Jan 5, 2009

Business - Pass down fruits of cost-cutting measures to consumer: SRK

Economic education cites entertainment, as one of the industries which is recession proof, the other being cosmetics. Yes, it is true that people
will always watch films, specially in India, as movie watching is the only going-out activity that families can do together. In fact, I am told that my latest film—Rab Ne Bana Di Jodi is drawing in a lot of family audiences. Where else do families in India go? We don't have a bowling culture or say a Disney Park or much other choice apart from a public park or nowadays a mall maybe.

And till we don't have a choice of other forms of entertainment, watching films at a theatre will remain a large part of Indian families' entertainment agenda.

However, having said that, in the times that we are living in and the times to come there are changes we need to initiate as an industry to buck this trend. From what I gather, it is largely wealth which has affected so far, while incomes have not depleted, so far.

By wealth I mean, valuations have been revised (downwards) in terms of property etc. A depletion in incomes is of course the worst case scenario and in that case, a large number of people are bound to begin prioritizing—first will come the necessities, followed by entertainment—here too people will pick and choose what to see, so all films will not be watched—and the luxuries will of course come last on this list.

Our aim as an industry is to pass down the benefit of our measures to the consumer who can eventually pay less in terms of ticket prices which I am told are hiked up substantially for big releases (Rs 800!). If movies are made on say smaller budgets, then subsequently sold to distributors for less who in turn sells it to the exhibitor for less, he can then pass it to the end consumer in terms of a cheaper more affordable ticket (in multiplexes).

A closer look at reducing the cost of production, followed by the cost of talent would also help for one. This is of course a subjective matter but there is a huge flexibility maybe we could probably move towards a logical system like the point system in Hollywood which gives points on gross collections etc.

Followed by this we could re-look at technician costs and lastly the spot boys and light boys, this should definitely be last so as not to affect them too much. Critically, we could aim to make our films faster, as each day adds to the cost of production though it must not be done at the cost of quality.

If all the above self-checks are put in place then maybe the end consumer will benefit. I believe this from a producer's point of view as well (Red Chilles Entertainment) and I can say we have never gone overboard in selling a film and so far it has worked for us in terms of collections. This way, everyone makes money.

Another fact is that overseas business for our movies too has reached its peak, there is not more we can go beyond this. Corporates, who entered this business, have had their valuations affected and today making a Rs 70-80 core movie is a huge investment and very difficult if not impossible to get returns on the same.

I too wanted to make this live action VFX movie called Ravan, which would cost around that much, which we have put on hold. Today, a Rs 30-40 crore budget is reasonable on which returns are possible, so everybody is re-looking at their projects and going back to basics. They are picking the best, which look most likely not to put them in the red.

On the other hand, even if you look at a mature market like Hollywood, of say 200 films released only four to five go on to being big blockbusters. It's never 50 super hits which is the same here. You will only have like big ones like a Sholay, Dil, Raja Hindustani, Dilwale Dulhaniya Le Jayenge etc....so, here's to the movies.

As told to Nandini Raghavendra from Los Angeles where Shahrukh Khan is shooting for Karan Johar's My Name is Khan

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