India is currently grappling with a much more virulent second wave and has been trying to arrest the spread of the outbreak with vaccination drives and stricter curfews. However, if the measures taken fail to flatten the curve, parts of the country will be contemplating another lockdown. One of the worst-hit states, Maharashtra, which is also the financial capital of the nation and home to Bollywood, has already imposed Section 144 which restricts a gathering of people, thus canceling all planned shoots and also shutting down theatres once again. Night curfews and weekend lockdowns are also being imposed in other parts of the country.
This has thrown a spanner in the wheels of the industry that was warming up for a year full of releases, box office clashes, and blockbusters to make up for the dampener that was 2020. The first quarter saw quite a few releases, and a deluge of announcements, with producers booking festival slots for their respective films that had been waiting for a release for a year. With the number of cases on the decline and a vaccine discovered, the filmmakers were right in being optimistic about the future of the industry. However, the staggered vaccination drive that segregated people according to age, and the unexpected surge in cases, has now resulted in the trade dreading another prolonged lull at the ticket windows. Considering how theatres, which, with their seating arrangements, are the first to be shut down and last to open, when it comes to containing the pandemic, their pessimism is valid.
Leena Jaisani, Assistant Secretary-General and Head- FICCI Entertainment, illustrates the grim situation with figures. “As per the FICCI-EY report on Media & Entertainment Industry in India, 2021, the filmed entertainment segment declined by 62 per cent in 2020, and around 80 per cent across domestic and international theatrical revenues. Broadcast rights values fell 68 per cent due to fewer completed new films and business caution by broadcasters. At the same time, digital rights consequently grew 86 per cent to reach Rs 35.4 billion as films were released directly on OTT platforms at rates that compensated producers (wholly or in part) for lost theatrical revenues,” she informs.
However, the films that had already decided upon release dates from May onwards are still sticking to their guns. And this, in itself, is commendable according to filmmaker Vipul Amrutlal Shah. “Releasing a film in theatres is a brave decision right now, and any film that releases in theatre is a success already because they know the risks and are still going ahead with the release to bring the audience back to theatres in an effort to build the industry back. It’s not about their films but their contribution to our industry,” he asserts, his voice filled with pride.
But if the numbers–of films that managed to squeeze in a release in the brief window when the virus had relented–are any indication, replicating the figures of the pre-pandemic era will be very difficult for films that will brave to go with a theatrical release in the aftermath of the second surge. This is besides the films that will invariably opt to go with a safe OTT release instead of waiting for the 70mm any longer. Fifty per cent occupancy and the fear of contracting the virus might still keep films from achieving their true potential numbers, and with OTT not releasing exact figures, it will be almost impossible to measure just how well a film has done. In such a scenario, it seems imperative to change the barometer used to measure the success of a film.
For this week’s #BigStory, we spoke to trade analysts, producers, distributors, and exhibitors to understand what we should be looking at when it comes to declaring a film to be a hit in these unprecedented times. Interestingly, while the whole industry is on the same page when it comes to ruing the losses incurred, they have varied views of what will be considered to be a successful outing in the new normal. Read on:
Can success be measured?
Akshaye Rathi (Exhibitor): Return Of Investment is the only thing that can determine if a film is a hit or not
While it can be argued that success is intangible–and who’s to say that a film that received a lukewarm response at the box office won’t go on to achieve cult status, as proven several times earlier–the fact is that the art of cinema has always aspired for commercial acceptance. The film trade relies on every film to keep their cash registers jingling. Akshaye Rathi, an exhibitor, takes the lead to explain what exactly is the marker of a film’s success. “Return Of Investment is the only thing that can determine if a film is a hit or not. A film that manages to recover its investment and make a profit is successful irrespective of whatever the margin is,” he points out, adding that right now, expecting films to get massive numbers is close to impossible. “This is why Hindi and Hollywood films are not even planning a release in key markets. Tamil, Telugu, Malayalam films are releasing because their markets have opened up considerably,” observes Akshaye.
