The Survival of Bollywood….How & Why ?




The Survival of Bollywood….How & Why ?



The problems with Bollywood are far more structural than cost management. And survival of Hindi cinema and cinema halls is not for their employment potential, but for more strategic causes

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Lot of discussions have been around the disastrous numbers reflected in Box Office collection of Bollywood. Initially, it was believed that the Bollywood is under attack from South films. The state of Bollywood then was like that of the high cost American car manufacturers of 1970s when they, for the first time, felt competition from the cost-efficient Japanese cars and did not know how to react. But now with Telugu film industry also feeling the cost pressures, it is clear that the problems of Bollywood are not just restricted to costs but are far more structural.



Incorrect measure of growth 


During the last 15 years, Bollywood has been measuring its growth through Gross Box Office Collections and number of screens. Now let me tell you why the growth depicted by these numbers is flawed.


Since 1980s (the pre-satellite TV era), while the number of screens across India have approximately increased by four times but what is also true is that the average seating capacity of a multiplex screen (200-250 seats) is now almost one-third of the single screen of those days (typically 500-800 seats). And since the Indian population during this period has doubled, the cinema hall seats per ‘000 population has actually fallen below 1980s level. 


Essentially, the growth in Box Office collections has only been due to the rise in prices of cinema hall tickets from around Rs 3-4/- in 1980s to about 150/- now. Therefore, Bollywood has been collecting larger sums from fewer people. For country which has a large market at the bottom of the pyramid, it should actually have been the converse.





Increasing number of producers. Reducing number of distributors



Film making is about finding the optimal blend between creativity and commerce. Also, film making is an entrepreneurial activity. And entrepreneurial businesses flourish only when there are one or two key decision makers. 


In the past the Producer-Director duo were the key decision makers and thus could deliver the right blend of creativity and commerce. In fact, makers who were themselves both producer and director ( Raj Kapoor, Subhash Ghai, Rakesh Roshan et al) had the highest success rates.


The financier rights were then secured through distribution rights in different territories (Bombay, Delhi-UP etc.) hence the financier never needed to interfere with the film making. The MGs  (Minimum Guarantees) film distributors to producer and from exhibitors (cinema hall owners) to distributor provided a web of risk-mitigation system. Since distributor and exhibitors were closest to the consumer, the reading of consumer’s mind got built in these MGs and in the web of risk mitigation system. This risk mitigation system worked towards sustainability of film business as options and futures do for financial markets.  


But now with the above mechanism no more in existence, the entire risk gets concentrated with the producer, who tries to mitigate his risk by taking multiple producers. In this process not only the market intelligence from distributor/exhibitor is no more available but presence of multiple producers means multiple decision makers in an entrepreneurial activity. And thus the film making starts drifting away from the optimal blend of creativity and commerce. 




Why should Bollywood and cinemahalls survive ?


Now this is a fundamental question that many are asking on social media where Bollywood is receiving a lot of flak for being against Indian culture. Yes, these netizens do have a valid case but what should also not be forgotten is that Bollywood has been the biggest vehicle for spread of Hindi in Southern and Eastern India. Besides India, be it South America, North Africa or Central Asia, for many Bollywood is what represents India. In fact, if after Hollywood there is any entertainment industry brand with global presence in the entire world then it is only Bollywood. And the best part is that this brand which provides a huge global soft power to India and to Indians is in public domain. So there is definitely a strong case for survival of the brand Bollywood – in the larger interest.


Now, some may argue that when OTT is more efficient way of content distribution why does one need cinema halls ? 


The answer lies in the unique and unmatched power that the country derives through public consumption of content. If Hindi cinema has been effective in spreading patriotic verve (Gadar, Chak de, Rang de basanti, Border ) and awareness for social causes (Bandini, Mother India, Taare zameen par) then the public consumption of content has played a very critical role in such public campaigns. In fact, the British Govt was so scared of public consumption of content that it had imposed high entertainment tax to curb the public awareness of patriotic feel that was getting spread through films and theatrical plays. It is for this power of public consumption of content that cinema halls and theatre need to survive.



So while industry players are working on saving the industry and its employment potential but their responsibility is much bigger than what many are aware of.


- Deepesh Salgia  

Creative & Strategic Vision -  Mughal-e-Azam : The Musical









  1. Superb Synthesis Salgia's always enlightening to read your bird's eye view articles...objectively, responsibly and rationally put together...actually this is too brief...please comprehend more in the light of current trolling and boycott scenario....

  2. Many thanks. Fair points. Will consider your input and work on a sequel blog.


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