Wednesday, July 27, 2011

Ra.One Won't Be No.1, Here's Why...

By Anant Mathur (July 27, 2011)

I recently caught the theatrical trailer of Shahrukh Khan's Ra.One and I must say it didn't impress me one bit. Shahrukh's gravity-defying moves look fake and I for one don't like wired stunts where the action looks like a child has designed it. We saw similar action in Krrish and that too wasn't very exciting. When you're making a film that costs 175 crores, I expect never before seen action sequences and a great story. But according to what I saw in the trailer both will be a disappointment, it looks like a mix of the Iron Man, Terminator and Spiderman series.

Again, it's the budget that will make this film a loser for its distributor. In order to recover its cost the film will have to do a business of over 400 crores nett, here's why... The first week distributor's share is 50% of the nett collections, so even if Ra.One breaks all previous records for Hindi films and earns 120 crores nett (an impossible 1.5 times more than the current record of Dabangg) in the first week, the distributor only earn 60 crores. Week 2 distributor's share is 42.5%, let us stay positive and presume that the film only drops to 75% in collections and earns 90 crores in the 2nd week - the distributor's share is 38.25 crores - that's a total of 98.25 crores distributor's share for the first two weeks (almost twice as much as current record holder 3 Idiots). Week 3... considering the number of screens it will release on, by this time most people who still visit the movie theatres have seen the film and at best its collections will be 50% of the 1st week - third week's distributor's share is 37.5% which would translate the 60 crores nett collection into 22.5 crores distributor's share. 4th week onwards the distributor's share is 30% and again presuming that the film drops down to 30% of 1st weeks collection and earns 36 crores nett, the distributor's share comes to 10.8 Crores. After the first 4 weeks it's highly unlikely that the film will earn more than another 50
Crores nett theatrically in its life time (I'm being very generous here, the actual figure will be much less than that for week 5 and beyond) this would give the distributor another 15 crores. So lets add up all these numbers and being optomistic the most Shahrukh Khan's Ra.One can earn its distributor is... 146.55 Crores (far less than the distributor's cost of 175 crores). Of course all this depends on whether the film is liked by the audience or not, if not, then all these number will be much lower. Another thing to keep in mind is that Shahrukh is a multiplex actor, his films don't fare well at the single screen theaters, Dabangg and 3 Idiots did bumper business at single screens as well as multiplexes - the distributors get a larger share from single screens than multiplexes.

According to the above scenario the total nett earnings of Ra.One would be 356 crores and distributor's share would be 146.55 Crores. Even though this would make it the highest grossing Hindi film in history, 167 crores ahead of 3 Idiots (the current number one), it will not earn the distributor their money back. The first week's distributor's share of Dabangg was over 50 crores and the film cost around 45 crores including print & publicity - thus earning the distributor a profit in the first week anything it earned in the weeks following was more profit. Same was true for 3 Idiots. If the budget of Ra.One was 50 crores the distributor may have laughed all the way to the bank. But considering that no Shahrukh film ever crossed 75 crores in total nett collections, it's very difficult to believe that Ra.One can earn 400+ crores, in order to make a profit for its distributor, regardless of how popular SRK is overseas. 

The highest grossing 3 Idiots earned the distributor, a record, 99 crores nett - giving them 59 crores in theatrical profits. It's unthinkable that Ra.One would have the ability to almost double that, especially when the biggest of films average less than 40 crores as the distributors share each year. The only other exceptions are Dabangg whose distributor share was 77 crores and Ready which has just crossed 64.5 crores). My guess is the maximum Ra.One will earn for its distributor is 135 crores worldwide (45 crores foreign plus 90 crores domestic - that's if it manages a nett business of $25 million overseas then the distributor's share is 45 crores which may not be possible for a Hindi film) add to that 35 crores from satellite rights and the film would still fall short of the distributor's cost. I'm being very optimistic here but the truth is, with a cost of 175 crores, Ra.One has lost before it even gets to the theater. In Hollywood, a number of films have crossed the $1 Billion mark, but you don't see them increasing the budgets of their films to $1 Billion simply because a handful of films have earned that much, budgets should be based on what the market can sustain not the revenue one or two film have generated. Also, in Hollywood, films don't just generate revenue from Theatrical and Satellite rights a major chunk of it comes from DVD/BluRay sales/rentals, Pay-Per-View, Netflix, Merchandising, etc. - avenues that don't exist for Bollywood films. Again, when only one Hindi film has ever crossed 175 crores in total nett collections how can filmmakers consider making a film which costs so much - contrary to what these corporate distributors believe - the market for Indian films is not so large that a film will make 400+ crores nett to recover the 175 crores in cost. In fact, only 8 films in the history of bollywood have every collected more than 75 crores nett, so 400+ crores is an impossible target. When no film has ever provided a distributor a share larger than 99 crores how can they release a film that's costing them 175 crores. We also need to keep in mind that there have already been many films that have made over 50 crores this year, by the time Ra.One rolls around, people won't have the same cash flow. Distributors need to wake up and learn basic Math, so films have a chance at the box office.

