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NEW DELHI: After more than a decade-long presence in the Indian film market, Hollywood studios like Disney, Sony and Viacom18 are tweaking their strategies by either scaling back operations or focusing on regional and digital content rather than big budget Hindi films.

Walt Disney may be slowing down film production in the country through its acquired arm Fox Star Studios (Disney acquired 21st Century Fox Inc. 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 quit in the past few months. In fact, Disney’s earlier stint at filmmaking in India via its UTV acquisition, too, fell short of expectations after flops such as Mohenjo Daro and Jagga Jasoos.

Hollywood studios, media industry experts said, are getting increasingly disenchanted with Bollywood’s business model where their local co-producers do not part with IPs (intellectual property rights) for foreign players to monetize and lead stars take away 60-70% of production budgets. Besides, big budget films are no longer fetching big returns.

Trade expert said apart from Fox Star, even studios like Viacom18 and Sony are turning conservative, focusing on small budget films and more regional language narratives besides digital content. The shift to digital content is inspired by video platforms like Netflix and Amazon owning IPs to all their original shows and calling the shots instead of the producers they commission the projects to.

“With UTV, Disney realized it was a problem of overvaluation after a series of films underperformed. With Fox Star though, they were notching up hits like Housefull 4 etc 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 fact that local producers were unwilling to part with IPs while the leading cast was commanding as much as Rs. 100-150 crore for films with a total budget of Rs. 200 crore.

Indian producers and actors may function like this, the person said, but 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.

In an official response to Mint’s queries, Disney denied it was scaling back film business. “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 Company, it has become even stronger," it said adding that the company has released three movies from the Fox Star Studios portfolio directly to its digital platform, with Laxmii slated next. “In the past six months, we have seen disruption in the movie production and distribution landscape, which has led to changes in release schedules. Further more, 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 added.

Media industry experts say often the global lens of Hollywood studios does not adapt well to India. Pradeep Dwivedi, CEO-India at Eros International Media Ltd said it has definitely been a learning curve for Hollywood corporates that entered with much enthusiasm but have seen the downside of understanding the cultural nuances and creative quotient of a country like India which, however, remains an attractive economic proposition.

“The studio business is tough and complex and requires discipline," said Ajit Andhare, chief operating officer, Viacom18 Studios. IP sharing remains a challenge, Andhare admitted, but one that needs to be resolved with collaboration and openness with producer partners rather than being seen as an ego battle. “We don’t want to look at India only from the lens of Bollywood but address all pockets, be it Hindi, Hollywood or regional cinema," Andhare added, explaining the studio’s foray into languages such as Tamil and Telugu.

To be sure, studios, across the board, have realised the importance of investing in digital content and streaming platforms. While Disney has announced global intention to reorganize its media and entertainment businesses to “focus on developing and producing original content for the company’s streaming services," Viacom18 has its own digital content brand Tipping Point. Sony Pictures Networks, too is bullish on its VoD service, SonyLIV. The company did not respond to queries on its film studio business here and the last film it made was Shakuntala Devi that was released on a streaming platform.

Producer Anand Pandit said streaming platforms will become more important post this pandemic and content will be driven by what appeals to demographic diversity.

“Studios usually tend to go big on tent-pole films and that could be a strategic error because success with those is rare. The trend now is of medium-budget, niche subjects and better talent discovery that helps spread risk and manage the portfolio better," said Siddharth Anand Kumar, vice-president, films and television, Saregama India, adding that OTTs like Netflix and Amazon Prime Video have already shown the way with vernacular content that appeals to the youth and is driving viewership across audience segments.

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