The Hindi film industry has changed beyond recognition in the last five years and to get a proper sense of this change one has to go behind the scenes and look at how movies are produced now. At the helm of this change is UTV which was acquired by the Walt Disney Company in 2012. Siddharth Roy Kapur is Managing Director (MD) of The Walt Disney Company India’s studio wing Studios – Disney UTV. From January 1, 2014, he will be MD, The Walt Disney Company India. Kapur loves the movies and knows the movies but foremost he is a hardnosed businessman. In this all-you-need-to-know interview he gives us the lowdown on the business of films in Mumbai.

 

 

An edited transcript:

 

WHAT IS A PRODUCER? 

 

I’m going to start with asking you how you define the term ‘producer’? Also how has the Indian definition been different from the West and how is it changing now?

Sure. I think the best way to define the term producer, really, is a creative catalyst. I think it’s someone who doesn’t get in there and do the writing or do the directing themselves but ensures that the creative people have got the wherewithal and all the means to do whatever it is that they need to do.

So I’d say that’s probably the best way to define it, you know, someone who makes things happen from the outside rather than sort of, rolling their sleeves up and doing the creative work themselves, but understands creative, has a point of view, has a commercial hat on and a creative hat on, is able to manage relationships, is able to manage crisis, is able to manage situations that need managing so that the creative people can just focus on getting the movie made. And then give the film the platform it deserves, market it and distribute it in the right manner and really take it forward and give it the scale that it deserves. So I think that would be the best way to define a producer.

 

And how, traditionally, has the definition been different in the West and in India?

I think the term producer in the West really refers to… In India you have got a combination, like we (Studios – Disney UTV) are, of a studio-cum-producer. I mean we’re a little bit of a unique model in that sense, where we’re a production house as well as a studio. Whereas the way it works in the West is really you’ve got individual producers who do the job of, firstly, raising finances, getting the whole creative team together, putting the whole package together of the film, talking to talent, talking to directors, talking to technicians and then going to a studio and selling it to a studio and then working on the best deal possible. That model does exist in India as well. But we follow a model where we produce our own movies and then we go out and market and distribute them. So, effectively, we are the producer as well as the distributor, or the studio. But when we’re doing co-productions with other talent or probably with another producer then it follows pretty much the same model as it is in the West.

 

Okay. Name three qualities that you think a producer must have.

Perseverance and tenacity. I think that’s one, sort of, joint quality. I mean, each term is different in its own way but it really talks about the same thing, which is going forth and doing what you need to. Also I’d say definitely a creative bent of mind where you’re able to understand creative people and able to understand creative work. And an understanding of the way the commercials (the commercial elements) would work where filmmaking is concerned. So I think it’s really these three things that might define what would make a successful producer.

 

WHICH FILM TO PRODUCE

 

How do you pick a script? And what at stage do you usually pick a script? What are the factors? Is trends one of the factors?

You know I think things like trends etc. come into the picture later once you’ve reacted instinctively to a script. I don’t think you can start off reacting to trends. You really react to the creative work. You react to the story. We actually come in early in the process where… I mean, one could be, of course, someone’s done a final screenplay draft and we’re reading it. The other could be that we really like a story, or we’ve read a newspaper article that we really like, there’s just a one line story idea that we really like and then we work with the writer to develop it into a screenplay. So it really depends.

 

You know, a lot of people have been talking about the aggregator-to-aggregator model. Is that something you guys are using as well? And how do you approach it?

What exactly is… I mean I haven’t heard that term before.

 

Basically when you pick a portfolio of films rather than picking up one film. Each one sort of feeds of the others, economically.

Right. Well, you know, we actually call it our slate of movies for the year. So when we’re building a slate for a year we’re pretty genre-agnostic. We make romance, comedy, horror, drama, historicals— any sort of film, as long as it’s entertaining and it moves us creatively. Sometimes we’ll go right, sometimes we’ll go wrong, but hopefully we’ll go more right than wrong. So that’s how we define our slate. We don’t define it by budget or genre or star cast or… you know… But we know that we’ll be making approximately 10 to 12 movies a year. We know roughly that maybe four will fall into what you call your ‘tent-pole films’ which are your big ticket productions. Four might be in the medium zone and four in the small zone but we’re pretty flexible about four becoming five or three or whatever. And that’s really how we do it. And then when we are going out on a business to business basis—if you’re going to broadcasters, you’re going to exhibitors, you’re going out to distribute your movie—I think the strength of your slate, as a combined entity, is really what they react to. And they’re like: ‘Okay, I’m getting all this great content from one studio. So obviously the commercial terms that I’ll negotiate with them will be in accordance with understanding that they bring a certain heft year after year.’

 

Okay. So you’re saying it’s roughly divided into big, medium, small films but you don’t say ‘Maybe this genre or that genre… ‘ Everything else is wide open?

Well we do and there may be a time when we realise that, you know, we don’t have any romantic films in our slate. But we’re not going to make one because we have to. We’re going to make one only if we come across a great script. But we will actively then try to develop one. And if we really like it, then that would be a priority to do. But it’s really defined by the sort of material that we are able to react to and…

So you’re a lot more open. So, for example, if you had already had a horror film and you were more inclined towards a romantic film but you came across a fantastic horror film you would go ahead and make it.

Absolutely. Absolutely. Absolutely.

 

You know, there used to be a way of talking about films which was ‘pre-Friday films’ and ‘post-Friday films’. I’m talking about way back where this depended on whether you could sell the film before it was released or not. Is that an outdated concept? The second question is, of course, the changing equations between distributors and producers and producers, like you said, turning distributors themselves. Of course, there are advantages. You don’t have to undersell, you get a lot more revenue. Are there any cons to it? Is there something to watch out for as well? What are your thoughts on that?

So, to your first question actually, where you talked about the pre-Friday and post-Friday, I wouldn’t quite say it’s an outdated concept. I’d say that probably still exists. You know, stars have a value and at the end of the day if your film is a film with a star, then you’re more likely than not to be able to pre-sell it. If it’s a film without a star and if it’s a high concept movie that is really being made because of your courage of conviction in actually making it then you’re more likely not going to find someone who backs your vision in the way you are backing it and you’ll be out there on that Friday figuring out whether you made the right call or not, not being able to de-risk. But the benefit of being a studio is, like I said, when you’re going out into the market with your slate and you’re going to broadcasters, they’ll invest in your slate of movies. So you might actually be able to de-risk in that sense. But if you’re an individual producer with a smaller film that doesn’t have a star cast you either might have to undersell because someone is only going to react to saying, ‘This is the genre of the movie, this is the director’s track record, your stars don’t have much of a track record. If you want me to buy a pre-release, this is all I can offer you.’ And then you’re probably better off, if you have the ability, financially, to withstand it, to go ahead and take the risk. You have made the movie, right? So you might as well take the risk all the way through.

To your second question, regarding producers turning distributors, the studio model in India used to be around in the twenties and thirties and forties. And after that it got fragmented once again and you had individual directors and then producers for those directors and then 14 distributors across the country paying you an advance so you could get your film made and then… But it has changed over the last decade or 15 years where you had Yash Raj really developing a studio model. You’ve had us developing a studio model and now we’re The Walt Disney company which is a studio. You’ve got Fox, you’ve got Viacom, you’ve got lots of players out there today who are effectively studios. So a few years ago, the fragmented distribution model was undergoing a change because there weren’t that many movies out there for individual distributors to go out and acquire. Having said that, today I think the water’s reached its own level where you’ve got smaller individual distributors in various territories who go out and acquire movies from studios at a price that the studio is happy to dispose it off at, because they’re able to de-risk at that point of time. So I think that’s something that every studio looks at tactically, on every film, where you’ve got a certain estimate of what you’ll do theatrically and if someone’s willing to offer you more than that pre-release you’d rather sell and repent rather than not sell and repent. That’s just the way that I think the studio would look at it.

 

EXHIBITOR ISSUES

 

Okay I’m going to talk to you a bit about exhibitors. I will come to the commercial end of it but this is purely on the creative level. How have the attitudes of the exhibitors changed, if at all, when it comes to films? Because, of course, a lot of studios, a lot of production houses, like your own, are making very different kind of films now. In your experience, the exhibitors here, in tier one, tier two cities— how have their attitudes changed? Have they changed enough? Have they kept up with the way production is happening today?

I think the multiplexes are pretty much on the cutting edge of knowing exactly what is going on. I think when it comes to single screens, of course, you have some people who might be old school and might think in a certain manner and some who have moved with the times and digitized their cinemas and are now looking at much more movies being released in their cinemas because of digitization. Whereas earlier, because physical prints were involved, studios or producers had maybe stopped sending physical prints to certain cinemas because the returns from there didn’t justify the cost of the print. So it’s a mix. But, having said that, today 60 percent of your revenue, whatever type of movie it is, is coming from multiplexes across the country. So the term that had been coined a few years ago, that it’s a ‘multiplex film’ is really irrelevant today because every film is a multiplex film in that sense. More than 50 percent of revenue of even a Rowdy Rathore is coming from multiplexes, which means that even your massiest film in that sense is still getting more than half its revenue from the multiplexes.

 

See that might be for several reasons, which we’ll come to later. One is digitization, which you mentioned. One is, of course, the screen density which is abysmal. But I’m talking about purely on an attitudinal level, on how they perceive cinema. Is that not changing? Because that can be a block in itself.

