefully before making the choice to go and watch a film with his family .Time and again, we have seen how films with poor content have failed at the box office. We have also seen how films with great content work, be it films like Queen, Haider or Mary Kom. It is thus imperative for filmmakers to invest their time and money into selecting the right script and talent to make the film. We have consistently seen how mass entertainers with brain-dead content have stopped working, unless it has a Salman Khan or a Shah Rukh Khan in it. The producers thus need to look at big projects they greenlight carefully , keeping their final box office potential in mind.

4) TOO MANY RELEASES:
Currently , so many films are made which are neither good content nor have the money or window to be promoted. As a result, many small films with poor content tend to release on the same Friday and land up doing almost no business. We strongly recommend that such films should not be made and the money will be better utilised if kept in the bank, as such films get the producers neither fame nor monies.

Currently , while stars and directors seem to be making their monies irrespective of their box office performance, it's important for the industry as a whole to become healthy .Each and every one needs to become more accountable to ensure that the company or man, who puts in his money behind a film, must land up making money at the end of it and not losing it. It is a great time for Indian cinema. We believe that our film industry has big stars, great existing and upcoming talent, modern age writers and directors and above all, an audience that is longing for good content. Let's all give it to them keeping our costs in control, so that we can continue entertaining the audience and also making money from potentially one of the world's largest entertainment businesses. We are a country with the world's second highest population and over a billion people mad about cinema. Let's make the best of it.