BackHollywood studios’ India plans unravel
Hollywood studios are becoming disenchanted with Bollywood’s business model
PremiumStoried Hollywood studios such as Disney, Sony and Viacom18 are scaling back Indian operations and focusing on regional and digital content rather than big-budget Hindi films, beaten back by Bollywood practices after more than a decade in the market.
Walt Disney may be slowing down film production in India through its acquired arm Fox Star Studios. Disney acquired 21st Century Fox Inc. in a $71 billion cash and stock deal in June 2018, which made Star India, Fox Star Studios, and Hotstar part of Walt Disney.
Top Fox Star executives including CEO Vijay Singh, chief acquisition officer Amar Butala and chief marketing officer Shikha Kapur have all quit in the past few months.
Hollywood studios, said industry experts, are becoming increasingly disenchanted with Bollywood’s business model where local co-producers refuse to part with intellectual property (IP) rights for foreign players and lead actors take away 60-70% of production budgets.
Viacom18 and Sony, too, are turning conservative, focusing on small budget films and more regional language and digital content. They point to the success of streaming platforms like Netflix and Amazon, which own the IPs for all their original shows, instead of allowing local producers to call the shots. “With Fox Star, Disney were notching up hits like Housefull 4, as recently as last year but realized they couldn’t build franchises across businesses the way they do in Hollywood," a former executive of the company said on condition of anonymity, referring to the problem with IPs. In addition, leading stars could command as much as ₹100-150 crore for films that had a budget of ₹200 crore.
“It doesn’t make sense for a risk-averse, disciplined company like Disney which would rather focus on distributing its Hollywood films that are seeing greater traction, cases in point being recent blockbusters like the Avengers franchise and The Jungle Book," this person said.
In an official response to Mint’s queries, Disney denied it was scaling back operations. “Fox Star Studios is one of the country’s largest film studios with production and distribution business for local and Hollywood movies. Our studio business is a significant asset for Star India and after the merger with the Walt Disney Co., it has become even stronger," it said.
The company has released three movies from the Fox Star Studios portfolio directly to its digital platform, with Laxmii slated next, it added. “In the past six months, we have seen disruption in the movie production and distribution landscape. Furthermore, the team is focused on making the three-part movie Brahmastra. We remain excited about the prospects of our studios business under Bikram Duggal’s leadership," it said.
Media industry experts said the global lens of Hollywood studios does not adapt well to India. Pradeep Dwivedi, CEO-India at Eros International Media Ltd, said Hollywood corporates that entered with enthusiasm have seen the downside of doing business in India, which, nevertheless, remains an attractive market.
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