I love it when that happens!  Moviemavengal just sent me a link to an article on the Quint website, written by an industry person, about what is causing the collapse of the corporate studios in India.  And it is exactly what I have been saying ALL ALONG!!!

Go here to read the original article, and then come back to me for discussion.  It’s got graphs!

I have been saying since Fitoor failed that the problem is studios run by corporations.  You need an artistic genius at the helm, someone who can come in to any film set and immediately understand what is happening and how to make it better.  And who is willing to mentor and slowly build up young talent.  This new corporate philosophy, of trying to break the film industry down to formulas and calculations and then throwing money at whatever seems most likely and moving on, that’s just stupid!  Art doesn’t work like that!

Which is basically exactly what this article says (but with graphs!).  Budgets and prices for films have been going up and up.  Independent production houses who sell their films to studios, like Farhan’s Excel, have all been doing very well with these huge payoffs.  And Yash Raj, which is all in house, has been doing great too.  But the big stupid corporate partners have consistently paid through the nose for films that failed.

The only thing I would add to his brilliant analysis, is that the best studio heads are artists, but they are also brought up in the industry.  Business training counts, but not the training you get in an MBA program.  Farhan and Karan and Adi understand how to make a movie that the audience will go for, how to massage artistic egos, how to get a feel for a reasonable budget and a reasonable profit, not because they learned it in school (I don’t think any of them have any kind of business degree, although I could be wrong about that), but because they literally learned it at their father’s knee.  Karan and Adi are both children of producers, raised with business meetings going on in their kitchens and living rooms.  And Farhan, in a way, has an even greater advantage.  He would have been part of the story meetings that went on with his father and his mother and their respective scripts, meaning he got to see the way every producer in town operated, not just one he was related to.  And he had a front row seat to two top notch scriptwriters and their different ways of crafting a film.

(Honey Irani, Farhan Akhtar, Javed Akhtar, and Zoya Akhtar.  29 FilmFare Awards and 7 National Awards between them)

As for Sajid Nadiadwala, who is also mentioned, well, there’s a reason his company is called “Grandson”!  He is looking back to his family’s massive industry connections, but also forward, to the future he is building for his children.  That’s the other part of this, with the deep lifelong connections to the industry, is that it makes them impossible to corrupt.  Or at least, not just with money.  The article sort of danced around saying that corporate heads are getting kickbacks from the production houses when they give them these huge pay outs.  So, Brilliant Creative Type A makes his movie, offers it to Big Stupid Studio for distribution.  The corporate head of Big Stupid Studio, Big Stupid Businessman, offers him a massive over-estimate in price for his film, with the understanding that Brilliant Creative Type will then pay Big Stupid Businessman a nice little kickback out of the huge pay out.  This is just not going to happen with the family studios.

For one thing, you would be paying them a kickback out of their own money.  It’s not like they have a huge corporate well to draw on/creatively embezzle from, it’s all their own money anyway.  A kickback of ten percent of the overpayment does them nothing, if they were the ones making the overpayment to begin with!

For another, these kinds of shady and shoddy business practices only work if you don’t care who you hurt.  Using bribes and kickbacks to get your film on the front burner is one thing when you can go home to your wife and family and friends and never thing about who you may have hurt with what you did at the office that day.  But if your bribes and kickbacks are hurting your wife and family and friends, then it’s not going to be worth it!

It all makes me think about the Eros/Shivaay/Ajay and Dharma feud happening right now.  The article says Eros is in trouble as well, which might explain why they are pushing hard to make Shivaay the biggest profit machine they can make it.  And also why they have no problem stomping all over Dharma and Karan Johar to make it happen.

But compare their practices with how Raees/Sultan was resolved over the summer.  Aditya called up his good friend/brother Shahrukh and said “listen, we took a loss on our last film, which you were also part of by the way, we really need this to be a hit, as a personal favor, can you move your release?”  And Shahrukh said “sure! Of course!”  Not just Shahrukh, remember, it is a co-production with Excel.  So Adi also had to call up his childhood friend Farhan Akhtar and make the same request.  And it all worked out, Yash Raj films is in the pink, Red Chillies and Excel didn’t get a big release yet this year, but they also didn’t take a loss through sharing screens.  And, more importantly, all those relationships that drive the industry and keep people fair and honest and level the playing field, those are all still there too.

Krishna does a great job laying out how all these studios keep hiring MBAs as their heads of production, and sometimes don’t even have a creative head.  But one thing I would be interested in is learning more about the studio that isn’t like the others.  Why is Balaji doing so terribly?

Yes, it has another MBA at the helm of the films division.  But why is that?  Ekta had incredible control over television productions from the beginning, when she was only 19 years old.  She crafted Indian TV by hand, as it were, paying attention to everything from script to costumes.  And saving money in every way possible.  And that’s on top of spending her childhood following her father around to film sets, and listening in on production meetings in their living room.  So, why isn’t she running the film side of things?  Or, failing that, why didn’t she hire someone with her background to do it?  No logical business plan would say “put your 19 year old daughter in charge of your TV studio”, but that turned out to be the most profitable move in the history of Indian TV.  Why not follow through and find another visionary 19 year old to run the film’s division?

Maybe that will happen.  Or maybe Ekta will take up the reins herself.  And that’s why, out of all these failing studios, I have the highest hopes for Balaji.  Because it is the only one that already has an in house genius who has been learning this stuff from childhood.  It just needs to use her.