Mumbai: India's fast-growing micro-drama industry is beginning to evolve beyond a volume-driven content play, with established film production houses entering the segment as platforms increasingly use short-form storytelling to test intellectual property (IP) and build branded content opportunities, industry executives and entertainment experts told ET.

Recent reports suggest that major production houses such as Yash Raj Films, which plans to invest Rs. 150 crore in micro-drama content, and Red Chillies Entertainment are diversifying into the space. At least 15 apps currently offer micro-drama content in India.

"Like in the West, India's micro-drama space is likely to emerge as a breeding ground for testing the scalability of an IP. Big players such as Yash Raj Films and Red Chillies Entertainment are likely to test the efficacy of their ideas with audiences on micro-drama apps. Based on audience response, they can then decide whether to scale an IP into a web series or a theatrical feature film," said Azim Lalani, co-founder and chief business officer at Bullet, a micro-drama content app.

Artificial intelligence is emerging as one of the tools for testing IPs in the micro-drama space.

In the West, Holywater, a technology entertainment company, operates a four-app micro-drama ecosystem comprising My Drama, FreeBits, My Muse and My Passion.

According to industry executives, the company first tests an IP on My Muse, its AI-based platform. If the content receives a favourable response, it is adapted into a live-action format and released on another subscription-based app. Content that performs well is then scaled into a larger-format web series or feature film, helping the company de-risk investments.

Industry experts expect a similar model to emerge in India.

Executives said the entry of large production houses into the segment could also open new doors for talent.

"When big players such as Yash Raj Films or Red Chillies Entertainment enter the micro-drama space, they increase its attractiveness. Mainstream talent, which has so far been somewhat reluctant to work in the segment, will begin to take it more seriously," said Kunj Sanghvi, SVP, Business, Kuku TV, a leading micro-drama platform in India.

Branded content is another factor making the segment increasingly attractive, film marketing experts said.

"Big players will premiumise offerings in the micro-drama space. At present, mostly local brands are integrated into content because viewers are largely based in tier-2 and tier-3 markets. But with the entry of players such as Yash Raj Films or Red Chillies Entertainment, brands with a national presence will begin to consider the space more seriously," said Neeraj Joshi, film marketing consultant.

Branded entertainment experts also believe the economics of micro-drama content work in favour of production houses.

"The micro-drama space has relatively low entry barriers. It requires less time and capital compared with theatrical feature films. For large production houses, creating micro-drama content with integrated brands can become a meaningful source of revenue. Today, there is significant unpredictability around box-office performance, while the time and investment needed to produce a feature film are substantially higher," said Navin Shah, joint managing director at EMC Solutions Worldwide, a branded entertainment company.

In the past two years, Bollywood production houses are increasingly diversifying into film distribution space. Though not unprecedented, a notable aspect of this shift is that today diversification into film distribution space has become a structural and survival imperative for production houses to deal with rising costs of filmmaking and grab larger share of revenues available across the value chain of filmmaking, producers, exhibitors and film marketing experts said.

Dharma Productions, and most recently Jio Studios, are the two prominent production houses that diversified into film distribution space in noteworthy manner in the last two years.

"Cost of making films has gone up due to the huge talent cost. Then, distributors are doing away with minimum guarantees (upfront cash) to producers. A combined effect of these is production houses venturing into distribution,” explained Suniel Wadhwa, co-founder & director, Karmic Films.

A key rationale behind production houses diversifying into distribution is to retain a larger share of revenues that a film can generate, noted established producers.

A key rationale behind production houses diversifying into distribution is to retain a larger share of revenues that a film can generate, noted established producers.

Functioning as distributors helps production houses reduce their dependence on sub-distributors, explained independent exhibitors.

"Production houses are going full throttle. They have set up offices in Bihar and West Bengal," said independent exhibitor Vishek Chauhan. “They are not dependent on sub-distributors. So, a distributor’s commission is their savings,” he explained.

