Traffic passes the Regal Cinema in the Colaba area of Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

The Genesis Of A Perpetual Crisis In The Film Industry

BloombergQuintOpinion

This year has been rather good for the Indian film industry, especially Bollywood. Yet there seems to be a crisis of sorts with many unreleased films, numerous flops, and fear. This strange paradox exists and its genesis goes back to the 1980s, as I will explain later. However, things have really worsened in the last 5-6 years.

While growing at a healthy compounded annual growth rate of over 10 percent in the last 15 years, the market has hardly expanded. The main growth has come about because of multiplexes, lower taxes and higher realisation from overseas sales to the diaspora in key markets like the United States, Canada, the United Kingdom, and the Arabian Gulf. Rising cost of production, the huge increase in the number of films produced from 1,000 to 2,000 annually in the last 15 years, and the fall in the number of screens from 13,000 in the 1970s to 10,000 today have had a crippling effect on the industry. Of course, there are more compelling reasons why we are fast reaching a steady drop in the viability of cinema the medium itself.

In various forums, I have often spoken about the bullheadedness of film people, of which tribe I too belong. We have been tardy in adapting to change.

Insular and self-congratulatory, the film fraternity largely lives in self-denial. 

Every time a film does well i.e. makes a profit for everyone in the value chain, we think the worst is over. There was a time till the 1970s and early 1980s where cinema was the only medium of mass entertainment. It was perhaps the most dominant definer of the popular culture of post-independent India. No wonder Hindi films and film music played an important role in creating a new progressive, secular India which, even as it discovered a new identity, remained deeply connected to its traditions and cultural roots. Even in other languages like Tamil, Telugu, Malayalam, Kannada, Bengali, Marathi, Gujarati and Punjabi, cinema was responsible for social change and to some extent reinforcing old rituals and practices. Sadly, no government in independent India has done anything tangible for the film industry except lauding its role occasionally. As a large fraternity, we have too not done enough for our lot.

Also read: Superhero Blockbuster Aside, India Film Industry Ripe For Reboot

The Golden Age

The 1950s and 1960s are often referred to as the golden age of Indian cinema, in particular, Hindi cinema. This was the time where giants like V Shantaram, Mehboob Khan, Bimal Roy, Raj Kapoor, Guru Dutt, Chetan and Vijay Anand, Vijay Bhatt, Nasir Husain, Subodh Mukherjee BR and Yash Chopra, Hrishikesh Mukherjee made their best films.

Filmmaker V Shantaram at work. (Photograph: Twitter/<a href="https://twitter.com/NFAIOfficial">NFAI</a>)
Filmmaker V Shantaram at work. (Photograph: Twitter/NFAI)

This was also the time when the legendary Satyajit Ray and his collogues Tapan Sinha, Mrinal Sen and others led the alternative cinema movement. This was also when the biggest stars like Ashok Kumar, Dev Anand, Dilip Kumar, Raj Kapoor, Rajendra Kumar, Shammi Kapoor, Sunil Dutt ruled the silver screen; as did MGR, NTR, Shivaji Ganeshan, Prem Nasir, Rajkumar in the South, and Uttam Kumar in the East. Some of Indian cinema’s favourite leading ladies – Nargis, Madhubala, Meena Kumari, Nutan, Vyjantimala, Suchitra Sen, Madhbi Mukherjee, Sadhana, Asha Parekh, and Sharmila Tagore, Padmini and B Saroja Devi, were the heart-throbs. Naushad, SD Burman, Shanker Jaikishen, Salil Chowdhary, Roshan, Madan Mohan and Sahir, Shailendra, Pradeep, Majrooh, Kaifi, Shakeel, Bharat Vyas, Lata, Kishore, Rafi, Geeta Dutt, Hemant Kumar, Talat Mehmood, Mukesh, Manna Dey and Asha had the nation listening to their songs (and similar stalwarts in various regions).

The number of screens touched 12,000 by 1970. Cinema flourished as never before. This was the only mass entertainment, and millions of Indians loved it passionately. Films were the only glamorous escape from the mundane reality of existence.

The industry began its disorganised journey in those heady times itself.

Usurious interest rates and a deeply-entrenched star system, together with a haphazard distribution network made the business speculative and the success rate fell to less than 15 percent, where it continues even today. 