Tanuj Garg (Producer): The box office will never fizzle out in India. It’s here to stayTanuj Garg, a film producer who has impending releases, seconds this, adding, “I’ve always maintained that the box office will never fizzle out in India. It’s here to stay. These are unprecedented times so trends will be abnormal for a while. In terms of the Hindi film industry, I suspect that it may take another few months for the audience to get back into the theatres, especially till the vaccination for the younger age groups begins, but once that’s underway things will go back to normalcy. Until then, we will see some compromised numbers, which means that it’s going to take a lot more for a film to be termed a hit”.
Markers of success
Alok Tandon (CEO, Inox Leisure): The iconic Rs 100 crore mark will certainly never lose its sheen in the Indian cinema industry
Alok Tandon, CEO of Inox Leisure, has an optimistic view and doesn’t think the markers will change. “We are currently not operating as per our usually buoyant benchmarks, and that’s entirely understandable, but the iconic Rs 100 crore mark will certainly never lose its sheen in the Indian cinema industry and the legendary barometer will continue to hold its importance in the industry”.
Atul Mohan (Trade analyst): With the pandemic, almost 900 single screens may not reopen again
Trade analyst Atul Mohan offers an insight into how Bollywood has measured success over the decades. “In the olden days, the box office success was measured in weeks. Films that ran 52 weeks, 25 weeks, 100 days, 50 days, were considered to be successes. Then it moved to Rs 100 crore and Rs 200 crore clubs. However, now, with the pandemic, almost 900 single screens may not reopen again. Many multiplexes in smaller towns and those which are non-performers may also not reopen,” he muses, adding that the fate of the box office is still very bleak with the audience’s fear of going back to cinemas and restrictions on the occupancy in various states. “It is going to damage cinemas that are already bleeding so much.
Ramesh Sippy (Distributor): For the next two years, we might not touch pre-pandemic numbers
Distributor Ramesh Sippy reasons, “Anything that doesn’t make money is not a success. Just because a film earns Rs 300 crore, doesn’t necessarily mean that it has worked. If you buy a product for Rs 100 and then sell it for Rs 90 without even using it, it won’t be called a successful trade. Without taking the expenditure into account, it is difficult to measure success. Right now, you can only hope that when your film releases, all the variables are in your favour, theatres are functioning at 70-80 per cent capacity, and a lockdown isn’t imposed. There isn’t any particular meter to measure success. Currently, it is not about how much you earned, but how much less did you lose. You can’t refuse the Rs 90 you are getting for your Rs 100 product because after some time you might not get that as well. For the next two years, we might not touch pre-pandemic numbers”.
New normal for the box office
Leena Jaisani (Assistant Secretary-General and Head- FICCI Entertainment): Producers will have to find new data points to measure success
It’s clear that the tried-and-tested method of assessing a film’s performance might not hold in the new normal. Leena puts forth a valid point when she says, “While not perfect (or indeed certifiably authentic), box office numbers served as a good benchmark for producers, distributors, and exhibitors to base many decisions on. The historical data of similar films (in terms of genre and star cast) were important inputs in determining production budgets, talent fees, territory prices, show allocations, and more. However, with theatres either shut or operating at significantly reduced capacities in many parts of our country, and the end of the Covid crisis nowhere in sight, producers will have to find new data points to measure success. As theatrical releases are not being possible at a large scale due to less footfall in theatres due to the pandemic, it is right that box office data would not be able to gauge the performance of the film”.
Komal Nahta (Trade analyst): Even if films can manage to clock in 30-50 per cent of what they would have, it would be a big achievement
Komal Nahta, who tracks trade trends, doesn’t mince his words when he says, “You cannot burden a film with expectations of fetching a certain amount in a situation like this. We should stop discussing terms like Rs 100 or 200 crore for a while now. Even if films can manage to clock in 30-50 per cent of what they would have, it would be a big achievement, given the curfews. It is a futile exercise to put a number to this unless cinemas all over India open up”.