Well, it’s changing to a certain extent. But having said that, if you’re asking about whether they are open to looking at a smaller film, having reduced ticket prices through the week, being given a platform release and being allowed to grow and therefore being given terms in subsequent weeks which will be equivalent to the previous week’s terms because it’s the first week in that particular centre… things like that haven’t happened and I think you can’t blame them also, to a certain extent, because they’ve invested a lot of capital in building these massive multiplexes. The returns have got to be justified. They’ve got an installed capacity of ‘X’ number of seats and they’ve got to basically juice as much as they can from those seats. Now if they had to do that they would rather give more screens to a bigger film rather than giving it to a smaller film in its fourth week of release where they’re not that sure what’s going to happen. So, I think it’s a bit of chicken and egg and it’s really baby steps we’ll be taking as we go along making cinema like that towards everyone realising that cinema like that can also be commercial— which I think we’ve seen last year. Last year was really quite a watershed year in that sense. And I think it’s going to take its own time. So as long as everyone’s appreciating everyone’s challenges. I think it’s very important to do that because we can bemoan the fact that it’s not happening but the reason we’re able to distribute our films so widely today is because these people have invested hundreds of crores in building these massive multiplexes.

 

Now coming to the commercial side of it, INOX, PVR, BIG (Cinemas), they own almost 75 percent of the screen space in India today. Is an exhibitor’s strike like what happened in 2009 likely again and how far have the negotiations that happened in 2009 gone?

No I don’t think a situation like that is likely again. I think everyone today is dealing individually. Every studio is dealing individually with every multiplex operator and striking a deal that makes sense for them. I think it’s going to be dictated by supply and demand at the end of the day. And depending on how badly each one needs a deal, as I said, really water is going to find its own level, and a deal will be dictated by one studio talking to one multiplex chain and sort of doing a deal with them.

 

So you’re saying that this sort of stand-off, which is them versus us, is not likely.

I think it came to a flashpoint at that point of time and then there’s been a cooling off period after that and naturally when there are commercial terms involved there is going to be some friction, right? But that’s in any deal. I think you ultimately realise that they need to screen movies and you need to get your movies screened. So you will reach an understanding.

 

You know there has been a lot of talk of exhibitors wanting a base revenue of 30-35 percent. Distributors are not very happy with that, nor are producers. So what you’re saying is that this is not going to be a joint struggle anymore? This is more going to end up playing out on an individual level?

I think everyone is going to be negotiating individually with everyone, which is the way it should be in any free market. Really, the intention is not for any one side to join together and cartelise and start negotiating as a group because that’s just not the way it should work in any market dynamic.

 

And there are pitfalls in that as well. I mean you may be able to pull off a deal that a smaller producer may not be able to pull off. But if you are setting that standard. I mean there can be…

Except that’s the way a free market needs to work.

 

Sadly, yes.

There’s got to be competition. Otherwise, if you’re talking about everyone coming together every time, then you are talking about two monopolistic entities negotiating with each other which, I think, is against any rules of free market economy. So I think we’re all very clear. Everyone’s got their own scale and based on that scale if you’re able to reach commercial terms which are better than someone else, that’s just how it is.

 

Okay. Now a lot of exhibitors have also tried to go into production instead of going up. PVR has tried it. BIG has tried it. PVR hasn’t done as well as BIG has. But are tie-ups and consolidations like this the future or do you feel like there could be a stagnation if there is too much of consolidation of power? Maybe it’s too early to tell but…

You know, we haven’t even scratched the surface of how wide we can go with the number of screens in the country. So I think there has been a period of consolidation within the exhibition space but that’s only going to fuel the next level of growth. It has to. And things have to grow from here. And you’ve got other players. You’ve got Cinepolis which has come in and which is also making strides. You’ve got, as you said, you’ve got BIG, you’ve got PVR, you’ve got INOX. You’ve lots of other smaller multiplex players as well. You’ve got a whole plethora of single screens. So the consolidation has happened, there’s no doubt about it. But it’s happened in order for them now to be able to invest in future growth. So I’m pretty bullish about that happening actually.

 

REGIONAL FILMS

 

Okay. You know there is a notion that regional films tend to be more experimental. Do you feel one of the reasons is because the production costs are low or that they run longer windows at the box office— perhaps because they can be released in stages as Hindi films used to be released earlier. Do you think any of these factors contribute or do you feel it’s actually maybe not even true that regional films are more experimental?

You know there might be some truth in it when it comes to the more marginalised regional cinema. If you look at the big commercial regional cinemas like Tamil, Telugu, Malayalam, Kannada, they’re doing pretty hardcore commercial cinema and they do have the odd experimental film as we do, but I don’t see that much of a disparity. But I suppose if you’re looking at Bengali cinema, if you’re looking at cinema of that nature which has got a lot of crossover with Hindi cinema… Because you’ve got to look at cultures where Hindi is also a second language. Most Bengalis do also understand Hindi whereas in South India it’s just not where anyone would want to go watch a Hindi movie, because they don’t get the language. They have their own stars, they have their own star system. It’s different. So when that tends to happen, I suppose, the one route that they find they can use for their expression, creatively, is by making something that’s different. Because they are competing with a hardcore commercial Hindi movie which their viewers also want to watch. So if they want to make a Bengali film it’s got to be offering the viewer something different because they can’t offer them Ranbir Kapoor and Priyanka Chopra and Barfi!, right? And that’s a, sort of experimental but commercial Hindi film. So they might as well look at something so unique to their culture and sensibility that people really go and watch it because it’s something that appeals to their regionalism.

 

DEALING WITH STARS

 

I want to talk you a little bit about star prices. First question I’m going to ask you here is, how is the balance holding up of the draw that the stars get at the box office today and the kind of prices they command?

Well the draw is huge. I think there is no doubt about that. Stars are very, very important and stars do draw in audiences at the opening weekend, however the film is. Friday, Saturday, to some extent till Sunday, are dictated by star power, and then the film takes over from Monday. So I think that’s the reason they’re paid the fees that they are. Having said that, as I said, last year for example, you saw a lot of films that were star-less that did spectacular business given their budgets. So I think, right now, you’ve got an environment where both sorts of movies are working. If you look at Hollywood, their top 10 movies are without stars but that’s because they are still making massive, million dollar, blockbuster franchise movies. It’s not because they are making experimental cinema or non-commercial cinema without stars. They’re making blockbusters that don’t need stars anymore. I think we’re also going into a phase where we’ll have to both co-exist. You’ll have your big star-studded vehicles and they’re not going anywhere but you’re also going to have a whole different economy of films that are not star dependant, which is great.

 

In India what do star fees end up depending on? How does it actually work, to whatever extent you can share with us? Does it depend on their last release? Does it depend on the kind of director or producer they are working with?

I think it’s really supply and demand. So if you’ve got 10 saleable stars in the country and you’ve got many studios and producers and they are wanting to make many movies with them. Then there’s limited supply, there is massive demand, and the prices will be what they are and they’ll be dictated primarily by the stars. And obviously it needs to make economic sense in the overall scheme of things but it will be on the higher side. So that is just the way that the star fees are dictated in that sense.

 

You know there has been a lot of accusation that UTV initially, when they came into the business, they hiked up star prices because they were signing on so many people and they wanted so many. I want to ask you if it is still making economic sense. It’s not a question of are they overcharging or not, but is it affecting the economy in any way? Of course there are quotes from producers saying that almost 35 percent of a film’s cost ends up being star fees. There are also debates about whether they should pay their own staff more etc.— which means prices being hiked. So what I am asking is is it affecting, is it challenging the economy at this point or is it a comfortable balance?

Well I wouldn’t say it’s a very comfortable balance because the fact is that there is a certain value that you have to ascribe if you want to make a film with a star today and that just is what it is. Now the question is whether that’s on the back end, a sharing on the back end and maybe a lower payment upfront, or whether it’s an overall fee and there is no sharing in IP or on the back end. So star prices are definitely pretty high. But it’s interesting because it challenges you then to think of some vehicles with stars and some without. And we still have to make commercial cinema and that’s what I think a lot of us have been doing over the last few years. I mean we’ve made ABCD and Kai Po Che just this year. Both movies released in February. They did spectacular business for films without stars. But we’re also making films with stars, we’ve also made Chennai Express. So it just helps you to have a balanced slate that’s not completely star dependent but accepts that we are a star driven film culture. People love their stars on screen. And if you want to make commercial movies, we have to make some of them with stars.

 

Sure. That’s a given. That’s a given in any… No, I was just wondering if you feel that the way stars are thinking will also need to change. And I also actually want to do add that…

You know, why should it? If someone is willing to pay them a certain fee, I don’t see why they should change the way they are thinking.

 

Because of the larger picture? You know everybody is part of the …

I think we’re in a capitalist economy that is dictated by self interest. So at the end of the day everybody is part of the system where they are in it because they have certain ambitions for themselves. And I don’t think any of us are in here for social cause, you know, at the end of the day. So I think it’s fine.

 

Okay. Stars. You spoke about the back end of paying stars. A lot of stars are becoming producers. Either they are tying up at the back end and co producing a film or they’re turning producers in a full fledged way. Two questions here. One is, is the back end model a good substitute for having to pay upfront fees or is it more of a gamble? Two, do you feel stars bring in value to promoting a film? Say, John Abraham is producing a film which he is not starring in. Does he have an edge over other producers in promoting that film. I mean, is that a…

You know, honestly, Vicky Donor  was such a great film that I think it would have worked regardless.

 

Yes. Of course.

