Nobody Wants To Do Business With Smaller Films Despite Steady Supply

There is a lull in Indian cinema business in 2024 after a terrific 2023. India’s filmmakers, distributors, exhibitors, and even audiences are convinced that only big-budget action films make money on the big screen. However, not many big-budget films can be made frequently. 

This year, cinemas are already off to a weak start as the big-budget January release Fighter made less money than expected. But ‘content-driven’ films that aren’t led by big stars or mounted on big budgets are struggling to make money in theatres even as over-the-top (OTT) platforms shrink their budgets or worse, force these films into loss-making runs at the box office as precondition for a streaming release.

“I feel when you look at the business of small films, it is extremely shortsighted and definitely incomplete to look at any revenue stream in isolation,” producer Anupama Bose told The Core. “Theatrical or OTT sales are a mere part of a much larger pie given that you can monetise a film across several verticals and streams… and for perpetuity.”

Difference In 2023 And 2024

Last year was the year of big-budget, star-studded films. In the August 10 weekend of last year, movies like Gadar 2, Jailer, and OMG 2 together drove Indian cinema to its highest-ever box office collections. 

Now, they are dealing with a lull. Big-budget films are releasing in gaps of at least two months between them. In the ordinary course of business, relatively ‘smaller’ or independent films would have plugged such gaps, drawing smaller but paying audiences to promising stories, not big stars. 

When Bose and Zee Studios first released Joram in cinemas in November last year, the film didn’t do all that well despite a limited release. The film, starring Manoj Bajpayee, depicts the exploitation of India’s indigenous people by our oppressive system, a difficult subject far removed from the breezy glamour and easy nationalism of recent big-budget hits. 

Despite an underwhelming theatrical run, Joram got another shot at the box office. It was re-released in cinemas in February this year. According to Zee Studios, fans pushed them to rerun the film in theatres. It is now streaming on Amazon Prime Video.

Joram is the odd exception, as is Vidhu Vinod Chopra’s 12th Fail, a surprise mid-budget theatrical release that became a hit late last year. But these remain the exception. Mauli Singh, a Mumbai-based independent film producer and publicist, said that there are only a few small or mid-budget independent films with funds for a theatrical release.

What About OTT Platforms?

When OTT platforms were launched, they became a new lease of life for indie films such as Thithi (2015, Kannada), Soni (2018, Hindi), and Village Rockstars (2017, Assamese, National Award winner). But now, as platforms cut their budgets and competition dwindles with the merger of Viacom18 and Disney-Star, the options for small films like these are fewer. 

“The 2010s were a golden time for such small films because there was an audience that came to theatres for them,” Singh says. “There were programmes to support them such as PVR Director’s Rare. Now there is a definite shift; post-pandemic audiences are not coming to the cinemas like they used to. ” 

For most small filmmakers, releasing their work even on a few multiplex screens can be prohibitively expensive. “It can take up to Rs 10-30 lakh to release a film even on a handful of screens,” Singh said. “You also need Rs 2-3 lakhs to arrange a premiere, and more money for a P&A [print and advertising] budget as well.” 

For a film made with a couple of crore rupees, this additional cost can be the difference between making a profit or losing money on the project. 

Fuzzy Crystal Ball

The struggle of small-budget films isn’t new. But it is compounded by the fact that it’s getting harder to judge what sort of film will strike a chord with an increasingly finicky audience. 

“As producers, we are all still trying to understand what the consumer trend is,”  Shibasish Sarkar, chairman of merger and acquisitions special purpose vehicle International Media Acquisition Corp and president of the Producers Guild of India, told The Core. “Whatever we have learned about audience preferences in the last 30-odd years is not lining up with current reality anymore. Everything has shifted.” 

Because of this uncertainty, producers aren’t willing to bet on ‘content-driven’ films that come without the safety of a big star. “All the signals of the past two to two-and-a-half years point to the fact that audiences are not willing to come to theatres for small or medium films. This is happening in all three major markets: Hindi, Tamil, and Telugu,” Sarkar said. He also said that producers aren’t sure why recent hit films were able to cross Rs 300-600 crore in box office collections, while other similar ones were unable to do good business. He also estimates that overall cinema footfalls in India are still 10-15% below 2019 levels, while in the US, the gap is closer to 20%.

