Vanita Kohli-Khandekar: Going the Hollywood way

As studios seek to eliminate risk and improve returns, will the Indian film industry lose its uniqueness?

The $52.5-billion Walt Disney Company's Indian arm decided to stop producing local films recently. The last three years have seen the Rs 13,800-crore Indian film industry battle falling margins, rising costs and a stagnant box office. While the overall (revenue) numbers for Hindi films show a rise because of rising ticket prices, footfalls have actually fallen, according to data from consulting firm Ormax Media. The southern industry, the other big chunk has done well, say analysts, though numbers are difficult to come by.

Disney's decision, a reaction to poor profits, will put some downward pressure on talent costs. It will also hasten all those little things that make for a less risky film business. For instance, Ormax has seen a sudden spurt in the number of studios wanting to test scripts over the last year.

It is an indicator that the clean-up that began in 2000, continues. When film was given industry status in 2000, it resulted in some big changes. The Indian film business is now reasonably well-organised, the money is clean and so are distribution and screening. The films - ranging from Piku, Gangs of Wasseypur, Masaan to Bahubali or Sultan - are well-made, popular and, at times, critically acclaimed across the world. Clearly, the Indian film industry has come a long way from its underworld-infested past.

It still has some way to go in dealing with the risk inherent to the business, an art that Hollywood has mastered. Hollywood is more profitable because it has over the decades found ways to finance films better and put in place processes that make it less risky. Take talent costs for instance, everybody's favourite gripe in India currently. By banking on franchises, special effects and creature films Hollywood has actually shaken off its dependence on high-cost talent. It works because more than two-thirds of its revenues come from global markets.

There is a lot the Indian industry can learn from Hollywood, especially, on structuring finance, marketing and distribution. But, and this is a question that should bother anyone who loves Indian films, will it kill its creativity?

Note that this is not a "suits" versus creative argument. It is about the idiom of a creatively robust local film industry, which is figuring out how to cut costs and improve monetisation. In the process it has to streamline and become a little more ruthless about the creative decisions it takes - could that kill its uniqueness?

The Indian film market is unique because 90 per cent of its revenues come from local cinema and have remained so in spite of the free import of foreign films. China, which has a quota of 34 foreign films a year, and South Korea are the only other markets that Hollywood hasn't swamped completely. The Indian industry has shown amazing resilience in spite of over 100 years of state neglect.

Currently, the journey that began in 2000 is probably going through its final years. That is why script testing, focus groups, predictive analysis, market research, all of these are finding favour. In the late nineties when I requested the writer and lyricist Gulzar for an interview on whether market research could work in films, he paused and then politely refused. Much of what is happening now is anathema to really good creative people, because they believe that their creative instincts are being questioned. It is a bit like telling a newspaper editor that only readers can determine what articles should be written.

As the industry gets pushed towards the "streamlined, profitability" path something will give. It happened in Hollywood, which is sneered at for not being a thinking audience's industry. But the indie movement saved it, giving films such as Pulp Fiction and Good Will Hunting, among dozens of others. Disney's decision is in many ways a turning point. When it presses play again on local productions, it may be a signal that the industry is out of the woods. But would it still be the Indian film industry?

Twitter: @vanitakohlik