Independent distributors earn 5-10% of revenues as commission income. “For instance, consider Dhurandhar. The film collected Rs. 1000 crore. And if a sub-distributor’s billing is Rs 450 crore, then 10% of it is Rs 45 crore. This is a huge number,” explained Chauhan.

Unfavourable experiences with studios have also contributed to this trend, noted producers. “There are studios who offer promotion, marketing and distribution to production houses for a fixed fee. These studios take a huge share of revenues earned through a film for the money they invest. This is in the range of 10-50% of box office revenues. This is a reason why production houses have diversified into distribution,” explained producer Rajesh R Nair.

Digitalization is another enabler for production houses to venture into distribution, explained distributors.

“Today, distribution is centralized, thanks to digitalization. One can keep a tab of everything sitting in Mumbai. Due to nuanced data, production houses have been able to negotiate with exhibitors on programming and revenue-sharing,” explained Shaaminder Malik, distributor and film trade analyst.

At present, apart from production houses, players such as AA Films, Pen Marudhar, YRF and PVR Inox distribute films.

In the long run, power dynamics in the distribution ecosystem is likely to shift in favour of multiplexes, said industry veterans.

“Today, multiplexes generate 70-75% of box office revenues. This shows their power in the entire distribution ecosystem. In the long run, the power dynamics will shift in favour of multiplexes,” said Neeraj Joshi, a film marketing and strategy consultant.

Rage-bait cinema — films which contain elements that spark polarizing debates on social media — is increasingly turning out to be an effective marketing tool in keeping a film alive in the public consciousness after it has resonated with audiences by providing incremental footfalls, said producers, veteran film marketing professionals, distributors and film trade analysts to ET.

Such films stay alive in public consciousness after release by fuelling online arguments, especially when makers tap into uncomfortable social truths that keep conversations active and extend box-office momentum, industry executives said.

“Today, 60% of cinema chains are concentrated in the NCR (National Capital Region) and Mumbai territories. This shows how important are these territories in terms of business. These territories have changed tremendously due to social media,” said Neeraj Joshi, a film marketing and strategy consultant. 

“Today, almost every action of people on social media is about performance and activism. So, makers consciously insert elements in their films which capitalize on uncomfortable truths and fault lines contained in the worldview or value system of audiences.”

Recently, the American romantic comedy film The Drama sparked heated debate on social media, with some viewers saying its gun activism theme felt completely out of place in a light-hearted film from the romance genre.

Such kind of insertions in plots works for both camps—the supporters and the protestors, said film marketing strategists.

“Online debates around films often serve as a marketing tool particularly for those films which aim to become a talking point. Virality generates both positive and negative perspectives, while also drawing fence-sitters to theatres, leading to incremental footfalls,” said Saurabh Varma, a veteran film marketing strategist.

“Additionally, through virality, makers aim to gain attention of streamers and film rights buyers who tend to favour films which achieve high visibility and engagement.”

Last year, the big-budget film Dhurandhar that released on December 5, collected Rs. 103 crore on its opening weekend, indicating that the film resonated with audiences. However, within a few days of its release, debates about its historical authenticity and whether it is a nationalistic or propagandist film emerged on social media. These debates piqued audience’s interest and provided incremental footfalls as in the second weekend — between December 12 and December 14 — the film collected Rs 140.5 crore.

Film trade analysts believe that social media debates can potentially transcend and become a 360-degree buzz if a film deeply resonates with audiences first.

“When a film resonates deeply with audiences, social media debates can become a 360-degree buzz covering radio, television and even newspapers. This provides incremental footfalls,’ noted producer and film business expert Girish Johar.

Producers acknowledge the growing importance of the audience in shaping narratives.

“Social media has become a battleground of identity, politics and morality. Today, audiences have a larger role than critics in shaping big narratives given the democratization of social media platforms. However, a social media debate alone cannot provide incremental footfalls to films which have not resonated with audiences,” observed Suniel Wadhwa, cofounder and director of Karmic Films.

