Why Disney would want to exit the Hindi film business

Factors like heavy taxation on the business, talent cost, and a spate of unsuccessful films since PK could be the reason

Urvi Malvania | Mumbai | August 26, 2016 Last Updated at 11:42 IST

At a television channel launch held this week, director, writer, and producer Zoya Akhtar mentioned that producers are bleeding money due to heavy taxation.

"Hindi films are taxed way more than Hollywood films. We pay an entertainment tax, which is logical. We also pay service tax. Are we a luxury or a service?" Akhtar said.

This sentiment is echoed throughout the industry, with analysts and producers alike. Recent media reports suggest that Siddharth Roy Kapur-led Disney India, which took over Ronnie Screwvala's UTV Software in 2012, may be shutting down the Hindi film business soon. UTV Motion Pictures, the movie production arm of the Screwvala empire, has been a consistent player in the industry over the past decade.

Sources reveal that the decision to pull the plug may not have been taken overnight, but something that the Disney global head would have observed and contemplated for some time. While Disney India refused to comment on the matter, the murmurs about the impending shut down grow stronger.

Since 2014's blockbuster PK, which went on to become the highest money grosser in Bollywoodever at Rs 340 crore, the film studio under Disney India has had a spate of hits and misses. While it struck gold with 2015's ABCD 2 (collection of Rs 105.7 crore versus cost of Rs 50 crore) and this year's Baaghi (collection of Rs 76 crore versus cost of Rs 38 crore), other films like Fitoor(2016), Saala Khadoos (2016) and Tamasha (2015) have failed to recover money at the box office. The company shut down its south operations a couple of years back when it realised that the south Indian market was not working as planned.

Perhaps the most significant miss among these is Hrithik Roshan-starrer Mohenjo Daro, which was released on August 12 this year. Made at around Rs 120 crore (cost to Disney according to industry estimates), the film managed to make Rs 56 crore in the two weeks since its release. "The film was very heavily front loaded, with talent fees making up a chunk of the cost and then the content did not fly. It's always a risk with big budget films and Mohenjo Daro is an example of that," observes an industry insider who has worked on big budget films.

The Hollywood slate on the other hand has worked wonders for Disney, with The Jungle Bookcollecting Rs 185 crore in India alone, and Captain America: Civil War collecting close to Rs 60 crore. Still left in the quarter is the Marvel Cinematic Universe's Doctor Strange (Hollywood) in November and Aamir Khan-starrer Dangal in December. The studio has Ranbir Kapoor- and Katrina Kaif-starrer Jagga Jasoos scheduled to release next year.