They can market Ra.One internationally as much as they want by taking it to film festivals, etc., but non-Indians around the world are not going to watch a low class remake of Iron Man, Terminator and Spiderman. The main market is Indians across the globe, promoting it as an international film is a waste of time, effort & money.

Well, that's my two cents before the release of this future flop. Below is a link for the trailer, judge for yourself...

Deflating Ra.One... 
Ra.One Going The Enthiran Way?

© Anant Mathur. All Rights Reserved.

Wednesday, July 20, 2011

No Lifeline for Zindagi Na Milegi Dobara

By Anant Mathur (July 20, 2011)

It disappoints me when I see experts who have no clue of how a film's finance work share their figures. Contrary to what some websites and the so called experts are reporting - even if Zindagi Na Milegi Dobara earns 28 crores at the box office and 31 crores from satellite and music rights - the distributors still won't recover the 55 crores cost of the film. Here's why...

As I have explained in previous posts, it's not the nett earnings which define if a film is successful or failed, it's the distributors' share. So, in the case of Zindagi Na Milegi Dobara, if the film has earned 28 crores at the box office the distributors' share, at most, is approximately 15 crores (the rest is the exhibitors share). This means the distributors still need to recover 40 crores.

There's a trend of adding satellite and music rights to the revenues of a film in order to fool people into believing that the film is more successful than it actually is. Film are made for the big screen, if they weren't they would be released on Television first. Distributors who pay 55 crores for a film only earn it back from the theatrical revenues because the producers usually own the other rights. In order for the distributor (Eros Entertainment) to earn back the additional 40 crores Zindagi Na Milegi Dobara has to earn at least another 75-80 crores from the theatrical revenues - which is impossible in this case since nowadays it's the first weekend that counts. For Zindagi Na Milegi Dobara the first weekend proved fatal as it has failed to earn back it's cost. I've said it before and I'll say it again it very difficult for films with budgets over 25 Crores to make money in India. 

The recently released film Ready earned 69.5 crores in the first week and another 32.25 in the second week. Ready was also made for a smaller budget and cost the distributor 40 crores - the first week's distributors share was enough to recover the distributors cost (because single screen exhibitors share is less than multiplexes). Zindagi Na Milegi Dobara has to earn atleast 80-90 crores in the first week in order for it to have any chance of being successful, 28 crores just isn't enough.

Zindagi Na Milegi Dobara has no prospects and will likely earn another 20-25 crores before it ends its lifetime run. EROS Entertainment will lose a lot of money in this case and Excel Entertainment - the producers - who will earn the 31 crores from satellite/music rights and who likely sold the film to Eros for 50 crores are earning 50 crores from the distributor and 31 crores from the other rights. Excel has earned a total of 81 crores and their profit is probably more than 40 crores because I doubt it cost them more than 40 crores to make this film. Eros, meanwhile, has only earned 15 crores and need to recover another 40 crores. As usual, the producers are laughing all the way to the bank and it's the distributor who loses in the end.

© Anant Mathur. All Rights Reserved.

Monday, July 18, 2011

Analysis of the first 6 months of 2011

By Anant Mathur (July 18, 2011)

As usual again this year it's the budgets not the films that failed at the box office. 60 films were released in the first half of 2011 - far fewer than previous years - primarily due to the Cricket World Cup and IPL matches. Only 5 of the 60 films were profitable for their distributors - that's an 8.33 percent success rate. Below are the films that were released and their performance.