Social media’s algorithmic structure also fuels and reinforces views and debates which trigger audience’s curiosity.

“We live in an age of algorithms which keep people in echo chambers. When films have morally ambiguous elements and when there is boycotting sentiment, usually, audiences become curious and go and watch films in theatres,” said Shaaminder Malik, a film distributor and trade analyst.

Kartik Aaryan has emerged as the torchbearer for the next generation of Bollywood actors, not only because his films have been successful blockbusters but also because he’s a formidable name in the world of brand endorsements.

Aaryan, who debuted on the ‘Forbes India Celebrity 100 list’ in 2019, today boasts of an impressive portfolio of brand associations that transcend international boundaries.

Aaryan entered the industry as an outsider, but with his boyish charm, relatability and effervescent energy, has climbed up the pedestal to become a favourite among corporates.

One of the key factors contributing to Aaryan’s unparalleled success when it comes to signing up brands is his discerning choice of films and the diverse characters he brings to life on screen.

Neeraj Joshi, marketing head at Zee Studios, said, “Aaryan’s is a story that brands love. A boy-next-door from central India making it big with sheer determination, undeniable talent and ‘in-your-face’ attitude. His appeal cuts across age, gender and orientation, which is something most big stars still covet.”

His recent successes, including Bhool Bhulaiyaa 2, Satyaprem Ki Katha, Freddy and Dhamaka, have skyrocketed his brand value and demand. His upcoming roster includes the muchanticipated horror-comedy Bhool Bhulaiyaa 3, the youth-centric Aashiqui 3, and Chandu Champion, a real-life-inspired tale targeted at audiences across demographics. He also has a collaboration with Dharma Productions coming up on an untitled war film, which further solidifies his status as a versatile actor.

“Aaryan is known for portraying characters that resonate with the youth. Gen Z appreciates humour that aligns with their sensibilities, and through his fashion choices, movie roles and social media visibility, Aaryan is massively popular among youngsters,” said Joy Chatterjee, AVP sales and marketing, Mankind Consumer Business Unit.

Even within these factors, his active social media persona stands out as a robust advantage. “For advertisers, social media presence can be a valuable asset. While collaborating with a celebrity or influencer, the first metric a brand looks at is the ‘reach’ they have and what kind of a target audience follows them,” Chatterjee added.

Proof of Aaryan’s magnetism lies in the extensive list of brands he endorses, which spans diverse categories: From FMCG giants like McDonalds, Dabur Red and Cadbury Silk to technology and lifestyle brands like Superdry, Boat Speakers, GTPL and Armani Exchange watches, Kartik’s brand spectrum is as vast as it is impressive. In 2023, his campaigns including #ApnePartnerSePucho (Manforce Condoms), #TheKartikAaryanMeal (McDonald’s) and #YaaronWaaliBaat (McDowell) have been the talk of the brand world.

Today, Aaryan’s commercial value is such that he commands fees between Rs. 3 crore and Rs. 5 crore per brand. He also earns Rs. 40-50 crore per film. These figures are testament to his box office prowess and the immense draw he has for audiences and brands alike.

In Kroll’s Celebrity Brand Valuation Report 2022, Aaryan held the 17th position with a brand value of $36.5 million. This not only underscores his popularity but also highlights his ability to resonate with diverse audiences, often through the infusion of humour into his brand associations.

Renowned trade analyst Joginder Tuteja called Aaryan the new face in brand world. “He is a driving force in the world of endorsements. With more than two dozen brands in his kitty, he’s among the top three celebs in the country. It’s indeed a remarkable feat for a person who comes from the heartland, to not just make it big in the glamour world but also retain high levels of popularity among such a large chunk of the audiences. He is one of the leading faces in Bollywood and the brand world,” Tuteja said.