Box Office Post Rerun: Falling Box Office and the 3 Khans

I think I wrote this after Zero came out? One of those big movies that caused the reaction of “grrrr! The stars make terrible movies and that’s why the box office is falling!”

I have to start with Hollywood history, which is part of the problem. Indian film is now simply aping the American style of film release without the history behind it, or the slow development of genres and infrastructure. And, most of all, without seeming to notice that Hollywood is dying by following this structure.

Anyway, let me begin back before film! In America before the movies, Vaudeville was king. A series of 5-15 minute live acts, you could pay the equivalent of 5 dollars a ticket and get 2-3 hours of entertainment. That’s what the audience experienced, but there was a whole infrastructure behind the scenes to keep it going. There were theater “circuits”, theater franchises essentially that went all up and down America, connected by the trains. Performers would have a contract with a particular circuit, they would come into town and do their act every night for a week or a month or whatever, and then be handed a ticket and moved on to the next town. It kept the audience fresh, seeing something a little different every few weeks. And it was good for the performers as well, they could do their same act for literally decades without needing more than a few minor changes because they were always moving on to new audiences.

When movies started to come in, that’s how they were sent out as well. Each studio had a theater circuit that they owned directly. They would release a film in some of their theaters simultaneously, then shift it to others, and keep shifting around like that so the audience always had something new to watch and they could have the same movie playing for years, just by sending it around to new towns that hadn’t seen it yet.

There was another part of the vaudeville circuit that came into play eventually. The circuit always had the A towns and the B towns, and when your act got stale or you got old, you would be moved from an A town to a B town. In Vaudeville, this could take years. With the films, it took several months. A high class movie would start out moving through the A circuit, the major cities. Then it would be moved down to the B circuit, the smaller cities. And finally the little theaters, the second run cheap theaters, and so on. By shifting the places where it played, the same film could run for years and years and years and keep making a profit for the studios.

And then television came in. Television did the same thing to movies that movies had done to vaudeville. The whole system relied on being able to change the audience, not the act. Once some vaudeville performers started recording their act (as bit parts in movies), suddenly millions of audience members were “spoiled” all at once and no longer felt the need to buy a ticket for the live show. And now television was talking those same aging vaudeville performers, some old movies to play late at night, and movie stars who were willing to headline shows or at least show up to do a song or a skit, and giving the audience all of this for free, “spoiling” them for a movie.

(Ed Sullivan!!!! Saving grace for aging vaudeville performers, and also Elvis)

And then there was the anti-trust case. Paramount vs. the United States, the decision came down in 1947 right at the same time that TV first began to make in roads. The American supreme court declared that the movie studios owning their own theater circuits was a violation of trust laws. The people making the product (movies) could not also be retailing the product through their theaters. Movie makers and movie sellers had to be two different things.

Suddenly the structure that had supported the film industry for years was crumbling. Without the theaters to provide this nice tidy pattern of slow releases shifting from town to town and finding new audiences, and with TV eating away at the audience interest in seeing a film in theaters, Hollywood began to die. The major studios were sold off bit by bit, most famously RKO studio became Desilu, a TV studio. And the theaters began to die, in a major city like Chicago (I did a paper on this in college), they disappeared at the rate of about 30% per year.

Studios reacted by thinking the solution was to make Big movies, Expensive movies. Because it seemed to work, something like Sound of Music was a solid profit maker and got people back into theaters. But the problem was, it wasn’t sustainable. People would watch it, but only that movie, it wasn’t bringing them back consistently.

What was needed was a change in the whole way of thinking about film releases. The theaters were dead or dying, you couldn’t rely on them to let you change your audience around every few weeks and keep a film playing. You had to focus on reaching the maximum audience simultaneously, spread things out over space rather than time.

Enter Jaws. This is why Spielberg is Spielberg today, because he spotted how to turn the industry upside down and right side up again. Jaws was a great movie, original and entertaining and tautly suspenseful. But it was also the first true Wide Release in America, with everything that comes with it.

Image result for jaws wide release
Thank you anonymous internet person for sharing your slide summarizing this!

The Wide Release is focused on getting the maximum audience reach in the very first weekend. Instead of relying on word of mouth and just plain habit to drive the audience into theaters, it includes a massive ad campaign, in the ramp up to the release followed by blanketing the country with screens, every theater every where playing the same film at the same time, every audience member everywhere going in to see it.

And it worked! And it lead to a change in how all movies were released. It was no longer a layer cake approach, first this circuit and then that one until you work down and have eaten the whole cake. Now it was a sheet cake, one big country all one big layer eaten at once. And of course, a sheet cake is generally a lot easier to make and a lot less tasty than a layer cake. It’s just bigger.

This isn’t to say that Hollywood was saved. It wasn’t. Despite a few blips here and there, generally speaking theaters have been dying in America since the 1950s. I’ve been in Chicago for ten years and seeing movies that whole time. 50% of the theaters that were here ten years ago are now gone. And only 2 new ones have been built (including the All-Indian theater). Of those remaining, more and more are turning over to the luxury seat experience, which is really saying “we can only sell half as many tickets so we don’t mind taking out half our seats”. Wide Releases are just keeping the industry afloat, giving the audience a reason to get to theaters. But it is harder and harder every year to get them there, the marketing campaigns have to be bigger and bigger and more and more expensive in order to get any kind of a response.