A trade insider, on the condition of anonymity, adds, “The media and critics will now have to look at the economics of the box-office with a new perspective. Films like ‘Roohi’ and ‘Mumbai Saga’, which released during the pandemic last month, made approximately Rs 22 crore and Rs 12 crore respectively. The films would have collected five times more than the amount in normal time. If adjusted for inflation, it would amount to approximately Rs 100 crore and Rs 60 crore, just like the all-time box-office collection of the most successful Indian film, ‘Sholay’, which amounts to Rs 15 crore, will be much more”.
Atul Mohan (Trade analyst): Today, if a film earns about Rs 25-30 crore, it could easily fall in the bracket of Rs 75 crore to 100 crore
Elaborating on the same, Atul avers, “A film like ‘Roohi’ and ‘Mumbai Saga’ earned very low numbers, and I don’t think anyone earned anything from the box office business. Today, if a film earns about Rs 25-30 crore, it could easily fall in the bracket of Rs 75 crore to 100 crore and if a film earned Rs 50 crore it would be considered Rs 125 cr to Rs 150 crore. It is going to be a long time before we return to normal days. If any of the bigger films like ‘Radhe’ or ‘Sooryavanshi’ that release in the initial phase of return to theatres cross the Rs 50 crore mark, we all should cheer for it because we are looking at the new trade paradigm. They are also necessary because it will be these films that can bring the audience back to cinemas and redefine the barometer”.
Murad Khetani (Producer): Once we get back to normal the business of cinema is even going to get better than what it used to be
Producer Murad Khetani agrees, adding, “In today’s scenario, if a film crosses the business of Rs 50 crore, it is definitely a good number but I know for a fact that once we get back to normal the business of cinema is even going to get better than what it used to be before the pandemic hit us. TV, satellite, or OTT–nothing is going to affect the theatre business it will always be the best viewing for cine-goers.”
A better future
Akshaye Rathi (Exhibitor): Business will be better than what it was in the pre-pandemic times because now, in addition to good storytelling, we will also put in a lot of skill into the film to make it a spectacle that calls for compulsory theatrical viewing
Akshaye is on the same page too. “It’s only a matter of time before everyone gets vaccinated and things return to normal, with theatres running to full capacity. There has to be a realignment in the commercial arrangement between exhibitors and producers that will make it feasible to release films more widely and frequently. ‘Sooryavanshi’ and ’83 will record the same collections as expected earlier, as the pent-up demand will work in the films’ favour like ‘Crack’ has become Ravi Teja’s highest-earning film in half a decade, and ‘Master’ has scored humongous numbers despite 50 per cent occupancy in Tamil Nadu. Most producers, who are right now on the drawing table, will consciously ensure their film has elements that will draw the audience to the theatres, and I can assure you that these films will register unprecedented numbers. The business will be better than what it was in the pre-pandemic times because now, in addition to good storytelling, we will also put in a lot of skill into the film to make it a spectacle that calls for compulsory theatrical viewing,” he predicts.
Komal Nahta (Trade analyst): Reduced profits from theatrical releases will be to some extent made up for by this extra revenue
Komal, meanwhile, thinks that in the current scenario, too, there is a way to maximise profits. “Instead of the eight-week theatre window, they might now reduce it to a four-week or six-week window, according to the understanding between the producers and exhibitors. Automatically, the price for digital or satellite rights is obviously going to go up. So, the reduced profits from theatrical releases will be to some extent made up for by this extra revenue,” the trade analyst estimates.
Ramesh Taurani (Producer): Cinema is a community viewing that is part of the culture and will always be
Producer Ramesh Taurani whose film, ‘Bhoot Police’ is slated to release in cinemas in September this year does not feel there is a need to redefine box office success because he feels that cinema will bounce back soon. “I really can’t say anything right now. Let a big film release, then only we can decide. I don’t think we need to redefine anything when a big film of big stars public will come back to cinemas,” he avers, citing the example of South films that have done extremely well at the box office in Covid times. “Vijay Sethupati’s ‘Master’ and Pawan Kalyan’s ‘Vakil Saab’ have become superhits so it is clear that if a big star releases their film here too, the audience will come back in a big way to cinemas. Cinema is a community viewing which is part of the culture and will always be,” he asserts.