But John had faith in the film to put his name on it and get the movie made. So he added a tremendous amount of value in just getting the movie made. But, frankly, in the promotions, whether there was a video with John or not, I think would not have been that relevant because the film worked on its own. Now sure, if you’ve got the ability to have a music video with John in it and he’s promoting it, why would you not do it? He’s a producer of the film. Anything that’s going to sell. But honestly, when it comes to promotions for movies where the star’s not in the film, it can help but maybe not all that much. Except with someone like an Aamir Khan where the fact that he’s producing a movie adds so much value to it and so much dignity to it and actually adds a lot of commercial value to the project as well because there’s a certain brand that he’s built that stands for quality. And you always believe that: ‘Okay, if Aamir’s producing this film, we’ve just got to go on that first day.’ But, you know, other than that I think it’s pretty important for stars to back movies. And like if an Akshay Kumar backed an Oh My God! And it was a great thing that he did because honestly the business of that film would probably have been 15 percent lower of he hadn’t been in it. But it would still have been a massive hit.

 

And the back end thing where …

So back end. I think it’s a good model if the upfront fees actually do come down. I think if the fee is going to be higher and the back end is also going to be there, then it’s a bit of a self-defeating proposition. But I do believe that if someone’s willing to put their neck on the line and say ‘We want to put some skin in the game as well and we’ll be willing to cut our fee and earn from the profit. And we believe so strongly in the movie that we think that we will actually get much more than our fee because it’s going to be a really profitable movie.’ I mean, it’s something that Aamir does, something that Shah Rukh does.

 

SCREEN DENSITY

 

Okay now I’m going to come to the screen density. How acute is the shortage? I mean you know the numbers but numbers don’t really explain the on ground reality. It’s around eight screens to one million people as opposed to 117 in the US.

Yeah it’s around 130 screens per million in the US as opposed to 10 screens, 10-12 screens here in India.

 

And what I also want to ask you is why is the shortage so acute in a country where cinema is perceived widely to be the biggest thing?

I guess we live in so many Indias, right? And we talk about one India and probably this is not… I mean we shouldn’t be looking at screen density here because when you have got such a large proportion of the population below the poverty line I don’t think you can consider them as a denominator in that equation because they’re struggling to just make ends meet. So I think cinema really wouldn’t come into the picture there for them, right? So if you had to look at it that way our screen density is probably higher than is reported because we can’t look at the entire 1.3 billion population. Having said that, even if you look at say half—that are people who can afford a cinema ticket, a really cheap cinema ticket—it would still be abysmally low. It’s not that 3 Idiots  has not been watched by a vast proportion of the population but they’ve watched it on Doordarshan, they’ve watched it on satellite television, they’ve watched a pirated DVD and so on and so forth. So only three crore people have actually watched it in the cinema but a whole lot of people have watched it not in the cinema. A state like UP has a population of 18 crores and they’ve got 150 screens— that’s the sort of disparity in terms of screen availability. So as I said, I don’t think we’ve scratched the surface of that. And we have the burgeoning middle class with everyone getting richer and having more disposable income over the next few years. I do think we need to keep pace with the number of screens we are putting out there too. And as I said, I feel the exhibition sector… usually a market consolidates when it’s reached a certain level of maturity. I don’t believe we’ve reached that level of maturity yet to really talk about consolidation. So one or two players have bought each other and that’s fine. But I do hope that that signals the next phase of growth because it has to.

 

And I also want to get a sense of… we know, like you agreed, that there aren’t enough screens but I also want a sense of how acute is this problem? How fast does this need to give?

Well, you know what’s happened is that the metros have gotten pretty saturated. So there are many, many screens across your top 15 to 20 to maybe even 35 cities, but after that there is a massive, massive gap. And that’s really that tier two, tier three city that needs to be looked at in the next phase.

Which is what everyone is talking about right now.

Exactly.

 

Do you feel that that’s just about to happen? That’s just around the corner? Is that also something you guys are gearing up for in some way?

You know, I have to say, I don’t see it around the corner. I don’t think you’ve got players looking at that level of capital investment right now. But I’m hoping that they are bullish enough in the next few years to be looking at that as the next phase of growth because one player buying the other and maybe saturating the metros even more is not going to be an answer.

 

And everyone does seem to understand that?

Absolutely. I think the exhibition sector is acutely aware of it. It’s just that the economics for them need to work out. I think the real estate business has also been going through a bit of a phase right now where it’s been tough for them to make that investment in places in order for it to be justified in terms of the returns that they are going to be seeing from there. So it’s an interesting time. I’m pretty optimistic about it and I think that we are going to grow. But I can’t say I’m seeing something imminent in the next 12 months or so.

 

THE MULTIPLEXES

 

Okay. Multiplexes. Undue focus on multiplexes. I want to get a sense of how much or how that has distorted both the market and the content?

When you say undue focus…

 

As in, we are depending a lot on revenues from the multiplexes. Like you said, it’s not called a ‘multiplex film’ because every film is a multiplex film. This is a fact we all know but what has been the real import of this? How has it distorted the market or the content in any way?

I guess I think it’s been a positive distortion, if you ask me. The sort of cinema that was not getting backing seven or eight years ago has now gotten the backing because I think studios are seeing that, because of the higher ticket prices in multiplexes and because of the sort of people who are visiting multiplexes, I can make movie that’s maybe rarefied in its sensibility and still expect it to give me returns. So I think it’s actually helped cinema to a very large extent. So I don’t believe a film like Dev D or a film like Kahaani or a film like Gangs of Wasseypur would have gotten made if it wasn’t for studios now seeing that actually even if these massive multitudes don’t start thronging the cinemas, as long as in my key metros I’m able to get the multiplexes at a certain capacity, then I know it’ll pay out if I invest in this movie.

 

This is great and we’ve all been celebrating this, but isn’t there a sort of danger that the kind of movies… that if the economy is depending too much on multiplexes cinema might stop reaching out to other parts of this country?

See I’ll tell you what, if we’re talking about multiplexes in metros then I would agree with you. But multiplexes exist everywhere. A multiplex is basically more than one screen. Now that can be Bhilai or it can be in Bombay. Actually if you’re asking that if the exhibition sector focuses only on the cities, then there’s going to be less growth? Sure. Yes. There will be. But I’m looking at multiplexes going as far and wide as possible and hopefully looking at no frills options as well where you have a scaled down version of what you would get in a Bombay or a Delhi. It’s still a two or three screen multiplex and you’ve got decent seating and good air-conditioning and good projection and all that but it doesn’t have to be state-of-the-art like some of our cinemas are. But as long as they are looking at penetrating the heart of India, I’m fine with multiplexes going as deep as they can.

 

DIGITIZATION

 

Okay, digitization. Both in filmmaking and in distribution. How fast are we moving and are we moving fast enough?

In filmmaking, we’re moving pretty fast. I think most people now look at digital as a first option. It’s faster. You don’t need to light that much as you need to do for film. You don’t need to be obsessive about wasting raw stock. It’s just a great medium to shoot in. I mean as long as the director’s comfortable and the DoP (Director of Photography) is comfortable in that medium, then it’s something that everyone is exploring today. When it comes to distribution I’d give it another year and a half before we may not have a physical print which exists anymore. You might still be making it…

 

Well, that’s great news.

That’s great news.

 

Because there was a feeling, at least a year or two ago, that the initial cost might be a deterrent. So people may not have been looking at the larger picture when it came to distribution and when it came to filmmaking also, because they felt they had to sort of…

No, I think cinemas are definitely digitizing really, really fast and it’s happening very, very quickly. So I don’t see that as being something that’ll… It’ll be another nine months to a year and a half away and there might be only 20 physical prints of a massive film that we need to release all across the country.

 

And filmmakers and DoPs, they’re not worried about… you don’t feel like they are still not creatively hung up on film?

Some of them are. Some are. But if you look at, compared to two years ago, the number of people using digital today has gone up significantly.

 

Okay. And you feel like it’s keeping pace. That’s actually…

It is keeping pace. I think it’s the responsibility of everybody to really educate each other about the medium and about shooting on digital. Obviously now there is a certain charm to shooting on film and everybody’s going to be feeling that way for a while. As with any new technology that comes into the picture you tend to romanticise the earlier one. But I think as we go forward, I do believe digital will be the medium to shoot in.

 

CO-PRODUCTION

 

I want to talk a little bit about co-production. It seems to be picking up. I mean, at least, it seems that most films are co-produced at some level or the other. I want to understand how that works, especially for you guys. How does the revenue sharing happen and at what stage do you guys come in? And why is it so attractive? I think you should start with that.

So, I think, starting with the fact that movie-making is about looking for the next great idea or the next great story. And really, every deal then works its way around that proposition. So if someone comes to you with something superb and you really want to make that movie and it’s going to be… the nature of that deal is going to be a co-production because they are the ones who came to you with it. Then if there’s another production house, or their director, who also has a line production unit, then you are open to it because you want to make a great movie and if the economics work out, you are happy for it to be a co-production. On the other hand if you have got movies that you have developed and incubated yourself, then it’s your own production. So we don’t like to stymie our growth by saying we’ll only look at one model because ultimately we’re all in the search for great stories to tell. And if they are coming from a prospective co-producer, why not?

 

And you haven’t developed any sort of working model or formula for yourself that… you’re just open to whoever is coming in, at whichever stage the film is in?

Well, we prefer to be involved very early because I think the idea really is that we do want to add value to the creative process in a collaborative manner and in the best way possible.

