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Recession hits Bollywood
December 15, 2008 14:18 IST
Recession and tight liquidity has forced Bollywood to go in for cost cutting and slowdown on several projects.
Filmmaker Mukesh Bhatt feels that distributors have been severely hit by the recession. "It is difficult to find buyers and committed cost cannot be honoured. 90 percent of the films have been put on hold while those on floors have been held up due to the slowdown," he said. "Production, acquisition and actor salary costs had illogically shot through the roof with no commensurate returns for distributors sitting at the end of the value chain," said Tanuj Garg, Head UK & Europe (International Marketing, Distribution & Syndication) at Studio 18.
Besides, banks have also become cautious about lending as film budgets had sky rocketed in the last few months, trade sources said. Blaming the corporates for the situation, Bhatt said, "They are responsible for the ridiculous price-hikes and genuine producers have been affected. Cost control is required and artificial price-hike needs to be revised."
He feels that corporates, who have entered the motion picture business have little knowledge of film industry functioning. "Artistes are paid astronomical amount of money and the corporates do not get much return," he said. The slowdown has also taken its toll on the marketing budget of movies. Due to drastically pruned budgets, promotion of big-budgeted movies like Rab Ne Bana Di Jodi, Ghajini [Images] and Chandni Chowk To China [Images] have been extremely low key, sources said.
If these three films succeed at the box office, it will have a positive change on the fortunes of the industry.
The slowdown has also led to negotiation in high-priced projects, Shailendra Singh, MD, Perfect Pictures said. "We are in the process of revising budgets and actors as well as directors are co-operating. We need to create value for money products," Singh said.
Agreeing with Singh, Preeti Puri, Vice-President, Anil Dhirubhai Ambani Group promoted Big Pictures, the production arm of Reliance [Get Quote] Big Entertainment said, "Production houses have become sensitive about costs. However, the film industry is looking for a positive outcome from the recession."
"The bad side is the obvious. Workers not getting their dues, there has been loss of work opportunities and some producers taking advantage of the crisis and faking no funds. But the good part is that the bubble of overpricing would burst now and bring sanity to the budgeting of a film," trade sources said.
Now, filmmakers are exploring and focussing newer methods for revenue generation and shifting to newer technologies to reach the audiences... the latest being mobiles and DTH, they said. UTV Motion Pictures is releasing Oye Lucky! Lucky Oye! on DTH platforms -- Dishtv and Tata Sky within three weeks of the film's theatrical opening -- November 27.
Singh rejects the criticism that corporates are to be blamed for the slowdown in film production. "Corporatisation is good. What is needed is to strike the right price and balance. The emergence of studio model is due to the growing size of the industry. Evolution of Bollywood cannot be stopped," he said. "It is impossible for one individual to handle the production sector. There will be studios followed by mid-level producers. Corporates too are genuine producers."
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