Producers, studio heads, and top executives of Bollywood felt that the business model of Bollywood needs a correction, starting with the actors’ fee.
“The massive shifts and headwinds for the movie business now aren’t only in the theatrical market but also in the streaming space. The volume of content being acquired and values are deeply impacted. It is critical for all stakeholders in our value chain to be course and cost correct, “said Amrita Pandey, CEO, Junglee Pictures. “I think talent fees, among other costs, definitely need to be aligned with market realities where no longer is an opening weekend or a streaming fee guaranteed with an actor’s name or film scale.”
“The Hindi film industry’s business model has gone for a toss,” said a top producer, who has produced over 50 films and a few web series. “The only way it will work is if the stars come down to earth. We have been talking about the rising cost of the stars for a decade now, but nothing has happened.”
As per industry estimates, Akshay Kumar, who has had a series of flops—”Bell Bottom,” ‘Bachchhan Paandey,” and “Samrat Prithviraj”—is asking for Rs 117 crore per film, and reportedly has no dates till the end of this year.
The price for Shahrukh and Salman Khan, who charge some amount upfront and a share of the profit (backend), also comes close to Rs 100 crore each, while Aamir Khan is the only actor, who doesn’t charge any amount upfront but takes an 80% share of the profits.
Among other actors, Ranbir Kapoor and Ranveer Singh are charging around Rs 50–60 crore each, Kartik Aryan has increased his rate to up to Rs 40 crore, Shahid Kapoor is looking for Rs 35 crore, while Varun Dhawan is quoting Rs 30 crore per film.
“What is needed is a genuine course-correction, a fixing of the economy, and a re-calibration of priorities,” said Tanuj Garg, managing partner, Ellipsis Entertainment. “That’s something Ellipsis, as a content creator, is extremely mindful of, and that’s put us in good stead. Content and budgets need to be designed in a manner to enable everyone on the value chain to make money.”
Garg is the producer of films like ‘Ragini MMS’, ‘Looop Lapeta’, and ‘Tumhari Sulu’.
Many industry experts say that with the star’s prices going where they are, the Hindi film industry is already in deep trouble, without even considering the creative part of the business.
“Bigger producers are insulated so far because they can sell their films to OTT players, but with those players also looking at cutting costs and tightening belts, soon the legitimate producers will not have money to put into the films,” said the head of a large production house. “It’s a vicious circle. All the money is going into actors’ pockets and not coming back to the industry, making filmmaking an unviable business.
Some feel it’s not just the actors’ fee but the mismatch in the value-chain across the entire creative and distribution industry.
“We need an equitable distribution of risk and reward,” said a head of one of the top film studios. “Ultimately who in the value chain is paying for the movies – earlier it was satellite, now its OTT. The biggest paymasters now are DisneyStar, Viacom18, ZEE, Sony, Netflix, and Amazon. We have not created enough avenues. While theatrical, OTT, satellite, overseas and music rights are being monetized, what about the ancillary rights? Unlike the West, we have not created any franchises that can outlive film assets.”
Most of the experts pointed out that with digital players paying top dollars for film rights, satellite and theatrical revenue are going down.
“What we have done is shift or replace one revenue stream with another. The overall business needs to grow, the share of wallet of consumers needs to grow, “the executive added.
The studio head, as well as film producers, believe that Bollywood needs performance-linked compensation.
“Big stars are taken because of their fans and pull among audiences. An easy way could be to fix their fee at the first day’s box office collection. But there will always be some spoilers who will come in with the lure of glamour and money from the gutka business or the UK lottery and pay the actors whatever they ask for, “said the producer quoted above.
The studio head added that in the current system, most of the actors have no skin in the game. “Their fee should be linked to box office performance and viewership ratings on the TV premiere.”
As an industry, many feel that the most important thing is to grow the sum of parts, as it won’t serve any purpose if the overall pot remains the same.