How Bollywood Works

 

bollywood-business

Have you ever wondered how Bollywood works? How do they make money? Who are all the different players in the business? I always have. So I got digging.

First things first. Bollywood is the ultimate insider business. Bhai-bhatijawaad ka ultimate version. Don’t believe me? Check out this Wiki page. Almost every major film star, producer, director is part of these families!! Which is why we see “Star Kids” getting lavish launches – even when some of them are really not upto the mark. (Let us be kind and not take names. Yes. Not even the names you have in mind.)

But then if you are making a bad film, a bad product, then shouldn’t the market punish you? The logical answer to that would be Yes. You know – bad Maggi, no one buys it (Except Baba Ramdev Maggi. Everyone buys that) But that rarely happens in the case of Bollywood. First of all – there are limited number of “Producers” in the industry, so they enjoy a certain clout (And are part of camps!). Quite a large number of bad products are maaf (I mean, would you not forgive Bhai for Veer? Or Aditya Chopra for Rani Mukherjee’s Dil Bole Hadippa?) Secondly, insiders are part of the entire Bollywood chain – and its always difficult to say no to family. If someone asks you to support your chachaji and distribute the film; or to support your bhanja and finance the film – wouldn’t you do it? I would, you know.

So what is the typical Bollywood process of putting out a film?

It starts with a story (Surprisingly yes, sometimes the story is central :D). Someone puts together a story and goes to a Director or a Producer to pitch the concept. Now a days, many production houses have their own story writers on payroll (just like software engineers, business analysts, consultants) who keep writing stories and presenting to their bosses. Else – producers buy these stories. Then producers (like KJO, YashRaj) figure out who will direct and with which stars. Sometimes the producer is the director as well (like KJO); sometimes the star is the producer and the director as well (Aamir Khan, Ajay Devgun) and sometimes just the star is enough (Salman Khan :D). A very basic version of the script is developed and is then tailored to the preferences of the star. (Preferences can range from age lowering/increasing to shooting in US/Europe instead of Bandra/Delhi). Once the script and the entire team is locked down – the budget of producing the movie is worked out. Say the budget is 100Cr. The producer will put in some amount and bring in other financial partners to arrange the balance amount and spread the risk (These partners range from businessmen, diamond merchants, corporates, banks and sometimes even some shady folks). The profit shares are decided in advance – with the producer taking a larger share for managing the entire thing. And once the budget is arranged, the actual film making process starts.

Most movies are typically shot over 60-90 days, with another 60-90 days of post production work (Editing, Special Effects, Promotional Videos with Badshah, Mika Paaji, Sunny Paaji Leone) and the film, or the product, is ready in 5-6 months. Once the product is ready – producers market their film on various platforms (Kapil Sharma Show, Comedy Nights Bachao, Bigg Boss, Censor Board and other controversies, News Channels, TOI, Social Media etc) and also to distributors who buy out the film and arrange for them to be exhibited in theatres. Sometimes producers also distribute their films themselves to cut out the middlemen. And this is where the producers make their money. Dhandhe ka Usool hai to sell their movie for an amount higher than or at least equal to the budget. Simple right? Now bigger the stars, bigger the production house – the higher the chances of making a profit. (YRF producing a Salman Khan movie? You better buy it for the amount it is being sold for. Maybe even before its made!) There are different arrangements for this transaction – upfront payment, profit sharing, long term relationships, buy Salman Khan get Ranveer Singh free etc. In essence, the producer passes on the risk to the distributors and the exhibitors (Theatres Owners, Multiplex chains). They in turn push up the ticket prices and recover these amounts from us – the mango peoples. Additionally – the producers sell TV rights, Music Rights, Overseas rights for more money and basically make profits even before the movie is released. And if the movie does well – that’s it. The producers and the stars rake in the moolah and then go about buying houses, cars, awards – you name it!

But sometimes people do lose money in Bollywood. Make a bad product with an over-inflated budget and then sell it onwards at a high cost (Like the Bourneville Chocolates. Karela tastes better). And if the audience gives it a thumbs down – that’s it. No one in the theatres in this case, equals a big loss. But this happens only once in a blue moon. All the other times – people recover, or make money on films. What a great business to be in!

This is also possibly the reason why bad films keep getting made! (Let’s be kind and not take any names again!!)

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