Inside the mind of Karan Johar, the businessman

Mumbai: It’s lunch time at Dharma Productions. A swarm of youngsters is discussing where to order in from as it pours outside in Mumbai’s Andheri area. Ishaan Khatter, the lead in the company’s latest hit Dhadak, lounges about in a yellow sweatshirt while 2 States (and the upcoming Kalank) director Abhishek Varman pitches in with food outlet recommendations. A brief walk across a wooden floor corridor leads to Dharma boss Karan Johar’s cabin.

Johar is munching on a protein bar and prefers to sit on a couch instead of the chair at the head of his desk. “I feel really awkward sitting there and people sitting in front of me,” he explains, sipping Starbucks coffee. Dressed in an oversized white sweatshirt and jeans, the 46-year-old filmmaker is calm and soft-spoken. It’s a busy office—a bunch of trophies sit on shelves as do photographs with his father Yash Johar and friends Shah Rukh Khan and Kajol. A poster of Meryl Streep’s 2011 biographical drama The Iron Lady adorns the wall.

“I’m not business savvy at all, despite the projection. I don’t know how to lead by authority, I know how to lead by compassion and that’s the one quality I inculcate in the DNA of this company,” says Johar, who claims to work 365 days of the year through weekends and national holidays. “I want to be treated as an equal, but with a certain boundary that if I have a vision, I want you to respect that. I’m very casual with everybody. You get respected because of your body of work but I don’t command it and you can see the vibe here is very easy and fluid.”

Well, after 14 years of heading Dharma, and with 30 movies under his belt, Johar certainly commands respect. The young boy who took on the mantle after his father’s death in 2004 was, in his own words, “untrained for business and completely useless until that point”. All he had to his name were two movies, Kuch Kuch Hota Hai (KKHH)—his directorial debut exactly 20 years ago—and Kabhi Khushi Kabhie Gham. Both had set new records for box office success and brought Karan’s father Yash, until then saddled with a string of flops, back in the reckoning.

The numbers

Johar’s 30 films have together earned more than ₹ 1,700 crore in theatrical box office collections within India alone, with 20 of them making clear profits. This does not include the ₹ 500 crore plus earnings of war epic Baahubali 2: The Conclusion that Dharma distributed in north India. After the entry of foreign corporate studios into the Indian film industry in 2005, very few local production houses have survived and thrived. Dharma is one of them, currently engaged in a multiple-film deal with Fox Star Studios that trade experts say is one of the main reasons for the latter’s top ranking.

Without the supply of premium films from partners like Dharma that generate the revenues they do and their understanding of the Indian market, Fox wouldn’t be half the entity it is in India today. “Dharma is surely at the forefront of movie production in Bollywood,” said Shobu Yarlagadda, co-founder and chief executive officer at Arka Mediaworks, the producer of Baahubali. This combined with Karan’s understanding of content, its potential to connect with audiences and smart marketing makes Dharma a force to reckon with in India.”

Currently, Johar is bracing Dharma for its most important phase ever. The nine films currently on the floor include five larger-than-life big-ticket productions, including one to be directed by Johar himself. The films are budgeted anywhere between ₹ 100-125 crore each. For the record, the other four medium-sized ventures are also budgeted at ₹ 30-50 crore each. Dharma is also distributing the Hindi version of Rajinikanth’s 2.0, reported to be the most expensive Indian film yet, scheduled for a November release.

That explains the nervous buzz at Dharma’s posh one-floor office in Mumbai’s Andheri. It houses about 100 employees who look after marketing, accounts, production, post-production and Dharma’s advertising cell 2.0. On an average, a Dharma movie may employ 400-500 people, but a lot of them work on contractual basis, as is the norm in the industry. Looking at their line-up, trade experts expect the company to contribute not less than 20% of the annual box office in India in the coming years.

The team and vision

Dharma is a show run by two men. While there are marketing, assistant and financial teams in place, the decisions are taken, in unison and individually by Johar and his best friend from school and chief executive officer (CEO), Apoorva Mehta. “Karan is largely the face and guiding force of the company. He’d be the one green-lighting scripts or overseeing distribution arrangements like say, tying up with the Baahubali franchise,” said a media analyst who declined to be named. “The day-to-day administrative matters, like hiring, firing, budgets or production details like shooting locations are handled entirely by Apoorva. In that sense, he’s the one running the company.”

“I’m not business savvy, for that I have my best friend from school Apoorva who’s the CEO of this company,” Johar said. “We have clear demarcations, I do creativity, he does finance, he doesn’t get into this and I don’t get into that. Left to me, I would be useless, the only subject I was weak in at school was mathematics and that continues to be my problem.”

In an earlier interview with Mint, Mehta had spoken about Dharma’s vision. “We’re all looking for a formula (that works) but unfortunately none of us has found it. Audiences are ready for new things and we have to understand, appreciate and evolve with that. As far as being profitable goes, as a company, our philosophy is very clear that a film never fails, the budget does.”

“It is (the most important phase of the company),” Johar confesses quietly when asked about the upcoming releases. “It’s the most stressful, it has the most amount of work required but it’s also the most exciting. I have a simple theory—I want to make either high-concept or big event films that I feel a theatrical audience would be excited to see,” Johar says admitting that Baahubali and the films made by Sanjay Leela Bhansali have opened his head to the latter.

