Making smaller-budget Hindi films is getting harder, threatening industry growth

“Since there is so much entertainment available in content form on streaming platforms and on social media right at home, people need to be given very compelling reasons to step out to a theatre to watch a movie,” says Srishti Behl, chief executive officer (CEO), Phantom Studios.

Getting audiences back into theatres has been one of the biggest challenges for filmmakers since cinema halls opened up. This has had an adverse effect on small-and-medium budget films’ theatrical business, while most big-budget spectacles have taken up the lion’s share in cinema revenues.

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For instance, 2023 was the best-ever earnings year in theatrical revenues as the Indian Box Office grossed Rs12,226 crore compared to Rs10,948 crore in 2019, according to an Ormax Media report.

But about 40 percent of the total box office earnings was contributed by only 10 films, even though close to 1,000 films released in cinema halls. Jawan was the highest grosser collecting Rs734 crore, the Ormax report adds.

An almost vacant seating map of a multiplex screen, shot on location at Miraj Cinema's screen, Goregaon, Mumbai. Image: Hemal Patel for Forbes India

“Most films that have done theatrically well last year were big-budget films with top actors,” says Atul Kasbekar, partner, Ellipsis Entertainment.

For this story, I have only taken Hindi-language films into consideration. In 2023, more than 80 Hindi films released theatrically, shows a back-of-the-envelope calculation. But only a handful of star-studded, high-octane and big budget outings including Pathaan, Gadar 2, Rocky Aur Rani Ki Prem Kahaani and Animal, could be considered profitable on the theatrical release front.

The business of small-to-mid budget commercial films has been worse off. These films are made on a budget of Rs15 crore to Rs50 crore, with slightly-known or completely fresh actors, and need to have a compelling storyline. Possibly in romance, comedy, and drama, among other genres.

Films made in this segment are also the backbone of any film industry as they not only become a playground for new writing, acting and directing talent, but also provide employment opportunities to fill hundreds of designers, editors, vendors, technicians, and spot boys, among other crew members.

New web series being shot on location in Mumbai at the set of School Friends, produced by Rusk Media. Image: Hemal Patel for Forbes India

“Such films oil the wheels of the industry. If only a few big blockbuster films are being made in a year, then it is not a sustainable industry in the long run. It won’t have a workforce to be able to support it,” says Siddharth Roy Kapur, founder and managing director, Roy Kapur Films.

Last year, barring 12th Fail, The Kerala Story and, reportedly, Satyaprem Ki Katha, Zara Hatke Zara Bachke and Sam Bahadur, hardly any other low-to-mid budget films was able to earn big bucks on the big screen.

More business casualties on the lower-budget film front is making studios and filmmakers slightly more apprehensive towards backing such projects.

Marketing, a necessity

A mainstream commercial filmmaker is not only competing with their peers’ films to get audience’s attention before release, but also with gaming platforms, multiple non-Hindi language films, concerts, and live events.

“Our need to get entertained also gets almost instantly satisfied by something like a creator on social media platform. Or different kind of apps,” says Ankur Garg, co-founder and producer, Luv Films. The Mumbai-based production house has produced films including Sonu Ke Titu Ki Sweety, Malang, Vadh, and Tu Jhoothi Main Makkar.

“Now if you want audiences to come see your film in theatres, then the movies genuinely need to be good or marketed well to generate enough curiosity on viewers’ mind. The times when even a half-baked film could generate some theatrical business is gone,” says Amit Sharma, managing director, Miraj Cinemas.

Marketing a film has always been important for elevating a project and bringing it to the audiences’ purview.

When UTV Motion Pictures was releasing Khosla Ka Ghosla, in 2006, the amount spent on marketing by the production house was almost equivalent to the film’s production budget, claims Ray Kapur Films’ Kapur. The same year, UTV was also releasing Rang De Basanti.

“One was a big-ticket blockbuster with Aamir Khan, which was pushing the story envelope but was obviously a theatrical experience. The other film would be considered a niche film. But we felt that it was a great entertainer and went ahead on the marketing spends,” says Kapur, UTV Motion Pictures’ former CEO.

