Bollywood feels inflation heat, but takes it in strideJuly 21st, 2008 - 2:56 pm ICT by IANS
By Jivraj Burman
Mumbai, July 21 (IANS) Bollywood, India’s Rs.96 billion ($ 2.3 billion) film industry, has taken a beating due to rising prices. “The rise in petrol and diesel prices affects the industry. The making of a film involves lot of travelling and with the increased fuel price the budget shoots up. As a result the cost of production goes up,” filmmaker Pahlaj Nihalani told IANS.
Pointing out another adverse effect of inflation, Kiran Shantaram, owner of Rajkamal Studio, said: “When the inflation rate rises, the value of the rupee comes down and dollar goes up. Most of our raw stock like film rolls are imported and as a result the cost of the production goes up.”
Then, the one aspect over which Bollywood producers have no control is the star remuneration. While the respective craft associations fix the wages of technicians and other workers, stars fix their own prices, which vary depending upon the box-office success of their previous releases.
Ravi Gupta, CEO Mukta Arts, said: “The skyrocketing fees of stars is the only problem that is affecting the film industry.”
With regard to the current inflation, neither technicians nor cine workers are demanding a hike in their wages, nor has producers asked the associations to adjust the wages of their members in view of the inflationary trend.
Many in Bollywood believe that the corporate houses are so flush with funds they do not know where to spend them. While they do not think twice before paying the handful of reigning stars their fancy prices, in some cases, it is they who pay them the prices they least expected in order to have them on board.
Right now, shooting for about 10 Bollywood movies are in progress at different locations abroad. Producers, on the other hand, prefer to take their units to foreign locations.
“To tell the truth, if one does not count the travelling and lodging expenses, shooting abroad comes cheaper than shooting in India in terms of man days of work,” said Pahlaj Nihalani.
Secondly, when abroad, they have the stars all to themselves and so they are in a position to extract more work from them.
As far as the consumers are concerned, the middle and lower middle class people may be complaining about the rising prices of essential commodities, but they are not equally vocal about the high cost of entertainment.
For instance, when Aamir Khan’s production venture “Jaane Tu… Ya Jaane Na”, made on a budget of Rs.300 million, opened July 4, it registered 100 percent revenue collections across India. It only meant that, for the movie clientele, any price is good for wholesome entertainment.
“The demand for entertainment in India is inflexible. It may sound ironical, but it is a fact that when the economy is down, the demand for entertainment grows and for a good reason,” said chartered accountant Mehul Parekh.
Parekh, who is working with one of the directors of the Mumbai-based Infinity Film Completion Service, also said that for common people, entertainment is an escape route from the harsh realities of life.
“Bollywood provides the best of all escape outlets. Over the years, Bollywood movies have become an inverted necessity for most people,” Parekh observed.
Shyam Shroff of Shringar Films said: “Cinema is the cheapest form of entertainment - inflation doesn’t affect it at all. It is bad content that affects a film’s box office collections.”
It’s an undeniable fact that in India, movies provide the cheapest form of entertainment.
“Some people may complain about the high ticket rates in multiplexes. But one should not forget that for all the comfort they provide, going to watch a movie there is still cheaper for a family than eating out in a restaurant,” Parekh added.
He stressed that since no other form of entertainment was as popular as the movies, the demand for them would never wane, inflation or no inflation.
Inside Bollywood, there is no indication that productions or other activities related to filmmaking have slowed down because of inflation. Bollywood economy is unharmed because it operates on its own axis.
“The film industry doesn’t depend upon market forces because it generates its own funds,” said filmmaker Manmohan Shetty.
For example, Bollywood may have suffered a loss of Rs.2.5-3 billion in the last six months on movies that failed at the box-office. But its in-built economy is robust enough to withstand the loss.
When a “Race”, a “Jannat” or a “Jaane Tu..Ya Jaane Na” succeed at the box-office, the Bollywood economy automatically adjusts the loss caused by the failure of a “Love Story 2050″ or a “Thoda Pyaar Thoda Magic”.
“So if the industry tends to consider inflation or the slow-down of the economy in general as an extraneous aberration, it should not be a matter of shock. Because its own economy is self-sustained,” said Parekh.
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Tags: adverse effect, bollywood india, box office success, burman, corporate houses, craft associations, diesel prices, fancy prices, film industry, film rolls, fuel price, gupta, inflation rate, lodging expenses, man days, mukta arts, previous releases, raw stock, remuneration, rupee