Commerce Takes Over

Formulaic films took root and crass commercialisation began to creep in by the mid-1960s. While we did have some outstanding films made during the period, there was a plethora of terrible films. A case of reverse-snobbery mixed with nostalgia has turned some of these bad films into cult classics today. There were other problems. Dubious money entered film funding in the 1970s. After independence, the old studio system had given way to independent producers-directors. There were obviously the companies floated by top stars but at least 100 other active producers existed in India. Another peculiar thing was the extreme shortage of raw stock (negative, positive and sound negative) which required a permit from the government, restricting both production and distribution. The import of film equipment virtually came to a standstill, and poor infrastructure became the bane. The work ethic and the working conditions were terrible. In desperation, filmmakers started drifting away from studios to on-location filming. A dwindling box office made the mainstream go commercial full throttle. Action superceded melodrama and stars strengthened their grip. Big budgets and multi-starrers came into vogue.

1970s saw the emergence of new stars like Rajesh Khanna, Dharmendra, Amitabh Bachchan, Shashi Kapoor, and Rishi Kapoor; glamour girls like Mumtaz, Hema Malini, Rekha , Rakhee, Zeenat Aman, Parveen Babi, Tina Munim; and new-wave actors like Amol Palekar, Naseeruddin Shah, Om Puri, Shabana Azmi, and Smita Patil. The South saw the arrival of Kamal Haasan and Rajnikant, Jayalalithaa, Jayaprada and Sridevi, as the Tamil and Telugu industries grabbed a big market share.

The cinema halls, ill-maintained, were suddenly looking rather decrepit even uninviting. While a few were renovated and fewer still opened, many more closed down. Sholay, in 1975, became the highest grossing film in history and Amitabh Bachchan became the undisputed king of Bollywood.

Posters of Amitabh Bachchan movies Sholay, Shaan, Shakti, among others. (Photograph: Twitter/<a href="https://twitter.com/NFAIOfficial">NFAI</a>)
Posters of Amitabh Bachchan movies Sholay, Shaan, Shakti, among others. (Photograph: Twitter/NFAI)

The Emergency was a big blow to all mass media. Cinema was not spared and draconian censorship rules were implemented. The first politicisation of an otherwise non-political industry began as Indira Gandhi and her son Sanjay Gandhi began to coerce filmmakers and actors to toe their line.

Many like Kishore Kumar and Dev Anand were victimised. Those who complain of loss of freedom today have not felt the palpable fear of those days.

TV And Cassettes: The First Brush With Technology

By the 1980s, the first technology wave hit Indian films. In 1982, colour television was introduced nationwide and private programming allowed on the only broadcaster, state-owned Doordarshan. In a couple of years, TV began to wean audiences away from films. In a further twist to the tale, a video onslaught through neighborhood video libraries renting out pirated VHS cassettes at Rs 10 became the cheaper and convenient alternative for millions of people all over the country. Small makeshift video parlours sprung up all over. Given the high rate of entertainment tax (and even central duty), cinemas found it hard to compete. With no technology upgrade, these dingy, smelly hot houses lost the patronage of the family audience. The audience profile of the theatre-going public shifted towards urban lumpen. This is reflected in the rise of action films and the underdog hero pioneered by Salim Javed in films like Zanjeer, Deewar, Trishul, and the films of Prakash Mehra, Manmohan Desai, and Subhash Ghai. To their credit, some middle-roaders like Hrishikesh Mukherjee, Basu Chatterjee, and K Bhalchandra continued their dalliance with the box office. Rising real estate costs led to thousands of cinemas shutting down. By the early 1990s, cinema was gasping for breath.

The emergence of off-beat cinema (the new wave of the 1970s) led by Shyam Benegal, Govind Nihalani, Mahesh Bhatt, Mani Ratnam, Sai Parnjapye, Gautam Ghosh, Amol Palekar, Vinod Chopra, Sudhir Mishra and others created its own small audience. On the margins Satyajit Ray, Mrinal Sen, Adoor Gopalakrishnan. Budhdev Dasgupta, Girish Kasrvaali, and G Arvindam pushed art cinema forward. Stalwarts like BR Chopra, Yash Chopra, Raj Khosla, Vijay Anand, Shakti Samanta, LV Prasad Manoj Kumar, Ramesh Sippy, Manmohan Desai and Prakash Mehra battled on even as many (Sagar, Chopra, Sippy etc.) opted to make TV serials like Ramayan, Mahabharata, and Buniyaad for Doordarshan.

