Fading star power, high fee make films unviable; changing audience tastes also a reason: Producers
Rajesh N Naidu (THE ECONOMIC TIMES; September 22, 2024)

Mumbai: The Hindi film industry has seen 30-40 big-budget films getting shelved in the past year and a half, a sharp rise from the pre-pandemic average of 10-15 annually, according to trade analysts, causing fresh concerns in Bollywood despite some recent relief brought by the success of a few mid-size releases.

Big-budget films like Rakshas and Baiju Bawra (Ranveer Singh); Ganpat 2, Rambo and Hero No 1 (Tiger Shroff); Hera Pheri 3 (Akshay Kumar); Draupadi (Deepika Padukone) and Mr Lele (Varun Dhawan) are among the projects featuring prominent stars that have been shelved, industry watchers said. Such films account for 30-40% of all projects announced during the period when the Hindi movie industry has seen several releases that have failed to make an impact at the box office.

Producers and trade analysts told ET that three key factors have made launching a Hindi film increasingly unviable: high costs linked to star remuneration and their entourages, promotion, marketing and advertising; a lack of confidence in the commercial viability of existing scripts that don’t align with shifting audience tastes and the failure of stars to deliver strong box-office openings.

“Today, stars cannot guarantee you a good opening at the box office. The industry must accept this,” said Tanuj Garg, managing partner at Ellipsis Entertainment, a production house. “Actors and directors before the pandemic worked on hefty fees. This was impractical and unsustainable.” This is a wake-up call and the Hindi film industry is thinking about what is viable and what is not, he said.

“It is quite clear that high concept films are working at the box office and not big stars. So, a film’s content has to work,” said Garg of Ellipsis Entertainment. After the pandemic, streaming platforms increased their investments in buying films and creating original content. They invested in actors who did not belong to the A-list category, paying them close to three times the fees they previously charged, said trade analysts.

This became a benchmark in the industry. But these actors could not provide a reasonably good opening to their films at the box office. After the list of films failing to make a mark got long and their focus turned to profitability, streaming platforms reduced their average spending on acquiring a film. According to the FICCI-EY Media and Entertainment industry 2024 report, the number of films released directly on these platforms reduced to 57 in 2023 from 105 in 2022. This impacted the revenue of producers. The total revenues from selling digital rights of films fell to Rs 3,500 crore in 2023 from the peak of Rs 4,000 crore in 2021, shows data from the Ficci-EY report.

“Today, more than 50% of the cost of a film goes into remuneration of stars,” film distributor and trade analyst Shaaminder Malik said. “Take, for instance, the recent Hindi film Khel Khel Mein. The budget of the film is Rs 150 crore. The film is shot almost completely indoors,” he said. “Why does such a film require such a high budget? It is clear that a large part of the film’s budget has gone into remuneration of stars and their entourage. Despite this, the film has collected less than Rs 40 crore at the box office.”

According to industry insiders, the financial dynamics within the Hindi film industry have reached a point where scriptwriters earn less than what is spent on a star’s entourage. After covering these substantial costs, producers are hesitant to allocate further funds for film promotion and advertising, leading to a lack of audience awareness about new releases and their launch dates, which can severely impact a film’s success.

On an average the cost of promotion, marketing and advertising associated with a mid-sized or big-budget film is estimated in the range of Rs 8-15 crore. Malik said: “The stupendous success of Stree 2 lies not only in its franchise value but also in its tight budget and strong and sustained marketing and promotion.”

Girish Johar, a producer and industry expert said: “A sense of pragmatism has prevailed among makers today. The whole focus has shifted to relooking at both costs and streams of revenue thoroughly."

After the pandemic, the recovery of investments in Hindi films has come down, he said. “Earlier, films of top actors and actresses would be shelved either for lack of funding or when stars’ vision is not in sync with the makers. But in recent years, economics has compelled makers to shelve films,” he said.