Alok Tandon (CEO, Inox Leisure): New movies released in South India have reinstated our faith in the passion prevalent for cinemas
Alok shares in his positive outlook and supports it with facts. “Performances of movies like ‘Roohi’ and ‘Godzilla Vs Kong’ showed us that audiences are willing to turn up in big numbers for new and good quality content. We have seen all seats being sold with 50 per cent seating orders in place quiet a lot of times in the last two or three months, which showed us that movie lovers turned up even if they had to sit apart. Consumer behaviour hasn’t changed. ‘Radhe’ lovers would anyways turn up to watch the movie, and would watch it within the newly laid procedures, and therefore we believe that the movie will see its true commercial potential whenever it releases, regardless of the seating limitations. New movies released in South India have reinstated our faith in the passion prevalent for cinemas. The current situation clearly highlights the importance of a big blockbuster Hindi movie for bringing back crowds to cinemas,” insists the exhibitor.
Number crunching for OTT releases
While OTT platforms have emerged as an alternative to theatres in the pandemic, there are no numbers to prove how well have the films that preferred to not wait for theatres to reopen fared. As Leena points out, “Industry discussions and internet search data indicate that direct-to-digital releases did result in viewership spikes on OTT platforms, especially in smaller towns and cities, but this impact was not uniform across platforms, though net viewership continues to be much higher than pre-pandemic months. Accordingly, we believe that producers will continue to prefer a theatrical release window to optimize the revenue-generating potential of marquee film products. Audiences often crave the theatre experience for tentpole movies, big-budget, star-studded and larger-than-life extravaganzas.
Leena Jaisani (Assistant Secretary-General and Head- FICCI Entertainment): Lower budget films that can be enjoyed on smaller screens may increase their direct-to digital releases
Taking an informed guess, she further adds, “We believe that such films will continue to opt for a theatrical window to maximise revenues as and when there is an opportunity to do so. Lower budget films which can be enjoyed on smaller screens may increase their direct-to-digital releases and be more affordable for OTT platforms, and can become a parallel source of revenue for production houses”.
Akshaye Rathi (Exhibitor): To assess the success of a film on OTT based on social media reactions is being delusional
Akshaye gives his nod to this assessment. The exhibitor also believes that OTT content is more intimate, long-format, while on the other hand, larger-than-life spectacles that call for a community-viewing experience are tailor-made for the theatres. But unless these platforms share their numbers, he admits it will be difficult to accept a film releasing on OTT to be a success. “Unless OTT platforms share the number of views or subscribers, which they may or may not, it will be impossible to gauge the success of a film. To assess it based on social media reactions is being delusional because if that were true all you’d need to make a film a success would be to hire a good digital marketing agency,” he quips.
Komal Nahta (Trade analyst): Unless they show us the figures, their claims don’t hold any value
Komal, too, thinks that in the future Ask Komal how to know if a film has worked on OTT and he retorts, “OTT platforms are not sharing figures. They just term a film to be a success, but everyone thinks their child is the best-looking child in the world. Unless they show us the figures, their claims don’t hold any value.
Nitin Tej Ahuja (CEO, Producers Guild of India): One presumes that with this information, newer yardsticks to measure success will emerge
Nitin Tej Ahuja, CEO of the Producers Guild of India, feels that streaming services, with a one-on-one digital connect with the consumer, are even more measurable in terms of knowing exactly what the viewer watched and for how long. “One presumes that with this information, newer yardsticks to measure success will emerge. Having said that, from a producer’s perspective, it is critically important that theatrical revenues too start coming in. One hopes and prays that it will not be too long before, in addition to millions of streams, we are also celebrating hundreds of crores earned by films at the box office,” he concludes, on an optimistic note.