Projects are being cancelled, producers are holding back releases of new movies and actors have lost jobs.
Bollywood falls victim to economic slowdown
KOLKATA // The global economic downturn has cast its shadow on the glitz and glamour of Bollywood. Projects are being cancelled, producers are holding back releases of new movies and actors have lost jobs. The economic crisis in the world's biggest film industry, which has been producing up to 500 movies a year (until recently, twice the output of Hollywood), has caused massive layoffs among junior actors while megastars are being forced to accept pay cuts - an unheard-of trend in Mumbai's film industry.
"Budgets in the case of some films have faced 80 per cent slashing on the original value. I have heard of pay cuts for actors 50 per cent and more," said Vijay Khemka, president of the Film Federation of India. "Many who until recently believed that Mumbai's film industry was insulated from the global economic meltdown have all been proved wrong." Sources in the Indian Motion Pictures Producers' Association said the money crunch is severe all around and people are finishing only those projects in which they which they invested long ago.
"Film production is drying up. There are absolutely no new project launches. The story is over for small budget films and producers. Only the biggest will survive, but they too will take a severe beating," said Anil Nagrath, the IMPPA president. "Right now up to three films are being released every week. But soon you will not see more than one film release every month." Films already in production are also being hit by the financial crisis. A few days ago, T-Series, one of India's biggest production houses, asked Pooja Bhatt to slash expenses on Kajra Re, which she had planned as a big budget movie.
Before the ripple of the global crisis reached Bollywood, T-Series had agreed to pay 500 million rupee (Dh38m) to Salman Khan for his appearance in an upcoming movie. But the director of the movie Anees Bazmee has been forced to renegotiate the financial deal with the superstar because of the unexpected budgetary crisis. In a similar situation, executives of another production house, UTV, are reported to be trying to renegotiate a deal worth 600 million rupees with Akshay Kumar, a popular action star, signed some months ago.
Komal Nahata, publisher of Film Information, a film trade publication, said that apart from attempting to slash actor's salaries, production houses are also laying off staff, leading to delayed production schedules. "A sense of insecurity now pervades all production concerns, more so in Bollywood's corporate houses. The mood is one of fear and people are worried about where this slump will leave them," Mr Nahata said.
An official at Adlabs production house, which has seen its share prices plummet to 200 rupees, from 1,500 rupees over the past few weeks, said it has shelved many of its new projects because of the reigning economic uncertainty. Such big producers as Studio 18, UTV and even Reliance ADAG are in bad shape. Some analysts said if Bollywood did not pay its actors upfront, which is the usual practice, some crisis-ridden houses could have risked going ahead with at least some movies that had higher possibilities of turning out to be box-office hits.
"The advance culture stretches from artists to technicians and production facility vendors. With a sudden funds squeeze, both from banks and non-traditional funding sources, there is no money to fund films," said Shailendra Singh, managing director of Percept Picture Co, a production house. Amod Mehra, a film trade analyst, said production houses are unable to say whether or when the work will begin on shelved projects.
"Money had been flowing into the industry like a river, but suddenly the corporates have become tight and the money has dried up. The effects of the recession are slowly seeping into Bollywood. Things have become so uncertain that in September our film industry was ready to pay Akshay Kumar as much as 710 million rupees for a film, but today even a 30 million rupee film is not selling," Mr Mehra said.
"The bubble has burst ? Not a single project with a star cast has started production or been announced in the past three months. The prices for the actors and technicians will have to come down a lot further or else this industry will go to the dogs." Some observers said the production of films in Bollywood also is dwindling because, despite the recession, some stars are continuing to ask for astronomical payments and production houses are giving in to their demands.
"The worst is yet to come. But they are the architects of this doom. Log by log they have made their own pyre," said Mahesh Bhatt, a veteran Bollywood star and activist, his target being producers and their "absurdly" highly paid stars in megabudget movies. One Bollywood filmmaker, Vipul Shah, said: "Internationally, the talent cost is generally never more than 20 per cent of a movie's budget. But star salaries in India constitute 60 per cent of the total budget. This salary of the A-league actors must be brought down to a sane level right now, as the first measure to tackle the crisis."
Pritish Nandy, a producer, said the crisis in Bollywood will bring about a much-needed self-appraisal that could then lead to the betterment of movies in general. "The financial crisis could also bring back good sense, respect for the craft of filmmaking and restore focus on creative issues in Bollywood." email@example.com