Yamla Pagla Deewana
Cost: 24 Crores
Revenue: 53.50 Crores (One Up Entertainment)
Distrubutor's Share: 30 Crores (approx.)
Profit: 6 crores
ROI: 25%

Tanu Weds Manu
Cost: 17.5 Crores (Viacom 18)
Revenue: 38.68 Crores
Distrubutor's Share: 20 Crores (approx.)
Profit: 2.5 Crores
ROI: 14.28%

Haunted - 3D
Cost: 10 Crores (Dar Motion Pictures)
Revenue: 25.60 Crores
Distrubutor's Share: 13 crores (approx.)
Profit: 3 Crores
ROI: 30% 

Ragini MMS
Cost: 2 Crores (ALT Entertainment)
Revenue: 10.86 Crores
Distrubutor's Share: 5.5 Crores (approx.)
Profit: 3.5 Crores
ROI: 175%

Cost: 45 Crores
Revenue: 130 Crores
Distrubutor's Share: 70 Crores
Profit: 25 Crores
ROI: 55.55%

Films that were able to recover their cost in the first half of 2011 include: 
F.A.L.T.U, Pyaar Ka Punchnama and Shaitan


No One Killed Jessica
Cost: 10-15 crores (UTV)
Revenue: 18.36 crores
Distrubutor's Share: 9.5 Crores (approx.)
Loss: 0.5-5.5 crores

Dhobi Ghat
Cost: 12 Crores (UTV)
Revenue: 9.63
Distrubutor's Share: 5 Cores (approx.)
Loss: 7 Crores

Dil Toh Baccha Hai Ji
Cost: 25-30 Crores (Wide Frames Pictures)
Revenue: 18.54
Distrubutor's Share: 10 Crores (approx.)
Loss: 15-20 Crores

Yeh Saali Zindagi
Cost: 10-12 Crores (Cine Raas)
Revenue: 7.27 Crores
Distrubutor's Share: 4 Crores (approx.)
Loss: 6-8 Crores

Patiala House
Cost: 40 Crores (T-Series)
Revenue: 17.84 Crores
Distrubutor's Share: 9 Crores (approx.)
Loss: 31 Crores

7 Khoon Maaf
Cost: 32 Crores (UTV)
Revenue: 15.17 Crores
Distrubutor's Share: 8 Crores (approx.)
Loss: 24 Crores

Cost: 50 Crores (EROS)
Revenue: 4.45 Crores
Distrubutor's Share: 2.5 crores (approx.)
Loss: 47.5 Crores

Thank You
Cost: 58-60 Crores (UTV)
Revenue: 42.25 Crores
Distrubutor's Share: 22 Crores (approx.)
Loss: 36-38 Crores

Teen Thay Bhai
Cost: 12 Crores (PVR Pictures)
Revenue: 1.57 Crores
Distrubutor's Share: 0.8 Crore (approx.)
Loss: 11.2 crores

Dum Maaro Dum
Cost: 33-35 Crores (Fox Star Studios)
Revenue: 22.65 Crores
Distrubutor's Share: 12 Crores (approx.)
Loss: 21-23 Crores

Naughty @ 40
Cost: 10 Crores (Srishti Creations)
Revenue: 1.51 Crores
Distrubutor's Share: 0.8 Crore (approx.)
Loss: 9.2 Crores

Cost: 10 Crores (Reliance)
Revenue: 1.91 Crores
Distrubutor's Share: 1 Crore (approx.)
Loss: 9 Crores

Always Kabhi Kabhi
Cost: 5 Crores (Eros)
Revenue: 2.5 Crores
Distrubutor's Share: 1.35 Crores
Loss: 3.65 Crores

Double Dhamaal
Cost: 40-45 Crores (Reliance)
Revenue: 45.12 Crores
Distrubutor's Share: 24 Crores
Loss: 16-21 Crores

Other Notable FLOPS during the first half of 2011 include:
Ashoka The Hero, Impatient Vivek, Vikalp, Mumbai Mast Kallander, Turning 30!!!, Hostel, United Six, Utt Pataang,, Angel, Kaccha Limboo, Masti Express, Satrangee Parachute, Yeh Faasley, Happy Husbands, Monica, Zokkomon, Chalo Dilli, I Am, Men Will Be Men, Shor In The City, Luv Ka The End, Love U... Mr. Kalakaar!, Stanley Ka Dabba, 404, College Campus, Hum Do Anjaane, Kucch Luv Jaisaa, Me Mamu & 7,, A Strange Love Story, Love Express, West is West, Bheja Fry 2, Bhindi Baazaar Inc., Bin Bulaye Baarati, Cycle Kick, My Husband's Wife.