 

Say like for a film like Udaan. You guys came in pretty late. I believe the film was offered to you guys in the beginning and then you came in…

Absolutely. Well I’m not aware of it being offered to us in the beginning but I know when I saw the rough cut, I hadn’t read the script before that, and when I saw the rough cut I loved it and we said that we did want to back it immediately. So, yes, that was one film we got involved in on the edit. But there are movies like… I mean Dev D  was our own production but I’m trying to think of an example of a co-production. So, like a film like Delhi Belly. That’s a film that Aamir showed us the script for. We loved the script and said, ‘Absolutely. We’re on.’ And we were on from the start.

 

And the revenue-sharing, the profit sharing, is there a set way which it works? Or is it like each…

So each deal is different. Each negotiation is different. So it really depends from deal to deal and depending on the deal that you strike with your co-producer. But we have one general template model and then that sort of undergoes modifications, depending on who you are dealing with.

 

DATA ON CINEMA

 

I want to talk to you a little bit about the information available. At least to an outsider, there isn’t good information available on how a film has done. You can’t trust the figures that you are reading. Or how much is being spent on a film. Do you guys have all the information that you need or do you guys have to go out and conduct your own survey?

It’s really unfortunate that we don’t have the equivalent of a Rentrak or an A. C. Nielsen in India and hopefully that’ll get corrected in the next few years. And that’s mainly because we’re still a 40 percent single screen market and data from there tends not to be computerised, it tends to come in bits and bobs from here and there. Some of it tends to be understated sometimes but that really depends on who you are dealing with. And no studio is obliged to share their information. Even if they are a public company you are not obliged to share your movie by movie figures with anyone. So people tend not to do that. So when there is this opaqueness involved…

 

Sorry, so then there is a case to be made for greater sharing at this stage when the industry is evolving.

I think it needs to come the other way around. I don’t think studios are going to do it voluntarily. But if everything is out there and computerised and all your theatrical business is out there on a server because that’s just the way the business has evolved and everything is there to be seen, that I think is the best way for us to go about it. I don’t think anyone is going to obligatorily share their theatrical information if they are not obliged to. But the moment we get into a Nielsen situation or a Rentrak situation where the figures are just available to everyone, that would be a nirvana situation I think for all of us.

 

AN OPTIMAL RELEASE

 

This is related to the information question. Have you guys been able to figure out your optimal release? How many screens should you release a film on and what is your maximum? Do you know your optimal or is that being impacted by…

Well, we think we do. We think…You know, it’s been 60 movies in the last seven or eight years. We’ve made mistakes and we’ve done things right as well and I think we’ve come to a really good understanding having mapped out the entire country and having mapped out the cinemas across the country. Which sort of audiences that frequent which cinemas for which type of movie, what our own numbers have been and now we’ve gotten a pretty decent amount of empirical data on our own films, across genres—big star cast, non-star cast—for us to come to an optimal release strategy which I think we’ve been adopting now for the last few years. On a film like Barfi!, for example, I mean a Ranbir Kapoor film can go to 3000 screens today. We decided to go to a thousand and we decided to build capacities, build a word-of-mouth and then go wider. And I think that was a really smart strategy because we didn’t overspend on prints and at the same time we got into situations where the film was housefull. And there is nothing like watching a housefull movie. When you are not able to get tickets it just adds to the word-of-mouth and it builds the interest and excitement around a movie, and then your movie tends to run much longer because of that positive halo around it. So I think we do that from film to film. And on a film like Rowdy Rathore we just went to 3500 screens because that was the nature of the movie. It was a really mass oriented film and we wanted it to go as far and wide as possible. So, yes, I think we do think of optimal release strategies rather than flooding the market with prints.

 

And you think you’ve built them irrespective of how much of data is available?

Yes, because we have done a lot of competitive mapping as well. I mean, one is obviously looking at every cinema in the country and looking at its capacity and looking at the business that we’re able to get from our own films obviously, as well as the information that is available out there in the market. So mapping that, mapping what other movies have done in the same genre of the movie that we are releasing and, yes, I think from all our trade sources we have managed to get a fair amount of data to take those calls well.

 

Okay, and what about when to release a film? What are the factors that go into that? I mean, are there seasons for particular films? And, of course, I also want to talk to you about conversations with other producers and distributors to avoid clashes— how is that working? How is that changing?

Well it’s really crucial. It’s one of those five or six really key factors that really affect the success of the movie. And, obviously, seasonality, cricket matches, school holidays, weather, religious festivals, non-festivals, Shraadh, Eid (Ramzan), all those obviously impact your release strategy across the year. Fact is that there are 52 Fridays in a year and you have 250 Hindi movies that will release every year. So there are going to be clashes; you can’t avoid that. But I guess you just have to pick the right dates for your movies and move on. And with the smaller ones you might have to be quite flexible about hopping from one release date to another depending on which other big movies are announcing. But with your bigger ones you tend to lock them in advance and then just not change them because once you’ve decided that’s the right date for your movie then you stick with it.

 

And are there conversations across platforms? Do you guys also negotiate with other producers and distributors?

Not really.

 

Or is it just about timing?

We just… yeah. And then I think everyone, if you take ego out of it, I think, everyone realises which film is a bigger film and then takes their own call about whether to clash with it or not. And I think that’s fair. As I said, it’s a free market.

 

And with the market changing and becoming a free market, are the egos going down as well? Because this used to be quite a major thing, the egos…

Well we’ve taken ego out of our equations completely. I mean we just take a decision based on whether it makes sense for our movie or not. I mean the movie is the most important thing. The movie has to work. Who cares if you’re moving your release date? No one is going to know, except the five people in the trade who are going to talk about you having gotten scared of this bigger film and moving your date. It really makes no difference to anyone. Everyone is finally going to look at the business of that movie and how well it did. And why would you because of your own ego not move a film if it just deserves a better release date? I mean, I can speak for us. We definitely are not in that situation.

 

HOW TO MARKET A FILM

 

I want to come to marketing, which is going to be a big section. Again, first I want to begin with information? Do you guys now have really good information on how marketing works and how much you should spend on marketing? Before we come to specific models, how much should you spend on marketing overall?

We have a really good sense of how much we should rationally be spending on marketing. What tends to happen is as you go into the media noise corridor two months before your release and you are competing pretty aggressively with maybe 15 other movies that are all shouting out at the same time, and not just competing with them but competing with all the other brand messages that are going on around you plus a fragmentation of media that has happened, you tend to have to attribute a little bit more to your marketing budget just based on… Say rationally I know should be spending this but I do need to shout out a little bit louder— that might on paper not make sense because I’m hitting my reach and my frequency parameters on my media plan. But I do need to shout out a little bit more, purely so that I can project my movie bigger.

 

And do you tend to use a lot of pre-release surveys to see how much information is available…

We do. We track our movies very, very closely. So we’ve got… we have a weekly tracking mechanism where we know how we’re doing on buzz and interest and on desire to see.

 

So basically what are the surveys? Are they talking to people and trying to figure how much they are aware of the film and how excited they are about the film?

Yeah. Yup. So you’ve got a many city survey that happens weekly where you talk to frequent moviegoers. So you should be someone who watches at least a movie a month in a cinema hall and you’re asked about spontaneously which are the movies you want to watch. So the movies that come to your mind are ones that you are not being goaded into answering about. And then you ask in an aided manner— ‘Have you heard of these films as well?’ and then you see what the responses are on that. And you ask about excitement to watch the film, whether you would go on an opening weekend or you’re going to wait to hear what people have to tell you and so on and so forth. There are five or six parameters that we look at. Each one gives you an indication of how well you are doing. So you might be high on the awareness of the film because you’ve managed to communicate your message to everyone but no one’s really that excited about it. Then you realise that your creative isn’t working. The people have seen it but they are like ‘Yeah, okay. I’m going to take my chances and go later.’ So then you need to build that. Or you might be really high on excitement with the people you have managed to reach but you haven’t managed to reach too many people, in which case you need to be able to take your media plan wider. So those are things that we are tracking everyday actually but we get a weekly report card on how we are doing and how everyone else is doing as well.

 

What are the big marketing trends right now? Is one of the trends spending lesser on big films with what happened on a film like Ra.One? So much money spent on the publicity. So much publicity that there is large section of people who believe that that is what worked against the film. Is that one of the trends? And, of course, I’ll come to the second trend which is bigger marketing for a smaller budget film— the Vicky Donor, English, Vinglish  kind of thing.

Sure. I don’t think there is a trend of spending less on bigger films. I have to be honest. I don’t think anyone’s doing that because I think the simple logic that a studio or producer would use is that: ‘I’ve spent 50 crores making this movie. Now am I going to scrimp on that final two more crores?’ Because in any case, there is a certain basic marketing budget that you need to spend and then it’s about, incrementally, to shout that much louder, it’ll probably take a couple of more crores or three crores to do that. So am I going to scrimp at that last stage or do I just ensure that the entire investment is not contingent on me being miserly about that last mile?

 

But again, it is about optimisation, not maximisation.

You’re absolutely right about that. I think what tends to happen is that you might believe that you’re optimised in your own environment but you have to realise that you’re dealing with people who are subjected to multiple messages every day. So you might think that you’re optimally reaching them with your message the right number of times but you need to look at the competitive subset that you are in. And the right number of times might not be the right number of times relative to the way someone else is reaching them.

 

So, I mean I know these are not your productions, that you are not qualified to comment beyond a point, but what could be your learning from something like Ra.One?