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Made on a budget of Rs3.75 crore, Khosla Ka Ghosla’s total net gross stood at Rs 4.6 crore, according to Box Office India. Adding sales non-theatrical rights including satellite and music the small-budget film became a profitable venture for UTV.

But in the current digital age, marketing a film well is not an option but a necessity.

With the limited entertainment-time quota and attention span, a viewer’s 24 hours has gone back to being divided among work, spending time with loved ones, travelling and various other things.

Hence, more money is required behind marketing a film other than the production cost, claim at least half a dozen filmmakers and film marketing experts Forbes India spoke with.

A risky affair

Producing a film has also gotten expensive, claims Kapur. “A film for a theatrical release needs to be of a certain scale and size,” he adds.

The newly evolved audience, who has been exposed to world cinema, expects a quality product in cinema halls, especially when they are taking time separately and paying extra to watch a film.

Increased production cost and increased marketing requirements means more money needs to be invested behind a theatrical project.

A new project in post-production stages at Nube Studio LLP, Mumbai. Image: Hemal Patel for Forebs India

“The ability to be able to fund movies like that is now limited to a few corporate enterprises,” Kapur adds.

When there are so many distractions, audience’s evolving preferences and high production cost, the lowest-hanging ways to grab viewers’ attention is by making high-octane films, possibly in the superhero, action and adventure genre, and cast top actors from the industry to helm the project.

“These are difficult times and during such cycles the industry gravitates towards the comfort of tried and tested formulas,” says Phantom Studios’ Behl.

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While no actor in the current times can guarantee a box office success, having a star helps in selling a film’s non-theatrical rights compared to a fresh face. But now, the revenue generated from these rights have also become less lucrative making it the final nail in the low-budget film coffin.

Fall of lucrative monetisation streams

Streaming platforms, which were dubbed as the holy grail for new filmmakers, have increasingly reversed their stance in the post-pandemic times.

Newly launched around 2016, Netflix and Amazon Prime Video were spending huge sums to build their local content libraries, the spends and greenlighting of projects only got accelerated due to the lockdown viewing habits. Even Indian players including Zee5 and Jio Cinema greenlit many projects to bulk up their content libraries.

At the height of its acquisition and licensing spree, Netflix could license indie films like Cargo and Chauranga, and also commission Alia Bhatt-starrer Darlings.

Spends on streaming content production has been getting revised across major American streaming platforms as investors want to see profitability instead of subscriber growth. Domestically, Jio Cinema is becoming choosy about backing streaming projects, according to a Mint report. The Reliance Industries-owned platform was unavailable for comment.

Hence, a smaller number of films are getting greenlit or licensed across platforms compared to lockdown years, claim top film producers and studio executive Forbes India spoke with.

A detailed query sent to Netflix requesting a comment on its Indian content slate did not elicit any response until the publishing of this story.

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Amazon Prime Video also did not clearly confirm if the platform had reduced the number of films it acquired or commissioned. But the firm did say “Our vision includes selecting stories that not only entertain, but offer a distinctive perspective to Indian storytelling that will not only stand on their own but also potentially evolve into lasting franchises,” Manish Menghani, Director Content Licensing, Prime Video India, said in an email response.

Revenue generated by selling satellite rights is also deteriorating. Pre-pandemic, the revenue from satellite was 20-25 percent higher than what it currently is on small-to-mid budget films, claims Luv Films’ Garg. “A producer could recoup close to 70-75 percent cost through non-theatrical revenue. But in current times, the recoupment would not be more than 40-50 percent, making such films riskier proposition for a producer,” he adds.

Shiladitya Bora, founder of independent production house Platoon One Films, agrees satellite right sale to becoming a less lucrative revenue stream.

This increases the need to release a film theatrically as, if successful, the project becomes attractive to streaming platform and TV channels. But getting screen space for such films is getting harder.

With over a billion people, India also has less than 10,000 screens. As of January 2024, China, the world’s biggest box office market, had 86,310 screens, according to a report by Statista.

If a film is not attracting an audience, then it only makes sense for multiplexes to allot screens to a ticket-selling film. A few non-Hindi outings, including RRR, Kantara, Leo and Hanu Man, have made good money and multiplex chains are more willing to give screen spaces to such movies.