“Otherwise, there’s enough to watch at home on television and the digital platforms and this is only going to get enhanced,” Johar explains. “Right now, there is an evolution, in five years, there will be a revolution. Cinema may or may not be the first choice for the avid cine-goers that used to exist. How do you entice them?”

The industry appears comfortable with his bets. “I think Dharma is the first company in this country that has proactively changed the dynamics of crafting those big-screen experiences one after the other,” opines film distributor and exhibitor Akshaye Rathi. “In the next two years I think Dharma will definitely be one of the biggest contributors to the theatrical revenues of Indian entertainment.”

The strategies

Apart from being larger-than-life visual spectacles designed for theatrical viewing, Johar’s films are also sought by digital platforms. A multiple-film deal with Amazon Prime Video reportedly works this way: for a standard Dharma film, the over-the-top (OTT) service guarantees about ₹ 15-18 crore. Additionally, every ₹ 10 crore the film makes thereafter at theatres adds another crore to Dharma’s digital earnings. Morever, ₹ 40 crore could come for the satellite rights in case it’s a Johar directed film—and around ₹ 30 crore for a Dharma production.

Utpal Acharya, founder of film company Indian Film Studios, pointed out that by the time these films are ready for release, the merger of The Walt Disney Co. and 21st Century Fox would be complete, giving Dharma advantage of the combined entity’s presence in the south Asian film market.

“Karan Johar is no fool to make decisions that would shut the company, the calculations must have been done keeping in mind even the worst scenario if a film underperforms,” said Atul Mohan, editor of trade magazine Complete Cinema.

Johar says he’s a balance of art and commerce and doesn’t want to back anything that he knows won’t make money. “It’s very simple, there’s a chit you make where you put together your expected recoveries from satellite, digital, music, overseas and the average business the film is likely to do in India, even in the worst case scenario. When I see that figure and the budget corresponds to that, I’m okay,” Johar explained. “On the bigger films however, there’s a leap of faith you take. Fortunately for us as a company, any studio we’ve collaborated with has never lost money. Even when they’ve lost money in a film, I make it up to them in another.”

Defining Dharma

Despite his reluctance to claim business acumen, Johar’s has been a journey with clear strategies. The Dharma stable is sustained by a couple of tropes, most importantly nurturing new talent, which could belong either to film families (and ignite the infamous nepotism debate) or be Johar’s own discoveries. In the last 14 years, the company has introduced 12 directors, most often his assistants, and five actors.

Johar’s films, whether produced or directed by him, are an unabashed display of all things beautiful, though the filmmaker insists it’s just an aesthetic inherent to the company, and not an imposed mandate. “He’s very consistent with his (marketing) approach of selling dreams, fashion and international locations and creating a larger-than-life reference point for people to follow,” Saurabh Uboweja international brand expert and CEO at management consulting firm Brands of Desire.

Finally, of course there are Johar’s people’s skills. Known to be on speed dial with every name to reckon with in the industry, experts say a lot of Dharma’s marketing mileage, especially on social media, stems from Johar’s personal relationships and his ability to be on multiple platforms and leverage all of them equally well.

That translates into a herculean task in a self-obsessed industry where everyone, in Johar’s words “is on their own trip”. “Actors and filmmakers are extremely vulnerable and insecure and as somebody who leads a company, you have to know that,” he says.

“Sometimes you have to make a sixth call to a person who doesn’t take your call five times. My thing is work needs to get done. No matter what it takes, do the job. The only way to survive in this business and be an active producer is to drop your ego and hold on to your self-respect.”

Regrets and the future

There have been box office failures, of course, over the years. Among which, titles like Gori Tere Pyar Mein (2013), Shaandaar (2015) and Baar Baar Dekho (2016) stand out. But Johar remains clear on instinct.

“Many times, I’ve seen the final cut of a film and said this is going to be a disaster. I never lie to the director, if I don’t like the film I’ve seen, how can anyone else like it? Barring Kurbaan and Brothers which were the two films I really liked and I feel they didn’t reach their optimum, but I could be completely wrong. All the other failures I’ve known of,” he said. “I love if it’s either a clean disaster or a big hit. I hate the in-between ones that neither go here nor there.”

And what does he do if he knows there’s a disaster on the cards?

“Of course you go ahead with the release, you can’t leave the film in the cans, you’ve got investments, you need to recover them,” he said.

“I can’t afford to not release a film, I haven’t reached that stage yet. And I feel digital cannot be a dumping yard. If you’ve chosen to make a film that is not going to work, release it, take the backlash, move on,” he added.

Media analysts and trade experts say like every production company worth its salt in India, Dharma is now looking at producing both episodic and feature film format content for OTT streaming platforms like Amazon and Netflix, whose budgets will be in the same territory as mainstream movies. There will also be other digital forays, like interviews and short videos regularly supplied on social media.

“We’re planning to (go digital) next year,” Johar said declining to divulge more details. “It’s going to be a solid digital company—we want to be content providers and creators. We have everything in place already and we’re good to go in a few months.” Even for a biggie like Dharma, this transition will be crucial.