I think my learning ultimately would be that the film has to work. You can over hype and it can live up to that hype and there is nothing wrong with that. Or you can over hype a film and it doesn’t live up to that hype and then people are disappointed. But if a film works, then the marketing works. A film doesn’t work, then frankly everything is going to be seen in retrospect as, ‘Oh okay, they over hyped it and it didn’t work.’ But finally, you aren’t talking about a detergent, right? Which, if you do a blind test with someone with two beverages or two detergents, it’s all about the branding that you have created around it and frankly they might not see the difference in when they are using it. But a film is something that they are going to be going out there to experience. So it’s that much more important for them to really feel that your marketing has really lived up to your promise.

 

So you’re saying this is not so much about strategy as about the brass tacks of a film. Because I know Don 2 followed closely on the heels of that and they really cut down on the publicity of that because they were afraid of what happened with Ra.One. But you’re feeling that that kind of reaction is not really…

You know I can’t comment on what they did because I was not privy to it but I have to say… See each film is an entity on its own and you need to market it. I mean we’re very careful about the softer issues rather than how much we’re spending and the media plan. All that obviously will follow. But what are we trying to position the film as? What is the tonality that we’re using? The medium is the message also. Which medium are we using? Are we using social media more? Are we using TV more? Because, what type of movie is it? Things like that are very important to us and we need to stay true to the film while obviously emphasising all the great things about the movie. But it can’t be something so divorced from the film that there is a mismatch or a dissonance when you are watching it. That I think is the most important thing that we have learnt over the years.

 

And I want to talk a little bit about, again, one big trend that has been talked about in the market which is taking smaller budget films, spending a lot more, more than the cost of the film almost, on the marketing. How is that working out? Is that something that is working well? Or do you feel that it’s just a balance that has been reached for now and, maybe that also will start shifting? Maybe you won’t need to spend so much on marketing a Vicky Donor once people start to naturally gravitate towards films like this?

You know, honestly, I think you need to back a small film really aggressively, if you’ve made it. Because, ultimately, you’re making it because you believe it can work. And if you’re going to finally then not give it the promotion it deserves because it’s not a big film… you could have made a film for four crores and a film for 40 crores, that doesn’t mean the marketing budget of that film will be one-tenth that one because then you’d just be not serving the film that you’ve made at all. I’d say that there is bare minimum today that you need to do for every film below which you are just not going to be heard at all in the system. And that’s just how it is. And that can be significantly higher than the budget of your film in the first place but you’ve got to factor that in when you are making the film to start with. Which is why you have to be so careful when making a smaller film because you are completely reliant on the quality of the film. You’re not going to be able to pre-sell. You are not going to be able to get that opening weekend easily. So it’s really all about the movie at the end of it. And then you better market it as well as you can in order to ensure that people know about it and come and watch it. So it’s crucial, I think.

 

Again, opening weekend. Lot of focus. Much higher than it used to be in the last couple of decades. Is that skewing the trade in any way? Number one. Number two, is a Sholay  possible in this climate at all?

A film that will run for seven years?

 

No. A film that would pick up so slowly, almost being on the verge of declared a flop and then go on to become… (one of the biggest grossers of all time).

It’s tough. It’s tough. Because that’s just not the dynamic that exists today. I mean, you have social media today where the verdict is pronounced pretty much on Twitter by Friday evening. You’ve got the number of screens that you are releasing your movie in because you are also combating piracy and you want to ensure that you’re as widely seen as possible so that you don’t succumb to piracy. All of this just dictates that, by that Monday, the verdict is out and everyone’s… all the thought leaders have watched the film. If it’s a smaller film then it’s very important what the critics have to say about it. With a bigger film sometimes it’s irrelevant, sometimes it is. But a Sholay  is pretty difficult. I mean a film that’s not… you won’t get shows the next weekend if by Monday you haven’t performed and by Tuesday the exhibitors need to decide on the showcasing for the next week, which is how it works.

 

We’ve been talking about the free market economy. We’ve been talking about the capitalist economy we live in. But business ethics is one question that still holds. So marketing ethics. You spoke about how you market a film. Is that something you guys are grappling with? How you position a film? Or does it not matter? Is any publicity good publicity? How is that working out? That’s one thing. The other thing is, I know that pretty much tough luck would be the answer but where does this leave space for independent cinema? So even though digitization has come in and all of us can potentially make a film but then you stumble at that, ‘I can’t market my film for 30 crores or 40 crores.’ Then what happens? I mean I just want to get a sense of… I mean you might not be able to action anything. You are a part of the market but what are the business ethics that producers should be, or are, grappling with at this point?

You know, I think good business ethics will also mean good business. Honestly, I don’t believe any publicity is good publicity. It’s just not true. Because you can be in the papers everyday and people can be completely turned off what you are saying because you’re saying it in a very aggressive manner or you’re saying it in a way which puts people off or you’re talking about things so unrelated to the movie that it’s not funny. So I think there needs to be one round of questioning from everyone about… because you have got so many different avenues open to you to get your movie spoken about. I think we all need to just sit and introspect a little bit about what is it that we are saying because we can get whatever we say published or we can get it aired. But is that going to really help one more person say, ‘Oh, because I’ve seen (or read) that, I must go watch the movie on Friday’? I’m not so sure. So I think good business ethics really is about promoting your film for the film it is. And really if there is any way to get the message of the film across or the ethos of the film across in a way that’s going to help you on that weekend that’s good marketing ethics because then you’re really telling people the best part about the movie that you want them to watch. When it comes to independent cinema, I have to say we use this term independent cinema in India but it’s a bit of a misnomer because we’ve taken one term from the West and used it here.

 

You know what I’m talking about.

Every film’s been… they’ve all been backed by studios. You talk about any film that’s managed to get a release it’s been a studio film. So starting from our movies, from Khosla ka Ghosla  to Aamir  to a Dev D  to A Wednesday  to Mumbai Meri Jaan  to Udaan  to Kai Po Che, you know, any of these movies, they’ve been backed by studios so they’re not really independent. I think if you’re talking about really experimental stuff, stuff that’s so rarefied that it would really be a South Bombay, South Delhi, Bangalore, Calcutta experience… I think going to the exhibitors directly might be the best and tying up with an exhibitor and getting them to showcase the film in a way that they talk to their patrons about it. You trailer it there… (in those cinemas). I think one has to look at those ways. If you don’t want to go the studio route, which is perfectly legitimate, you go to an exhibitor directly.

 

So you’re talking about more local economies…

Because I’m assuming a movie like that might not be able to afford a budget to be on television. You might not be able to spend on television and be able to promote your movie in that medium. Trailering is much cheaper and it gives across the whole… you can do a two and a half minute, a three minute. It really communicates what the movie is about. So ensure that you do a fair amount of trailering. Go to one exhibitor probably, who’s got nationwide presence and do an exclusive date with them where they can give you one show per screen and then if it grows, it grows. It’s not easy and that’s just the environment that we’re in.

 

Any other things that you feel that everybody across the board needs to introspect about when it comes to business ethics and how they are shaping the market, overall, for the movies?

I think that the way the television industries were told to have their own standards and practices body and it doesn’t undergo certification or censorship. I mean a lot of us believe that there is regressive content on television and blah blah blah. It is not monitored by a government body at all. It’s just there and if you’ve got grievance with it you can contact someone and you can have yourself heard. I really hope that we can move into that for cinema as well. Just because we’re a more high profile medium doesn’t mean that we need to be subjected to certain certifications. I’m sure if everyone is just told to have their own models of standards and practices the way the broadcasters do, then they will get more responsible. If you just impose a responsibility on the person themselves to take that call then I suspect it’ll be a much healthier environment for us to be in. I don’t see that happening any time soon but…

 

CENSORSHIP

 

Actually that was going to be a later question but I’m going to ask it now because we’ve brought this up. There has been a lot of talk about moving into a system where movies are certified according to them being suitable for ages above 12, 15, 18…  A lot of filmmakers have not responded very well to that at all because they feel like that will cut down on the audience. Does that affect producers at all? Is that something that you’re concerned with?

Not if the guidelines are really cast in stone and are very clear, like probably the BBFC guidelines are in the UK where it’s very specific what is 12, what is 15 and what is 18. If it becomes arbitrary and really something so subjective that any individual body watching it can decide on that, then it will lead to even more chaos. Then I’d rather stick to what we have right now which is U/A, A and U because there at least you’ve got the three broad parameters and now through trial and error I think we generally know which direction we’re heading when we’re making a film. So if we impose a new certification there has got to be very, very clear guidelines. Having said that I think I have to say I think the Censor Board, which likes to be called the Certification Board, because they’re not the Censor Board, has made quite a few strides in the last few years and you have to hand it to them. They are not in an easy situation. They are having to deal with any fringe group coming and protesting, going to the MIB (Ministry of Information and Broadcasting) and the MIB clamping down on them because they passed the movie. And at the same time, they’ve got to deal with the irate fraternity which is always questioning things and trying to push the boundaries. So, they’re in a tricky situation purely because they’ve been, the way that they’ve been legislated as a body. Having said that, I do believe that we need to be more progressive, even more progressive than we are right now. And I think we need to accept that if you’re giving someone the right to vote, they should have the right to watch what they want to watch. If they can elect their own government, they should be able to watch a movie and decide whether they wanted to watch it or not. If there is something misogynistic in the film, something that is just beyond the bounds of what is permissible in a society, that’s something that one should be looking at. But, really, I think we’re in a situation now where we should be able to watch a film we want to see considering you can watch whatever you want on the internet and that’s completely free.