TV audiences swelled to around 100 million by the 1990s when private channels like Zee, Star, Sony, Sun and CNN etc. were allowed. However, the reluctance of the film industry to accept the change in viewing preferences of the public further exacerbated the crisis.

I remember I was a solitary voice in the film industry leadership championing the legitimising the sale of video rights and of welcoming satellite channels as an additional source of revenue. 

Slowly, the number of screens came down from 13,000 to 9,000 and people started shunning watching movies in decrepit theatres. Meanwhile, some underworld money entered film financing through the illegitimate video and cable industries. Creating a scare among film producers and stars by intimidating them (and in a few cases actually shooting at them), underworld dons began to spread their tentacles. The fact, however, is that the total underworld money was always in a small minority and not what most anecdotal accounts mention. Somehow in spite of the magic of cinema, the zing had gone of the business.

A New Breed

Fortunately, a kind of revival happened in the mid-1990s. A new generation of actors led by the three Khans and a bevy of talented women including Kajol, Karishma and Kareena Kapoor, Pooja Bhatt, Preity Zinta, Aishwarya Rai, Sushmita Sen, and Manisha Koirala caught the audience’s fancy. Some organised players entered the game. I can say with pride that I pioneered the trend, in the company founded by me - Plus Channel, soon followed by ABCL, UTV and others. There was also a rush of money from the newly-started music labels like T Series, Venus, and Tips, who entered the lucrative audio-cassette market. As competition in TV channels heated up, film acquisition picked up and even the staid Doordarshan began paying top-dollar.

Then came a new breed of young filmmakers like Sooraj Barjatya, Aditya Chopra, and Karan Johar, who brought a glitzy look and feel to their films.

A poster of the 1995 movie Dilwale Dulhania Le Jayenge. (Photograph: Twitter/<a href="https://twitter.com/NFAIOfficial">NFAI</a>)
A poster of the 1995 movie Dilwale Dulhania Le Jayenge. (Photograph: Twitter/NFAI)

The big fillip to this makeover was the bright modern multiplexes and cinema-going was again trendy once again. These well-mounted films—usually with feel-good youngish stories—also rekindled the large diaspora market overseas.

Bollywood became a defining social trend of the new millennium trend.

By 2010, showbiz was on a buzz again as foreign studios sprang up, marketing became savvy, and the export market looked up. Many companies like Adlabs (Reliance Entertainment later acquired the business) Mukta, UTV, TV 18, PVR, INOX, and Padmalya went public and poured money into the film value chain. Institutional finance, private equity, and insurance came into play. Films began saturation releases and the business soon collapsed into the opening weekend numbers.

Over-production—India produces over 2,000 films in 20 languages every year—and a paucity of screens—only 10,000—along with a saturated release in 3,000+ screens simultaneously means that most films hardly survive a couple of weeks in theatres. The business became an instant bang-and-fizzle affair. Now, films are remembered from one Friday to the next and then dumped on various TV channels that run them on an endless cycle, or more recently on DTH and OTT platforms.

Footfalls in cinemas are falling for the last five years and the percentage of unreleased films has risen to an alarming 50 percent of the total films produced.
INOX, GVK One, Hyderabad (Source: Company Presentation)
INOX, GVK One, Hyderabad (Source: Company Presentation)

Also read: Regulator Asks Film Industry Associations To Stop Anti-Competitive Conduct 

Only the spectacle and the family-oriented romcoms with stars seem to score at the box office, with an occasional slice of life-film striking a chord with the audience. Dark and edgy cinema has no future on the theatrical circuit but perhaps on a platform like Netflix, there is a market for nice films, albeit made on small budgets. The share of regional films (and big Hollywood action films is rising by the day as Hindi films lose their domination. There are some bright young filmmakers, but they too seem to burn out quickly in their attempts to reach out to a wider mainstream audience or win awards. No doubt, the craft is far superior today and many of our technicians and actors are world-class but mediocrity rules. Unfortunately, most production companies have failed to grow the overseas market, catering largely to the South Asian diaspora. Aamir Khan, though, has capitalised on the big China market but that is restricted by a quota system there. Other producers are now venturing out to non-traditional markets but not with the vigour it requires.

