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NEW DELHI : Bollywood is placing risky bets on big-budget movies to draw audiences back to theatres amid continuing uncertainty about the course of the pandemic, rise of video streaming and dwindling number of theatres.

Trade analysts are sceptical whether the industry will be able to recoup the massive investments under the changed circumstances.

According to these analysts, some of the investments may be hard to recover fully amid dwindled screen count, higher revenue share of multiplexes, entertainment tax and also the fact that OTT (over-the-top) streaming platforms have rationalized their film acquisition budgets.

“A lot of these figures are not commercially viable when you consider factors like entertainment tax or the kind of rentals that theatres have to pay," said independent trade analyst Sreedhar Pillai.

A version of the Ramayana is being planned with Hrithik Roshan and Ranbir Kapoor for 750 crore. At least three upcoming films with Baahubali star Prabhas will cost more than 400 crore each, as will Karan Johar’s superhero flick Brahmastra, starring Ranbir Kapoor and Alia Bhatt.

Pillai estimates that to recover budgets of 750 crore, a film would have to gross at least 450-500 crore in cinemas alone, which he believes is almost impossible. After deducting entertainment tax and the share of multiplexes, only about half of it, or 200-250 crore would come back to producers. On the other hand, theatres will continue to demand their weekly shares, especially given the hardship of the past two years. “Right budgets are the key to success," Pillai added.

The highest-grossing Indian film of all time Baahubali 2: The Conclusion, too, garnered just over 500 crore in the domestic market. While additional earnings came from overseas territories, much of those had to be split with distribution partners in those markets.

While actors such as Prabhas are being touted as pan-India stars with their upcoming films being dubbed in multiple languages and shot at lavish scales with visual effects, a film producer pointed out that the actor’s last film Saaho netted around 148 crore after spending 325 crore on production, despite his popularity post Baahubali. “In the near future, you can’t even expect theatricals to contribute more than 30% of overall revenues given how audiences will slowly trickle back to cinemas and the limited screen count," the person said.

Additionally, streaming services have not seen the kind of returns they expected from big-ticket movies and have decided to focus on commissioning web originals, the person said.

On the other hand, film finance consultant Sanjay Bhandari said producers are taking the risk to make big-budget movies because of assurance from distributors that audiences will flock to cinemas worldwide and they can be dubbed in multiple languages. “A lot of these films can look to recover their cost even before release," Bhandari said, referring to satellite TV, digital streaming and theatrical distribution rights that are sold months in advance.

In addition, a lot of the talent, including the lead stars, divide their fee into fixed and variable components, helping the film finish on time.

Independent exhibitor Vishek Chauhan said the common perception now is that cinema is a dying industry, but a lot can change with such films. “There is nothing more enticing than success. If these big films come and do well, it will encourage many people to either enter the business or re-open screens. There is a huge population to address in small towns, and only the bigger films can bring these markets on board," Chauhan said, referring to Hollywood films such as Avengers and Spider-Man franchises as the gold standard that have raised audience expectations.

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