 

THE OVERSEAS MARKET

 

Okay, in the nineties, there was this whole conversation about the NRI film and the NRI markets to the extent that there seemed to be such a great discovery of that market that it started to dictate content in a lot of ways. Has that balance been restored or is that focus still pretty much there? How much are we depending on overseas markets right now?

You know the overseas market for a small film is pretty much non-existent because you’re talking about the diaspora. You’re talking about the 30 million South Asians overseas and trying to reach out to them. For a big film, it would probably be 10% of your overall revenue, which is significant, but when you compare it to domestic theatrical which is 50-60%, it’s a small part. So I’d say we’re probably you know… it was an interesting new phenomenon in the nineties because it had opened up as a market and therefore it was being spoken about. Now you have reached a steady state of that being the contribution. You’re dealing with rampant piracy, especially overseas where you have got massive bandwidths where people can access movies and sort of download them really fast and you’ve got your movie available on Friday evening on a bit torrent site regardless of what sort of movie you’ve made. So you’re combating massive piracy and the fact that you still have a worldwide release of only 500 screens for 30 million people and they’re going to want to watch a Hindi film because they are as movie obsessed as their brethren here and they’re going to go online and download it. Because you’re not giving them a legitimate way to see it. You also can’t have it available legitimately online on the day and date of the release because that is just not something the exhibitors will accept. So it’s a bit of a chicken and egg overseas where we haven’t, again, scratched the surface of that market. But till we enter new markets at least through, maybe through free-to-air television and get our movies shown there and then move on to other platforms and then to theatrical, it’s going to be a slow process. But it’s something.

 

Are they any new emerging NRI overseas markets? Which ones are the biggest ones right now?

There is… you’ve got the usual suspects. There is the US, there’s UK, there’s Canada, Australia, New Zealand and the Gulf. Those are your key markets, that comprises maybe 80-90% of your total revenue. South America we have not ventured into at all. We’ve released a couple of movies in Brazil and Peru but that’s really a one-off and depending on if you’ve found the right film that the distributor wants to distribute. Africa is pretty unexplored other than South Africa and maybe a few other markets.

 

But that is a huge potential isn’t it?

Massive. Massive potential.

 

Africa, yeah.

It’s a bit of a function of the economy there also where the whole went into a depression and therefore the exhibition sector suffered, movie prices went down by one-fifth. Europe, again, is important. France, Germany, a lot of the Eastern-European countries. Then down in the Mediterranean you’ve got Turkey, you’ve got interesting markets where you’ve a got a South Asian diaspora. Russia is another market which has been largely unexploited since the fifties and the sixties. Japan, Taiwan, Korea, these are markets where we are releasing our movies much more. China, of course, suffers from regulations about a certain number of movies that can be released. Then the South Asian markets of course, massive South Asian population, we know that but not as widely exploited as it can be. So there’s a lot of work ahead.

Very diverse markets, so you can’t answer it in a holistic way but some key ways in which the marketing differs for overseas market than it does here?

A lot of online. We use online quite extensively because that’s where our people are and we can’t afford mass media for those markets. We use a lot of localised platforms. So local radio stations, local newspapers for the South Asian population, local television stations and we go into catchment areas. So we know there are certain catchment areas where, you know, there are South Asian populations existing— leaflets and flyers and door-to-door marketing.

 

What about non-NRI overseas market? Where are we on that?

Nowhere, honestly. I don’t think Indian cinema has really crossed over at all. Some of our movies are watched a little more widely than others. We probably have some directors who are known within a certain section of those who watch world cinema but honestly I don’t think we’ve really made too much progress.

 

But which way does the progress need to happen? Do films need to get up to par? Do we need to be making enough films? Or do you feel like you need to start exploring exhibition possibilities and then create awareness?

It’s a combination of both and I guess we’ve tried it with some movies. It’s debatable whether they were the right movies or the wrong movies. With a film like Peepli Live  which we believed was a satire, it has some resonance in terms of being able to reflect what’s going on in India, is tongue-in-cheek, but might be appreciated by a world cinema audience. We did a delayed release in the UK but probably it was too delayed which is why it didn’t work as well as it could have. It worked well but not as well as we would have liked it to. With films like Barfi! we are entering into markets like Japan, like Korea, like Taiwan, like Turkey where the film is going to be watched by an audience broader than just the Indian audience. So there is progress being made but it’s really negligible when you look at the overall revenues of the movie right now. So we’re doing it for our movies but we haven’t had that one massive crossover hit like a Crouching Tiger, Hidden Dragon was for Taiwan. We’ve just not had that.

 

Okay, now that Disney has tied up with UTV, acquired UTV what potential new avenues, what possibilities, are you looking at whether or not you end up exploring them?

It’s a huge, huge, huge opportunity.

 

Tell me some of the possibilities that are on the table right now.

One is the distribution, just tapping into the global Disney distribution system, which we’re doing very actively right now. And, I mean one doesn’t want to speak too early and we just want the results to show but that’s something that we are looking at very actively, getting our movies distributed as widely as we can using that infrastructure. And two is obviously creating franchises here in India. We haven’t really had Indian franchises yet. We’ve had sequels but a franchise is something that goes beyond a movie and that goes beyond the ancillary rights around a movie. It goes into other spheres altogether. We haven’t had that yet in India and I think we’re ripe for it now. So using the Disney creative learnings across the last 80 years and to begin to tap into that.

 

Are there also conversations about the kind of films that you are producing? You know we still primarily make movies for our market and the South Asian population. So is there more of a chance of making films that might work across the board? For the lack of a better example, a Slumdog Millionaire, is that possibility very…

You know I think you need to root a movie somewhere.  Slumdog Millionaire  didn’t work in India and it was obvious why. It didn’t speak about the country as we know it and therefore we rejected it as an audience but obviously it did gangbusters business everywhere else. We’re looking at movies that work for India. We’re very clear about our objective. We want to make Indian movies that work for our people. Now if by their very nature they transcend just a South Asian population and are able to go wider? We’d always have an eye on that, that’s something we will look at. But it’s really important to root a film and know who you are making it for. And if you’re working with filmmakers who have a sensibility, just naturally, where the grammar of their cinema is, and it will travel, that’s great.

 

SURVEY BASED FILMMAKING

 

We spoke about surveys earlier. There are a whole lot of other kind of surveys being commissioned. There are surveys being commissioned at the development stage, before a film, to kind of try to figure out what kind of films to make. Then of course during the making of the film. Now that is something that intrigues me. We’ve heard of instances where even with something say like Oh My God!  there was a survey and people saying “Oh, we want to see god as god.” (They wanted to see Akshay Kumar, playing Krishna, dressed as Krishna was depicted in mythological and religious portraits. And so he was dressed like this in a climactic scene.) and therefore there are changes made… So where are you guys with that? Is there a conversation about where to draw the line because, like you said, that if you start influencing creatives enough… It’s also important for the creative industry to grow on its own. So what is the tricky balance with that?

I think Steve Jobs said something really interesting once, he said that research is all fine but someone’s not going to be able to tell you what they want till they get it. Because if you want to give them something new, they’re not going to be able to tell you what that something new is. When you give it to them, that’s when they are going to say: ‘Wow! I can’t do without this anymore.’ Right? So I doubt that anything breakthrough or path-breaking creatively is going to come purely out of research, right? Having said that, if you immerse yourself a little bit in just trends and what’s going on, in lingo, just understanding new interesting things happening in society and just keeping your ear open and eyes open to reading more about it, just interacting with people a bit more and that sparks a creative thought, I think that’s the most important research a creative person can do. Right? But the ideation of that insight to the story that really needs to come from there. I think it’s really important.

 

But I was talking about the surveys that are being commissioned by producers while the film is being…

I can speak for what we do. We’ve tried script research before. It hasn’t quite worked because I think it’s very difficult for an audience to envision a film the way that the director is envisioning it. It’s not their job to do so. Where research comes into play for us really, in the filmmaking process, is at the rough cut stage where we have a director who we’re creatively collaborating with who also buys into it. And we say, “We all have certain views about the film. Let’s just show it to people.” And here I’m not talking about friends from the industry, trade etc. because then everyone is a little tricky about giving their honest opinion. I’m talking about proper structured research where you have 20 people who represent the rough target audience and they just watch the film and they have a chat with a moderator after that. And the director is sitting in another room and just watching it on a close-circuit television and ten things might come out of there. We do it across various cities. Not that we learn what to discard and what to take on because people can have very individual, very subjective opinions on something that is not relevant, but maybe two or three very important themes are coming through about the beginning of the film, about the character and about a certain motivation and about the end. Those are the things on which we then sit and we have really important discussions.

 

What are the things that you are likely to more do it for? Are you likely to more do it for, say, genre films because that’s fairly new in India?

We’d like to do it for every film that we’re working on but we’re very sensitive about the people that we’re working with. So if we’re working with a director who is completely closed to it we won’t get very far and we don’t like to exercise final cut because that’s just not the way we like to operate. We want to creatively work with people and we do believe it’s a director’s medium ultimately. So if it’s a director who’s open to feedback and is very happy to get test screenings on board, then that’s something that we would do. But maybe it’s a cut we’ve all watched and we really like the way it is and we decide that actually whatever research tells us this is the movie we’ve made, this is the movie we want to go ahead with— then we take that call. So really there’s nothing that’s cast in stone. I do believe it can’t hurt if there is trust on both sides. The director and producer trust each other enough to know that whatever comes out of it we’re going to sit together and we’re really going to have a proper discussion about it and not get swayed so much that we’re going to take…

 

So you’re saying that basically it’s just another aid. It’s not something that…

It’s not something that’s going to make or break our decision on the film.

