Bollywood is Losing its Luster on the Silver Screen

Bollywood had a difficult 2024 because to the underwhelming box office results of its films. However, as the year draws to a close, budget difficulties and creative obstacles still affect the creation of new material.

Speaking confidentially, a seasoned producer disclosed, "No new films are beginning production even as the year draws to a close. In terms of creativity, producers are stuck rewriting or evaluating original screenplays since they lack trust in them. The finance pool has drastically decreased, which has made the industry's problems worse.

Mid-sized Hindi movies with a strong concept, such as Munjya, Stree 2, and Shaitaan, surpassed box office estimates in 2024. Big-budget movies like Maidaan, Fighter, and Bade Miyan Chote Miyan, on the other hand, did poorly, failing to draw crowds and meeting trade circuit expectations. When compared to 2023, the total gross collection of Hindi films in 2024 dropped by 25.1% to Rs 4535.89 crore, according to box office data analysis firm Sacnilk.

Due to the low box office performance of recent films, studios, who normally produce 30 films a year and are a major source of finance for new Hindi films, have taken a cautious wait-and-watch stance.

The founder and CEO of Abundantia Entertainment, Vikram Malhotra, stated: "The number of studios that are able to actively finance movies is decreasing. Several studios were supporting initiatives a few years ago. However, the majority of them, if not all of them, are in pause or complete stop status right now. He went on to say that this is quite concerning since the sector cannot grow to a sustainable size without these key stakeholders."

The number of studios funding films has decreased due to a wave of consolidation among major studios, notably the merging of Viacom18, Disney, and Star.

International studios are similarly in a wait-and-watch phase, giving domestic markets that generate more income and subscriber growth precedence over the Indian market.

Obtaining movie money through broadcast or satellite rights has grown to be very difficult. "Broadcasters are not investing in films as viewership has declined," an unnamed producer clarified.

Channels have been compelled to cut the fees they pay for movies in half due to the slowdown in advertising, the decline in pay-TV homes, and the rise in popularity of streamers.

The interest of banks in funding movies has drastically decreased. "Public sector banks financed less than 10 films annually in the last seven years, compared to 20-25 films annually between 2001 and 2010," said industry veteran Sanjay Bhandari. He blamed this decline on the underwhelming performance of Hindi films and antiquated financing practices, which saw banks charge 10-12% interest rates on film loans.

For producers, using private financing—which mostly consists of individual financiers—is costly because the interest rates charged by these financiers are double those of bank loans for movies.

Due of these difficulties, streaming and song rights are becoming crucial sources of finance for new movies. Nevertheless, streamers have gotten more picky even if they require new content to keep subscribers. Compared to epidemic levels, their expenditures for purchasing or commissioning movies have decreased by 40%, and producers' prices per film have been cut by 40–50%. Consequently, streamers are only supporting a small number of new movies.

Experts believe streaming services will continue to be a major source of movie finance despite obstacles. According to the FICCI-EY 2024 research, streaming rights sales will generate Rs4,200 crore by 2026, a 20% increase. Producers who are optimistic see the current financial crisis as a short-term one and anticipate that things will improve in six months.

"Once Zee5 returns and the combined Jio-Star entity enters the ring, we will be back to a full-throttled democratic market with more options, more players, and more uptakes," stated Tanuj Garg, managing partner of the production company Ellipsis Entertainment. "At the moment, filmmakers are putting undue pressure on major players like Netflix and Amazon Prime to look for funding through the sale of streaming rights," he continued.