Everything would still be fine if not for massive disruption of the digital and mobile revolution in the last decade.

Where’s The Money?

With hundreds of TV channels and thousands of Internet sites and a billion mobile phones and 300 million web-connected Indians have opened unknown and convenient entertainment options. Besides theatrical. Now OTT platforms like Netflix, Amazon, Hotstar, Voot, Zee 5, Jio, and Alt etc. are attracting audiences in big chunks.

The Genesis Of A Perpetual Crisis In The Film Industry

Also read: Can Netflix Beat Bollywood?

The rising cost of production and marketing and too many varying options like live events, gaming and social media too, are impediments for the growth of cinema audiences. With the advent of the digital technology, whole new worlds of online entertainment and now mobile entertainment have started to dominate the lives of the average Indian, especially the 15 to 35 demographic. Today IPL cricket matches (and other some other major sporting events) often attract more viewership than Bollywood movies.

Footfalls in cinemas are down for the fifth consecutive year.

This despite the fact that there are only 10,000 screens today as against 13,000 in the 1970s. The cost of production and marketing have doubled in the past decade.

As attention spans get shorter, and the mindscape gets cluttered with digital overload, fewer people will go to the movies. Sure, more people will watch movies at home on multiple screens but the family outings to the neighborhood cinema or movie dates will become rarer. One of the problems of the Indian film industry has been its resistance to change. It is always slow to accept new technology or business practices. There is no innovation, either in content or presentation.

Today’s films have better production design, look and feel, but even non-traditional plots are usually flattened out to make them fall in an accepted mould. The fact that TV and now digital screens are attracting more eyeballs is brushed aside as a passing phase. There is a patronising air about the non-theatrical exhibition of films. Most film people’s exposure online is limited to social media. Our presence on the international festival circuit has actually come down, as our filmmakers are happy at tapping the diaspora alone.

It is time that film people accept that conventional cinema has an expiry date which is just a few years away. No point in fighting imaginary windmills. There are some filmmakers and others in the film fraternity who rejoice every time we get a hit. They celebrate this hoax Rs 100-200 crore club. Let's not forget that of the total box office collections, 28 percent go away as the Goods and Services Tax, and 50 percent of the net collections go as cinema rental. Another 10 percent goes towards print and advertising expenses. Of the remainder, the 10 stars (in all languages) take away more than 50 percent.

So, in reality, what flows back to the producer/distributor is less than 30 percent of the collections.
A customer holds his tickets to view the first public screening of Walt Disney’s “Star Wars: The Force Awakens” on Dec. 16, 2015. (Photographer: Simon Dawson/Bloomberg)
A customer holds his tickets to view the first public screening of Walt Disney’s “Star Wars: The Force Awakens” on Dec. 16, 2015. (Photographer: Simon Dawson/Bloomberg)

Also read: Bollywood Streaming Service Looks Past Netflix Model for Growth

No wonder that of the 2,000 films made only about 20 make a substantial profit. Perhaps another 30 recoup costs and overheads. The rest end up with varying amount of losses.

It's not that narrative cinema is dead or no one will watch films in the future. It's only that the theatrical circuit will screen either large productions with compelling content accompanied by all the bells and whistles of 3D, VR, IMAX, Atmos Sound, and soon with other tech trappings. For the others, it will be other forms of entertainment – mostly live or digital/online. To succeed in this ecosystem we will need new tools of the trade and a new cinematic grammar. Those who cling to a Utopian notion of films only for the big screen are headed for a rude shock in the next decade. Digital filmmaking and distribution have made films of all kinds more accessible to more people than ever before. However, with too many choices and inadequate monetisation it’s a limited market. It's a winner takes all now. The others better think of alternatives or perish.

Wake up and smell the popcorn friends.

Amit Khanna is a writer, filmmaker, and media guru.

The views expressed here are those of the author’s and do not necessarily represent the views of BloombergQuint or its editorial team.