Bollywood movies business model explained; Shah Ruk Khan | Salman Khan | How films are earned: Shahrukh-Salman makes up for the loss of distributor, Manoj Kumar completed shooting by selling bungalows

Today, in this episode of Reel to Real, we will try to understand the business model of the film industry.

Earlier films were earlier earned from theater release, music and satellite rights. Now this entire system has changed with the arrival of OTT platform. Digital rights have not only changed the habits of watching films by the audience, but have also given a new challenge to theater business.

Now the question raises whether OTT has created new opportunities for the film industry, or has the theater business damaged? Now films are made only for theaters, or for OTT? Which is the most beneficial model for producers? Is the success of films no longer dependent on the box office now?

Today’s reel to real will try to understand this business model. For this, we had a special conversation with filmmaker Pranjal Khandhadia, Shabbir Boxwala and film analyst-distributor Raj Bansal. During this conversation, we will know in which direction the film industry is going now and what new changes can happen in this.

Now strategy: dependence on OTT and Theatical Business

Today, films have become more dependent on OTT release rather than Theatrical release. OTT platforms are releasing direct digital by purchasing rights from films, which has changed the focus of producers.

During Corona, the audience got a chance to watch films for free on OTT. Films were not being released in the theater. The films that were being released were available on OTT itself. This changed the habit of the audience. They gradually became accustomed to OTT. OTT gets a year -long entertainment in package ranging from Rs 15 to Rs 2000.

The theater costs from 3000 to 3500 by adding tickets, canteens, parking and traveling of 600 rupees. Despite this, it is not a guarantee that the film will be good. There was also a period when Hindi films were not running in theater and South’s films captured the theater.

Why did the bad phase of Hindi cinema start?

When the Hindi film industry is struggling, South’s films are constantly achieving success. The success of South Cinema is the best music, strong stories and good directors behind the success of South Cinema. Apart from this, ticket prices are also normal, which leads to a large number of audiences in theaters.

South has big stars like NTR, Chiranjeevi, Mahesh Babu, Rajinikanth and Kamal Haasan’s Loyal Fan Clubs, who help every film to get big business. These actors ensure that their audiences get the best entertainment at a low price, which attracts the audience to theaters.

Did South Cinema adopt more new strategy?

He adopted another smart strategy to get South Cinema recognized at Pan India level. He started giving small, but important roles to big actors of North India in his films. Actors like Ajay Devgan, Alia Bhatt, Amitabh Bachchan, Deepika Padukone and Sanjay Dutt were cast in South films, which also increased the impact of those films in the North India Market.

After Bahubali, KGF, RRR and many other South films also became a big hit in North. South directors plan for 2-3 years on their films. Focus on sets, and make films with complete dedication. Due to the arrival of the Maker Studio system of the Hindi film industry, a little became careless.

What was the change in the studio system?

Film maker Pranjal Khandaria said- Earlier the producer used to make films with his convision. He used to release films with the same connection, but in the last 20 years, the arrival of the studio system has benefited both. Money started coming from the corporate and things changed. The producer used to focus only on the film making. The other things handle the studio.

Now the producer is not at risk. During this, Hindi films got very growth and today we are talking about an annual turnover of 15 thousand crores. While the producers of the eighties and nineties used to make a film by taking money at a thick interest rate. Even the land and property used to complete the shooting of the film by mortgaging.

Now many studios have stopped funding Hindi films

Many producers do not take their films very seriously due to studio systems. Producers often get studio support, which makes their focus diverting from the quality of the film. Raj Bansal said- Many studios have stopped funding Hindi films, because they are not getting the right returns. Although there are many opportunities for new producers, they have to pay special attention to the story, music and directions for this.

Producers ignoring directors are also a major problem. There are many experienced directors in the industry, who are sitting unemployed today. Because new producers and studios are not giving them work. There was a time when the bad phase of Hindi cinema started.

