Boomtime in Bollywood?

BOLLYWOOD MAY not be as big as Hollywood, but it is getting bigger every day. At a time when the financing of films is under scrutiny, trade insiders point out that the nature of the industry has changed dramatically in the last five years. From being speculative and unreliable investment, films now promise virtually sure returns.

With the Government having acceded to the long-standing demand of the film world to be granted industry status, the nature of finance has changed. In the last couple of years, almost 30 entertainment companies have been listed on the stock exchange.

Film exports have grown from around Rs. 5 crores 10 years ago to 10 times that amount today. They are expected to exceed Rs. 100 crores this year, just under 10 per cent of the reported Rs. 750 crores to Rs. 1,000 crores that Bollywood generates with the release of roughly 150 films each year. Last year, the Government made overseas entertainment earnings tax free.

The year of change, so to speak, was 1994 with the runaway success of ``Hum Aapke Hain Koun'' which did well in India and abroad. In the next two or three years, a combination of a check on video piracy, better production values, the popularity of individual stars and the overseas market catapulted film profits into another sphere.

An additional factor was the growth of the music industry. Seven major international music companies have entered India and some of the leading Indian firms have also gone public. Where music rights for films sold for Rs. 10 lakhs to Rs. 12 lakhs, today they fetch Rs. 10 crores to Rs. 12 crores.

With the increase in profits, the rates charged by the big stars have also grown exponentially with the lead actors getting up to Rs. 3 crores for a film. Predictably, the top female leads earn only about half the amount. And directors and others down the line are also seeing some of the benefits of this increased flow of revenue.

Another added dimension is the television software sector which has attracted investment and interest from the big players in the film world. Some of the biggest names in the film industry such as Ramanand Sagar, B. R. Chopra, Manish Goswami, Jeetendra, the Adhikari Brothers and recently Ajay Devgan have expanded to include the small screen, and even the new media, in their ambit.

Unlike in the past, today producers recover the costs of their investment as soon as a film is released and regardless of whether it does well or fails in the theatres. Producers pre-sell copies of the film to distributors. They also sell music rights a month or two ahead of the release of the film. By the time the film is released, they are able to pay the financier (who may charge interest rates ranging from 1.5 to 4 per cent a month) and make a handy profit even before the box office begins yielding results.

Today, big financiers such as Mr. Bharat Shah, who was recently questioned by the Mumbai police for his association with Nasim Rizvi, ask additionally for 50 per cent of the profits and world rights of the film. Thus, in the current controversy over the release of ``Chori Chori Chupke Chupke'', Mr. Shah has challenged the decision of the Mumbai police to seize the negative of the film, and thereby delay its release, by arguing that the rights of the film belong to him and not to Rizvi, who is in police custody until December 27.

Given this kind of system of finance and returns, why would the film industry have to turn to the underworld for finance, asks Mr. Amit Khanna. On the contrary, he points out, film companies are now turning to the public for finance. This would have been unimaginable a decade back.

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