Technical developments such as adjusting colour and editing happening on an upcoming project at Nube Studio LLP, Mumbai. Image: Hemal Patel for Forbes India

“South Indian films have been running on TV channels for over a decade, creating an audience in the Hindi-speaking belt,” says Miraj Cinema’s Sharma. The exposure to Tamil, Malayalam and Telugu content during the lockdown has made audiences accepting of Southern films in theatres.

To be sure, the situation in the Tamil film industry is not too different from mainstream Hindi films. “Spectacles with a big actor, especially if it is an action film with a bit of gory action has been getting people to theatres,” says Pushkar AKS, producer at Wallwatcher Films, and part of directing duo Pushkar-Gayatri. The smaller films, which do not have an engaging premise, are finding difficulties in attracting a crowd.

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“Either a film is a super success or there is almost no business. There is no in between,” adds Pushkar. Malayalam cinema's audience, on the other hand, did not seem to have a genre or spectacle bias. Successful films came in the form of horror- comedy Romancham, 2018: Everyone is a Hero focusing on Kerala floods, to action movies including RDX: Robert Dony Xavier and Kannur Squad.

So, what now?

Established production houses and films studios are not completely shunning away lower budget projects but are reassessing their strategies.

But the path for these films’ release and monetisation has become harder. More so for smaller production houses. In such times, emerging filmmakers are finding different ways to earn from their craft.

Suraj K, who started as a Marathi film producer in 2012, wanted to foray into Hindi film production in 2020. But migrated to producing Malayalam film Kasergold, under Saregama’s Yoodlee Films, for Netflix. He had the risk appetite to produce a Malayalam movie as the cost of production was lower than a Hindi film.

Platoon One Films’ Bora, who so far majorly produced small-budget Hindi films, is foraying into Marathi cinema by backing Toh Ti Ani Fuji and Kadminche. As the former CEO of Drishyam Films, Bora helmed Masaan, Newton, and Waiting, among other films. Similarly, Anand L Rai’s Colour Yellow Production, which has so far produced Hindi romcom Tanu Weds Manu Returns, drama Manmarziyaan and Atrangi Re, also produced Marathi film Jhimma 2.

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Rai’s successful outing with Tanu Weds Manu, in 2011, brought him wider recognition. Similarly, Masaan broke out Neeraj Ghaywan and Vicky Kaushal, while Khosla Ka Ghosla’s success gave runway to establishing UTV Spotboy—UTV’s small-budget film division—bringing directors including Anurag Kashyap (Dev D), Vikramaditya Motwane (Udaan) and Tigmanshu Dhulia (Paan Singh Tomar) into the limelight.

But if emerging filmmakers increasingly migrate or set roots in non-Hindi films then fresh stories, resource and funds will also get diverted to those film verticals, developing a sustainable business ecosystem. The existing Hindi filmmakers would struggle to keep up with audience’s evolving taste, unable to serve them with fresh cinema, increasing dependence on franchises, remakes and casting seasoned actors.

This is already happening. Hindi film lineup for 2024 seems sparse and still dependent on top-actor spectacles and franchise films, including Fighter, Bade Miyan Chote Miyan, Shaitaan, Singham Again and Bhool Bhulaiyaa 3, for revenue generation. Other prominent trend is cross-pollination of established Southern language filmmakers and talent with mainstream Hindi films to create multi-lingual production.

Two highest-grossing Hindi films of 2023 were directed by Atlee (Jawan), primarily a Tamil filmmaker, and Sandeep Reddy Vanga (Animal) from Telugu cinema. While this increases the chances of a box office success, as the mainstream Hindi film audience currently seems to be appreciating a different filmmaking style, but this trend does not develop a new pool of directors, writers, actors, producers and crew members tuned to Hindi film sensibilities.

“Currently, it would be very hard for a newly set up, independent production company or film to break out in the theatrical space completely unsupported by the larger players,” says Phantom Studios’ Behl.

The next box office breakout romcoms, gripping dramas or even an action spectacle, with a fresh perspective, would most likely come from non-Hindi language verticals.