Stars understand the problems of producers and distributors

Many stars like Salman and Shah Rukh Khan have returned the money, considering the problems of producers and distributors. Salman Khan has returned around Rs 35 crore to the distributors after ‘Tubelight’ did not run at the box office. At the same time, when Shah Rukh Khan’s film ‘Jab Harry Met Sejal’ did not run, he returned about 15 percent of his amount to MH Studios and about 30 percent of other distributors. Earlier, Shah Rukh has returned the money on the beating of films like ‘Ashoka’, ‘Paheli’.

What is the role of distributors and exhibitors?

The role of distributors and exhibitors is also important. There were 50 to 100 distributors in every territory in the last round of the 90s and the early 2000s, but now the number has come down to 5 percent. Now distribution work has come in the hands of limited distributors. Earlier there was no cinema chain, but now there are big cinema chains like PVR, Inox, Gold and Mirage.

There is usually 50-50 formula during the new film release. In which 50 percent of the cinema chain and 50 percent of the distributor get. When many films are released on the same day, a conflict between distributors and exhibitors begins. In such a situation, a big controversy starts. Due to which there is a clash between cinema chains and distributors several times.

In film business, now not one time investment, but Multi-STAGE Revenue Plan is necessary Hai- Shabbir Boxwala (Producer)

The film industry business is no longer limited to theater collection. Factors like satellite, music, digital rights and re-reliefs are now opening new avenues of earning.

1. Satellite and Music Rights: Do films still have backup income?

Earlier satellite and music rights used to be the ‘pre-kept revenue’ of any film. Even before the release of the film, TV channels and music labels used to deal with crores, which led to the producers to avoid theater risk. Now this business model has changed. Now OTT and TV channels are now adopting ‘Wait and Watch’ strategy.

First They used to buy films before release, now they decide the price after watching the film’s performance at the box office. ‘Only Hit Works’ formula has also arrived in the music industry. If the songs are hits, the film gets extra life, otherwise music rights do not bring much big returns.

New Business Model: Now it is very important to plan when the movies will come on the digital platform after theater.

2. OTT and Theater Business: Who is depending on whom?

First OTT used to run after platform films, now films are running behind OTT. The OTT platform wanted a new content every month, so he used to buy films by giving high price. Now the OTT platform is now seeing how the theater performance of the film is, only then we pay the right price.

New Business Model: Now the film industry will have to adopt Hybrid Release Strategy to balance both theater and OTT.

3. New gameplan of small budget films: not just content, correct marketing is necessary

First It was easy to release the theater making a film for 50-60 lakhs. Now marketing and digital promotion have become important.

4. Small budget films can now earn in two ways

By selling directly on OTT. By releasing on small cities or single screen theaters, then plan to go to OTT.

New Business Model: Now small films will have to be made to make the right target to the audience, the film will not run only in the theater.

5. Re-localize of old films: Can it become a way of earning new?

The demand for old hit films is increasing due to lack of content in the theater industry. When new big films are not coming, theaters have to earn by releasing the old hit films ‘Evergreen Content’. Re -als of films like Sanam Teri Kasam, Tumbad, Tum Bin are part of this model.

New Business Model: Now filmmakers will have to make ‘Re-Monetization Strategy’ of their old films, so that the old content can also generate revenue.

6. In the film business, now not ‘One Time Investment’, but ‘Multi-STAGE REVENUE Plan’ is necessary

Now the game of earnings of films is not dependent on the theater collection just. Each producer will have to strategize theater, digital, satellite, music, and re-relief models.

Theater + otT = hybrid release model

Music + Digital Promotion = Identification of hit film

Re-relief + correct use of old films = Long-Term Business

,

Read this story of reel to real of last week ..

How to pass films from the censor board: it does not have the right to ban;

Does the censor board really have the right to ban a film? In ‘Udta Punjab’, the board had directed to cut around 89 scenes, but the court approved the release of the film with just one cut, which was negligible. Read the full story ..

There are more news …