 

REGIONAL FILMS 2

 

Fair enough. You guys have made, what, five regional films, backed five regional films last year?

That’s right.

 

Where is that going? Are you guys looking at making more regional films? Is the concentration, focus more on South India? How is that working out? Is that the way for all distributors, producers to go?

See, I think if you want to be a truly pan-Indian studio then you need to be doing more than just Hindi cinema. I think it’s important. Having said that you also need to accept that you don’t know that sensibility at all. You could make a movie in China for all you know and you know it as much as you know a Tamil film. But you have to learn it and learn it in a systematic manner and first accept that you don’t know anything. And then go in there and start making movies that you sort of believe in, that probably are less risky than the other ones because they’re star driven, they’re proper commercial movies. Some will work, some won’t. But I think the first thing is to just seep yourself into that culture. So we don’t want to spread ourselves too thin. We’re doing Tamil, Telugu, Malayalam… That’s what we’ve started with and for the next couple of years I think we’ll be focusing on that.

 

And do you have to shift operations in a big way there? Do you need to have a completely…

We have a set-up there already. So we have our head of the South business and he’s got offices cross Chennai, Bangalore, Hyderabad…

 

Okay, you will be looking at other regional films? Marathi?

We might. As I said, those regional cinemas that have an overlap with Hindi are ones that are much less lucrative, in a sense, because they are not really cinemas that have potential to grow that much because the same audience is also watching Hindi movies and is quite happy to watch a Hindi movie. The South is interesting because it’s a different audience altogether. Hindi movies just don’t do much business in the South at all. So it’s a different cinema. It’s a different set of stars, it’s a different system, a different operation altogether.

 

SATELLITE RIGHTS, MUSIC SALES, MERCHANDIZING, LICENSING AND OTHER ALTERNATIVE REVENUE SOURCES

 

I want to come to satellite rights. There is a lot of talk about how movies are actually sold. And what movies work. And what movies don’t work. When you look into the figures as an outsider, a lot of things don’t make sense. Agent Vinod selling for a lot more than a Kahaani. Or Barfi! not selling as well. All these notions that a thriller does not do as well or this film does not have a ‘repeat value’ or this film does have a ‘repeat value’. How accurate are these surveys, given the TRPs themselves are actually extremely questionable, at least in India? How evolved is the process of selling satellite rights?

So I guess TRPs are questionable but that’s the only benchmark to go by. So that’s what we go by.

 

But that’s something that needs to change?

Well, the whole broadcasting industry needs to work on that so that’s not something we’re going to worry about. That’s just what we take as the Holy Grail to determine whether a film’s working or not on TV. That’s what the advertiser looks at, that’s how media is bought and so on. Yes it is true that broadcasters have their own theories about which movies are TV friendly and which ones are not and that might not be proportional at all to how they have done theatrically. But that’s just how it is and that’s the environment that you need to work with. So the buyer has the right to have their own theories about what they want to buy.

 

But are these theories based on any kind of proper…

I have to say they are based on the logic, whether we believe it or not, that movie viewing on television has to be something that you can snack on. You’ve got to be able to watch five minutes, go off somewhere, do something, be okay with two breaks, come back and pick off where you left it. So they tend to believe that action movies and comedy movies tend to work really well. When it’s a drama, when it’s something you need to be very, very compellingly involved in the story with on an ongoing basis, they tend to believe that that’s not something that lends itself to viewing on TV. Now I’m sure they’ve got a lot of studies that they have done to tell them that because obviously they are all very smart people. This really dictates massive budgets for them. So that I think is a theory that they operate on.

 

And you feel that that is… do you see a lot of acceptance for that theory in your own experience or… ?

Well you don’t have any choice to accept if that is what the buyer believes. That’s what the buyer is going to be paying good money for. And that might in the future dictate the kind of movies that get green-lit too. Because if 30 percent of your revenue is going to be based on satellite television, you’ve got to believe that you’re making cinema that will finally be bought by a channel.

 

And how big a factor is it for you when you take on a film?

It’s a factor.

 

Let’s talk about home video quickly because that’s the only market that is dropping. It’s… what? Fifteen percent or negative something? Is that only because of piracy or do you feel also because VoD (Video on Demand) and Direct to Home are catching on? Are they really catching on?

Actually, I think more than VoD and Direct to Home it’s that… One, is, obviously, piracy, two is the fact that a film is going to be available on satellite television pretty quickly and everyone knows that. It’s going to be 60 days, 65 days, before the movie is on a satellite channel and they can watch it for free. If they haven’t watched it before that on a pirated DVD, or if they haven’t watched it in a theatre. So the whole joy of owning a copy of the film is really irrelevant today I think for most people because they can either download it from somewhere or there’ll be some way of watching where they won’t need to own a physical DVD and it’s just become a bit irrelevant to have a physical copy of a film anymore.

 

Vishwaroopam was released simultaneously.

Actually it didn’t. He wanted to but it didn’t happen.

 

It didn’t work out? Is that a way to go? Is that something that could…

I don’t think it’s a way to go because it’s just… you won’t be able to release your movie theatrically because exhibitors won’t accept it. So it’s just…

 

But if you could, hypothetically, convince the exhibitors is that something that could make market sense?

I do believe there is no harm in doing it because I don’t believe that you are going to cannibalise very much at all on your theatrical business. I think someone who wants to watch a film in a cinema hall is still going to go and watch it. Someone who was anyway going to watch it on television later or on home video will access it on VoD. Having said that the exhibitors have a legitimate reason to say, ‘Guys, if you want showcasing in a cinema don’t have it available on another platform the same day that you are giving it to us because we’re just not going to take that.’ And it’s not something that is done anywhere in the world actually. Windows in India are much shorter than anywhere in the world.

 

PIRACY

 

Okay. Piracy. There was an anti-piracy cell. A bunch of you producers got together. Has that seen any traction? Has that been able to do anything? What are some of the steps that can be taken even today? Or do you feel that the market needs to just develop around piracy?

Well, the market is developing around piracy. I don’t think anyone is under any illusion that it’ll be stamped out completely. I believe that legislation is going to be the only way to get to make a difference to that. If you’ve got really stringent collective action against the pirate and the person who is going in and accessing content from the pirate, only then are you really going to be able to move forward.

 

Legislation and implementation, of course.

Absolutely, absolutely.

 

The cell that you guys set up, has that been able to take any measures? What can producer do themselves?

You do what you can. You’ve got an online anti-piracy agency when you release your film that ensures that take down notices are sent to any website that is pirating your movie. But given the level of proliferation you do your best but you know that it’s never going to be enough. You’ve got codes on every print that you send out so you know from where a print has been pirated. You know from where your movie has been pirated so you can take action against that cinema. The cinema will invariably tell you that it’s not the case, that if it’s a physical print it could have happened on the way. So you’re never going to be able to tell exactly where it happened. The stakes are so high that even if you put a security guard on every print, you know how much they pay and the lure of the sort of money that they would get if they had to go out and pirate that film would be so high that it’s not really going to be worth your while. So there are lots of reasons why you have to accept that you do need to work around piracy and that’s just how it is.

 

What are the alternative revenue sources that are hot right now? What are you guys talking about? One of the things that you spoke about earlier, licensing, gaming, merchandising, that is still a nascent market in India. One of the questions that I wanted to ask you was: Is that something that needs to develop more India specifically? I mean so far what we have seen is that we’re trying to import it exactly in the way it exists abroad. So if you have an action or sci-fi film in India, you’re going to have an action figure corresponding to that, or whatever, which we don’t make much of. But we might have a different market. Maybe Gangs of Wasseypur could have merchandising around it which is not the kind of film that you will have merchandising for abroad. So is that something you guys are thinking of in a completely different way now?

Very much. And I think it needs to happen with the right movie. Of course gaming we do on a number of our movies already. There are lots of other platforms like your Netflix and Hulu and YouTube and Samsung and various other platforms that we are on today which were non-existent a few years ago. But yes I think merchandising is definitely something that we need to look at much more.

 

In a different way. I mean I remember, for example, when Hum Aapke Hain Koun released there wasn’t a girl anywhere who didn’t have that green and white disastrous dress that Madhuri (Dixit) wore.

Or the felt cap of Maine Pyar Kiya.

 

Which is not what how you would think of merchandising abroad.

That just happened organically. It was just that people really wanted it badly. As an organised effort it could have done much more.

 

But I’m thinking that is the kind of merchandising that might work here much more than a Superman costume?

Absolutely. Absolutely.

 

What about in-cinema advertising? One does believe that the revenues in India are lower than the revenues that you earn aboard with in-cinema advertising. Is that something that needs to give?

So that’s revenue that goes to the cinema.


Okay. What about radio and music sales? How is that shaping up?

Well it’s shaping up pretty well. Of course, physical sales are pretty much non-existent today. So you’re really looking at digital. Radio and broadcasting as your key drivers as far as music is concerned. And the physical format, in music, is not really something that we look at at all. But music is the best way to promote a movie in India and so we look at it as a marketing tool…

 

As well as a revenue tool. What are the one or two alternative revenue sources that producers are most… which would you would bet your money on? Which are the ones that are coming up?