© Anant Mathur. All Rights Reserved.

Sunday, July 10, 2011

Influx of New Talent In Bollywood...

By Anant Mathur (July 10, 2011)

Over the last couple of years I have noticed that the hype around Bollywood is dying down and Newcomers are popping-up in the industry on an almost weekly basis. Let's examine some reasons as to why this may be happening.
Firstly, with the country's top stars doing only one or two films each year, there has been a dearth of blockbuster released in the last few years:

Shahrukh Khan's last film was the box office flop My Name Is Khan (released on Feb. 12, 2010) it'll be more than a year and a half before his next film, Ra.One, releases on Oct. 25, 2011. He hasn't had a hit film since Rab Ne Bana Di Jodi (December 12, 2008).

Hrithik Roshan's last three films: Luck By Chance (January 30, 2009), Kites (May 21, 2010) and
Guzaarish (November 19, 2010) were box office disaster. In fact, he hasn't had a hit in the last 5 years. His next is Zindagi Na Milegi Dobara which is releasing on July 15, 2011.

Akshay Kumar, once considered a box office hero and only one of 2 top stars doing more than 3 films a year, Akshay has had a little bad luck with 12 flops in the last 3 years, perhaps that's why he has taken a break from Bollywood and his next is the Canadian film Breakaway (September 30, 2011). Akshay's last successful film was Singh Is Kinng (August 8, 2008) - Even Housefull (April 30, 2010) which many consider a hit was, in fact, a flop because the distributors lost a lot of money as with most hindi films only the producers made a profit because they got their money from the distributors prior to the films release, but until distributors are in the green a film can't be considered a hit.

Saif Ali Khan was last seen almost 2 years ago in Karan Johar's flop Kurbaan (November 20, 2009) his next Aarakshan is set to release on August 12, 2011 which will be followed by his home production Agent Vinod in Mid-December 2011. FYI, his last 6 films have been flops.

Ajay Devgn's last 2 films may not have set the box office on fire but he has had a decent run - possibly the only bollywood actor with 12 hits in the last 5 years. His next Singham will be released on July 22, 2011 followed by Rascals which is set to release on October 6, 2011.

Aamir Khan's last film was Dhobi Ghat (January 21, 2011) and before that it was 3 Idiots in 2009, his next film will be released in January 2012. Aamir has been on a lucky streak for the last 5 years, with all his films proving to be successful at the box office.

Abhishek Bachchan's last 4 releases have been super duper flops to say the least. Since Guru (January 12, 2007) junior Bachchan has had 12 flops and only 2 hits. We last saw him in Dum Maaro Dum (April 22, 2011) his next Players is releasing on December 23, 2011 followed by Dhoom 3 in December 2012.

Post Lage Raho Munna Bhai (September 1, 2006), Sanjay Dutt, has had 20 flops and only 1 hit in the last 5 years. He was last seen in last months flop Double Dhamaal (June 24, 2011) and will hit the screens again on August 19, 2011 in Chatur Singh Two Star.

Ranbir Kapoor's last film Anjaana Anjaani (October 1, 2010) was a super flop and his next one Rockstar doesn't arrive till September 9, 2011. Considered the next superstar by many industrywala's, this young lad has a lot riding on his shoulders.

Salman Khan's last two films, Dabangg (September 10, 2010) and Ready (June 3, 2011) have been super hits, but it wasn't long before that when he too had a string of flops - to be exact 10 flops and 2 hits in the 3 years before Dabangg. His next Bodyguard, a surefire hit, will release on August 31, 2011.

With the top stars of the country flopping at the box office film after film for the last five years (with the exception of Aamir Khan) the producers had no choice but to look elsewhere. Especially when the likes of Shahrukh Khan, Saif Ali Khan, Abhishek Bachchan Hrithik Roshan, Akshay Kumar, Ranbir Kapoor and Aamir Khan (argubly the country's top stars) are only doing films for their home productions or their close friends and have no dates for other prominent studios.