This isn’t just a problem for small filmmakers. To solve their persistent footfall problem, cinemas need to offer more films around the year. Not all of them will be tentpoles that can potentially pull in big crowds.

What Are Halls Doing?  

To address this problem, cinema chains have been relying on stopgap measures instead. Take PVR-Inox for instance. The company introduced a ‘Passport’ programme last year, which allows buyers to watch a set number of films on weekdays for a monthly subscription fee. The idea was to nudge a viewer more frequently into the theatres, hoping it “propelled them to watch the medium and the small scale films,” Gautam Dutta, PVR-Inox’s co-CEO for north and south told investors in a call (pdf) last month. The company is relaunching the product but hasn’t specified a date. 

Besides this, PVR-Inox has also been re-releasing older films to boost occupancy on lean weekends. This January, Yash Raj Films announced a ‘Nostalgia Week’, releasing the studio’s older hits in PVR-Inox, Cinepolis, and Miraj Cinemas multiplexes for the competitive price of Rs 112 a ticket. This isn’t a new tactic. During Diwali 2020, at the height of the pandemic-induced lockdown, Yash Raj Films had a similar week of re-releases in cinemas. In 2022, PVR Cinemas organised a week-long festival to honour actor Amitabh Bachchan, re-releasing his cult classics across theatres. 

These festivals are largely confined to a few screens in big cities such as Mumbai and Delhi. “As part of our 'Nostalgic Show' and 'Showcase' initiative, we periodically feature re-releases of retro films, presenting iconic movies to attract new audiences to cinemas,” Sanjeev Kumar Bijli, executive director of PVR Inox told The Core in an email. “This approach allows younger generations to discover and appreciate timeless films they may have missed,” Bijli added that among the top-performing re-releases for the cinema chain were Yeh Jawani Hai Deewani, Jab We Met, and Dilwale Dulhaniya Le Jayenge, with over 800 screenings and an average occupancy rate of 35-40%. 

But, producers say, re-releasing old films is more marketing than actual money. 

“Cinemas have been re-releasing old films for a while now. This is a tried-and-tested strategy,” says the head of a large, multilingual production company, requesting anonymity. “At the risk of sounding harsh, this is mere tokenism. Older films like Jab We Met (2006) and Don (1978) are released only on two to three screens in a big city like Mumbai, for a total of say, 10 shows. At best, these will sell some 2,500 odd tickets. But it’s great for creating buzz. I make a video showing a hall full of people celebrating a film, and audiences are back in the cinemas.” 

How To Plug The Gap?

There is enough gap in the supply of films to theatres that they are willing to release old favourites, a pandemic-era tactic. Yet, some mid-budget films run for a limited time in theatres because OTT platforms acquiring them demand it. For over a year now, streaming companies have been pegging the price of the films they acquire to their box office collections, making a theatrical run mandatory, even if it is limited to a few screens (read this edition of The Impression to know more). 

This might secure the supply of at least some movies whose producers can afford the hefty costs associated with going to the big screen. But with OTT budget cuts and a picky audience, these films may be exhibiting at a loss simply so that they don’t lose out on their deals with OTT platforms, their main source of income, film producers said. That isn’t good business for anyone, whether platforms, small filmmakers, or theatres. 

But for the small-budget filmmaker, there may be a more optimistic way to look at this. Producers like Bose say that while a short theatrical release isn’t likely to yield profits, it can help extend a film’s shelf life and eventual earnings. Of course, provided the film is not budgeted extravagantly. 

“How can a Rs 15 crore film recover its money from a two-week run across 50 screens with two shows a day? There is no way in hell this math is going to add up, right?” Bose asks. “[This is all to help] build visibility and perception and step up the valuation so that the sales can yield better rates. What you see is what will sell… like in any other industry.”