I’d say that if 4G is implemented in India the way that it is anticipated, 4G might be a massive source of revenue for studios because there will be a lot of audio-visual content that will be very easily downloadable and accessible. And if you are able to repurpose your catalogue where you are able to provide byte size content for platforms you might be in a really good position there. That’s one. Two is, I think, if you look at the online models today so from a Netflix to a Hulu to a YouTube. These are all models that I think are growing and evolving as we move along and they are new mediums completely. We’ve already got deals in place with most of them and we will continue to do a lot about that in the future.

 

THE COPYRIGHT ACT

 

I want to talk a little bit about the latest amendment to the Copyright Act, which gives a lot of people now a right to royalty. Is that something that you guys are concerned about? Have you had a look at the legislation? Are you rethinking your contracts? There is also ambiguity about how much royalty to be paid. So what are your concerns about that amendment?

So I don’t want to get too much into this because it might be something that is subject to litigation in a while etc. so I really don’t want to dwell on that too much. But yes it’s obviously something that we have looked at very, very closely.

 

And it is a concern?

It is a concern. Absolutely.

 

What are the concerns? If you can just tell me what is it that is of concern in the…

I do believe we need to look at India as the market that it is rather than ascribing western models of copyright to it. I think you need to look at music in Hindi cinema as a different entity altogether as compared to music that is not commissioned for a particular piece of work, that just stands on its own completely which is an album that someone’s created and sold as a separate album of that artist as against something that is commissioned by a producer to be written for a film to be shot and to be picturised on actors and actresses and then sold as a part of the movie. So I do believe that we’re in a little bit of a different situation here and I think those nuances need to be something that we all consider very carefully before we come to any final conclusion there.

 

Okay. And the ambiguity. Is that also something that is or that can be…

There is a fair amount of ambiguity which is what we’re all seeking some clarification on.

 

I don’t know if you are aware of it at all but screenwriters have been talking about a common minimum contract. Is that something that you guys have spoken about or…

No it’s not something that has been spoken about in any official capacity.

 

THE STATE AND THE NEED TO LOBBY

 

Fair enough. I want to talk a little bit about what the state can do overall. Of course there is the taxation. Resources and taxation are two main areas that I wanted to ask your opinion on. In taxation, of course, there is talk of entertainment tax being included in the GST. We don’t know if that’ll happen or not. There are discrepancies in the entertainment tax and service tax paid in each state. What are some of the concerns that you guys have? Where do you feel the state can, keeping their concerns in mind, aid the industry in any way at this point?

I think as cultural ambassadors of India in many ways and in many ways as the most public face of India to the world it’s probably important for the government to look at the sector a little bit differently and to look at how they can motivate this sector and how it can be given the impetus to grow. Because we haven’t really reached the stage where the sort of tax structures that are imposed on the industry right now are sustainable for growth in the long run. So I think it’s very important for the sector to be looked at and, frankly, also for us to represent ourselves in the right manner to them as well because I don’t think there has been a very concerted way in the past where we have represented our issues the way that Nasscom does for the IT industry, for example. So that I think is very important. The entire structure of taxation for the entertainment industry needs to be looked at. The other thing of course is piracy and I think legislation is the key role that the government can play in ensuring that piracy is dealt with in a very severe manner where the deterrent is so high that it becomes difficult for people who want to indulge in it. So those are the…

 

And do you feel like there needs to be a little more organisation in the industry to lobby, for the lack of a better word?

There are organisations. The problem is that there are three or four of them and I think it’s important for us to come under one body that represent the issues of the industry in a professional manner.

 

BETTER SCRIPTS AND AVOIDING PLAGIARISM

 

What are the changes that you can think of offhand in the creative… that need to happen in the creative industry which will aid the market at this point? Better scripts maybe, better scriptwriters, more film education, anything that you can think of.

You know there is a lot that studios can do and we’ve spoken about that but definitely the creative community needs to look inward a bit. Because I think the quality of writing that one has been exposed to in the last so many years and the stage at which writers are happy to put that out as their work and really ask someone for an opinion… One might be purely because of the training but I don’t think it’s that. I think it’s a certain amount of laziness in putting in that extra effort and getting it to exactly where it needs to get because I think there is such a dearth of concepts and ideas today that something that is even vaguely interesting can get picked up pretty early on but it’s not been developed into the best that it can be. The studios on the other hand have to ensure that writers aren’t feeling so desperate for their next meal that they feel the need to do that and are feeling more secure in order to focus on the writing. So I think just the quality of writing and the depth and intensity of effort put into a screenplay can change quite a bit.

 

And you did mention that studios also can do more in terms of allocating funds for research on a script or development.

I think many studios today, us included, are happy to do so. The problem is really the dearth of really great writing talent out there and the dearth of really great ideas out there that are represented in a manner that can pique someone’s interest. So I have to say that there is a massive dearth of talent.

 

What about, for the lack of a better word, approachability? Because honestly there is a lot of talent out there but one tends to believe that… There are fabulous writers out there. Come to think of it Indian literature today is the hottest property anywhere. There are fabulous writers sitting in Delhi but they are not going to come out here to try and write scripts. Because their whole impression is that: ‘I’m going to have to sit struggling in Versova, in a cafe.’ That’s not something they would do because book advances are so great. So is approachability, talent scouting, a wider reach something that you guys are also…

It’s important. I can’t deny that. Approachability is key. We try to be as transparent and as open as we can but obviously we’re not going to be able to meet everyone who has a great idea. But, yes I think it’s important for studios to be as approachable as they can be. And to actually be going out there to seek out people.

 

The way we used to plagiarise films in the eighties and the nineties is not how… a lot of things are changing. A lot of people are buying rights to remakes if they want to. Is corporatisation one of the major reasons for that clean up that has happened or is there a greater risk of litigation? Also I want to ask you guys, do you have systems in place to screen content for originality?

We do. Having said that, we might make a slip now and then. If we realise it later on in the process, it’s something that we would definitely look at. Because one couldn’t possibly have watched every film that exists in the world and in world cinema to identify if something has been taken from somewhere. So, but it’s something that we look at very, very carefully. It’s not something that we would accept at all. We do have a system in place where our lawyers get to watch a rough cut at some stage to give us feedback on potential issues that might come up later. But there is a lot of frivolous litigation as well, and we just assume there will be. With every film we allocate a certain budget to that because we know that that is something that is going to happen.

 

FINANCING MODELS

 

Okay, quickly. The industry status came a while ago. Have the financing models developed as one would have hoped when the industry status was accorded to films? And what is currently the prime source of financing? I mean public listing is one of them. I believe UTV has been delisted now.

It is part of The Walt Disney Company now.

 

But you guys had gone public earlier. What other organised funding? Venture capitalists…

Well, you have all your studios in the game today so they (films) are all privately funded by studios. You’ve got banks willing to offer, to credible production houses, loans at pretty decent rates of interest. So it’s fine now I think. If you want to raise finance for a film, and you want to do it through legitimate means, there are many legitimate means open to you.

 

You’re saying there are enough legitimate means that are available?

One is obviously going to the studio. Two is going to a bank and raising funding based on your credentials and based on your pedigree obviously. If you are a credible production house today you can raise funding from banks.

 

RELEASE AGREEMENTS

 

We touched upon this a little bit earlier. For example when Anurag (Kashyap) spoke about how even though Gangs of Wasseypur was doing well, the minute Ek Tha Tiger  was released Gangs of Wasseypur had to removed from screens. Are there larger agreements that can be worked out with exhibitors so that bigger movies don’t end up swallowing smaller movies?

I don’t think so.

No?

I think that the market is going to dictate that. And I don’t know about this specific example but finally you have to accept the exhibitor is going to be doing the best thing for their business in that week. So if a film is doing well I doubt if it’s going to be taken off screens if there is a big film. It will be accorded a certain number of screens but because there is a big film coming the week after, that is going to come in and take more screens. You just have to be savvy about where you are going to place your movie. If you believe you’re a film that will grow, don’t come one week before Ek Tha Tiger.  It’s a tough one. It is going to be tough.

 

COST-CONTROL

 

How are you investing in keeping costs low? I know there are producers who are hiring docket management systems to monitor the per-day costs and stuff like that. Is that a huge priority for you guys right now or do you feel that…

It is a big priority that you just have to do it on an ongoing basis. It’s just part of the deal.

 

What are some of the ways?

Well we just take on a really good line producer and we monitor the entire process really well. We pre-plan, we do our pre-production pretty meticulously. And that’s the best way to do it really, to just plan well in advance.

 

WHAT IS A STUDIO?

 

Final question. You started this conversation with speaking about how studios are coming back after decades. What is new studio system? How is it a sort of hybrid between a corporate and the way studios were thought of traditionally? What is this hybrid?

You know I think the way studios were thought of originally was you’ve got a massive studio lot. So there is a physical studio. You’ve got actors on contract, who work only with you, and you can loan out other studios. You’ve got your physical infrastructure to make movies. Today things are a bit more virtual. So today as a studio you don’t need to necessarily own sound stages. You can get most of your post-production work done outside of you. You don’t need to sign on talent that only works with you. You can choose to do long term deals with certain talent— like directing talent, acting talent. You don’t necessarily need to be… I mean you don’t need to have everything on one lot. It can be done in various places and it can still be all coming in to one studio. So I think the model today is really having creative, production, marketing, distribution, syndication- the whole value chain involved in the making of a movie and then the releasing of the movie can happen in your control, and for you to be responsible for all that but not necessarily having to physically control it.

 

Okay. And do you guys see yourselves as a studio? Would you say…

Absolutely.

 

The same model? Okay. That’s it.

Superb.