Let's take the top 10 stars of the country (Aamir Khan, Hrithik Roshan, Salman Khan, Shahrukh Khan, Ajay Devgan, Ranbir Kapoor, Sanjay Dutt, Akshay Kumar, Saif Ali Khan, Abhishek Bachchan - I'm not including the females because they usually do films with these stars), currently most are doing 1 film per year. 

This mean very few of their films are coming out. If all these actors do 1 film per year that's only 10 hindi films out of say 100 released each year. And for the other 90%, filmmakers need secondary stars or newcomers. 

A few years ago, before the corporates started throwing ridiculous sums of money their way and raised their salaries from a few lakhs to a few crores, the top 10 stars on average did 5 films per year. That meant they accounted for 50% of the Hindi film released. Secondary stars like Imran Khan, Shahid Kapur, Anil Kapoor, John Abraham, Amitabh Bachchan, R Madhavan, Arjun Rampal, Sharman Joshi, Riteish Deshmukh, Akshaye Khanna, Fardeen Khan, Shreyas Talpade, Neil Nitin Mukesh, Jimmy Shergill, Zayed Khan, Farhan Akhtar and the Deols starred in all remaining productions (which sometimes include female oriented subjects starring Priyanka Chopra, Rani Mukherjee, Aishwarya Rai, etc.). Now, with close to 40% of film left behind by these top stars producers have no choice but to approach newcomers since the secondary actors are still busy with their 50%.

Since the number of films produced each year is on the rise and the number of top stars remains stationary it's a no-brainer that producers look towards new talent. But in order for films to be successful there needs to be less films produced and more than one film a year by the top 10 stars so that they can last more than a week at the cinema hall. With less films the quality of films produced will also increase and the stories will get better or at least the bad ones will go away making the remaining few look good.

© Anant Mathur. All Rights Reserved.

Sunday, July 3, 2011

2011 IIFA Toronto...Big Disappointment!

By Anant Mathur (July 03, 2011)

With all the BUZZ and HYPE surrounding the 2011 Toronto IIFA Awards - one expected a brilliant showcase of Bollywoods best last weekend. Media was all over the awards for weeks before the event actually began - articles and ads were published daily in all the local and national newspapers including multiple page inserts in several papers describing Bollywood, it's history and it's superstars. A special gallery of lobby cards from past Bollywood films was organized at the ROM (Royal Ontario Museum). 

The organizers boasted that the tickets were sold out within a few minutes. Nothing less than a phenomenal show was expected by the crowd of more than 25 thousand gathered at the Rogers Centre. Alas, as with the movies that Bollywood has been churning out recently, even the 2011 IIFA's were a major disappointment. Everyone I have come into contact with who has seen the show expected a lot more than what they got and felt majorly letdown. Not only did the show start almost 2 hrs late it went on till 2:30 am including one 5 minute speech which lasted 45 minutes. Kanagana Ranaut looked dead in her performance, no energy and could bare move her arms and legs.

If that wasn't enough even the Green Carpet Ceremony was a huge disaster (can't call it red carpet because they're too cool and want to show their support environment plus I'm sure the cheap looking artificial green turf, not carpet, was easily available from the Rogers center). The carpet ceremony was so unorganized that most stars didn't even know which press person to go to for their interview and everyone from the stars to the interviewers looked dazed and confused not one reporter asked a decent question and the Big stars shyed away from the interviews all except for Shah Rukh Khan. 

Seriously, who wants to hear what Lisa Ray, Amisha Patel and Dia Mirza have to say anymore. Sunny Deol didn't say a single word, Sharmila Tagore and Dharmendra were completely ignored by the reporters, Hema Malini said two words, the hosts Bowman Irani and Ritesh Deshmukh were no where to be found on the green, Sonakshi Sinha, Malika Sherawat, Anushka Sharma and Priyanka Chopra was also amongst those missing from the green carpet interviews. Salman Khan, Hrithik Roshan and the Bacchan family didn't come. The reporters and in-studio analysts came across as too narcissistic. Why 90% of the show was devoted to Lisa Ray, I'll never understand. This was probably the longest carpet ceremony in the history of Award shows lasting 3 hrs with the only highlight being an interview with Hollywood star Cuba Gooding Jr. who was clearly having good fun.

Considering Ontario spent 15 million dollars on the IIFA event, the least the organizers could have done was provide a good show.

For more on 2011 Toronto IIFA awards please read the articles at the following links:

© Anant Mathur. All Rights Reserved.