Now, let us turn our eyes to India!!!!! India did not have a vaudeville circuit that was structured and national the way America did. There was nothing for film to imitate, it started fresh. In India, there grew up three separate entities, the producers, the theaters, and the distributors. The producers put all their money into a film and struggled to get it made. The distributors bought the distribution rights for a film for a particular territory from the producers. And the theater owners rented the film from the distributors and paid them a percentage of the ticket sales. If a producer couldn’t get a distributor to buy, they lost everything. If a theater owner couldn’t get people to buy tickets, they lost everything. A distributor was usually okay, they paid the price they wanted for the film to begin with, and they had enough films that they could spread out the risk.

Image result for india film territories

Another anonymous internet person, thank you!

Back in Olden Times when films were made on actual film stock, there were government limitations on how many films you could release and there were financial limitations on how many copies you could afford. Distributors generally handled their territory the same way Hollywood did. One or two copies of the film released in a major city. Once that audience was exhausted, those same copies would move down to a smaller city, and then smaller, and then start traveling the villages and so on. With India, it was even easier, the country was so separated and isolated from each other, the same movie could play for decades and always find a new audience just by moving to a new place. The successful film was one that had universal appeal and entertainment and could keep running and running indefinitely.

If you look at interviews in the 90s, there was a lot of talk about the desire for a wide release, about wanting that major influx of profit that a wide release brings. That was coming from the producers. They were the ones always getting the short end of the stick under the old system, the filmmakers in general were making far less money than anyone else (director, producer, singer, all of them were just not seeing the kind of profits that distributors could). This is why there were few established studios, why even the most successful producers tended to make just one film every few years. They had to scrimp and save and struggle in order to finish the film and then hope they could get a modest profit from selling the distribution rights. And meanwhile the distributors and theater owners were getting rich. Wide release could change that, could put the power back with the producers, if they could offer a product of such value, guaranteed value, that they could get a high price for it. And they could look to America to see that, to see how movies were making this enormous immediate profit. It was tempting for the Indian producers because they were already only thinking film to film, they just wanted that one big profit and then to get out. Unlike the theater owners and distributors who would benefit more from a slow steady stream of a variety of movies.

Hindi Film 101: Why the Falling Box Office Isn't the Fault of the ...
Now, why exactly did the state government allow multiplexes to charge less tax per ticket than single screens? meaning that the upper income folks who can afford multiplex tickets are paying less in taxes than the struggling single screen customers?

And then there were the multiplexes. The Indian government is in love with multiplexes. They get tax breaks, they get encouragement to build, they get all kinds of things that made it easy for them to break ground and appear almost over night. And then the ticket prices go up and up and up and the single screens die. Multiplexes were (originally) unrelated to the idea of wide releases but they certainly helped it along once the first major films started coming out. The thing with multiplexes is that they have multiple screens. In a single screen, you have the same audience week by week and you change the film. So a movie can run for a long time by hoping single screen to single screen. And a single screen owner will think long and hard about what they put on their single screen. But in a multiplex, you will put the big new release of the week (whatever it is) on half your screens, and leave the others for last week’s film. You always have space for the new release.

And finally there was the Hindi producer’s strike of 2009. Producers were frustrated with the deals worked out with multiplexes, they were not getting profit share from them, they were not getting cooperation, they were not getting prompt payment. They wanted a straight 50:50 profit share on their films instead of begging for whatever the multiplexes chose to give them. Single screens were still open, single screens were running fine, but single screens didn’t cover nearly as much territory as they used to thanks to multiplexes driving them out.

Multiplexes argued that the problem was the films, they just weren’t good any more. Make better movies, and they would pay more money and pay on time. This is always the argument, “just make better movies”. A deal was finally reached, and it wasn’t a good deal. The new agreement said that producers would get their higher profit share but ONLY OPENING WEEKEND. The longer a film ran, the less money they made per ticket. If a producer wants a profit, the focus has to be on opening weekend.

Now, think about the past 10 years of Hindi film since 2009. Doesn’t it make a lot more sense once you know that theaters will only pay out for opening weekend takes? Producers have no incentive to care about if a film is good or not, if it can stand up to word of mouth or not, they just need something they can sell for the opening weekend profit. Wide Release has come to India, massive publicity campaign, massive simultaneous release every where in the country, but not because it of all the complicated anti-trust agreements and industrial shifts and so on that brought it in America. No, it came because the multiplex owners forced it on us, because it was the only way for producers to make a profit.

Image result for aamir shahrukh
you wanna blame the Khans? Fine. But the only time Shahrukh and Aamir came together was for a lengthy press conference explaining the reasons behind this strike and why the industry really did not want to make a deal with the multiplex owners. They tried as hard as they could to avoid this ridiculous multiplex-audience focus and opening weekend focus.

There are other factors of course. Piracy for one, and the internet for another, and satellite for a third. With movies streaming or playing on satellite within a few weeks of release, they can’t run for a long time because after that first week or so it is easy to think “why bother going to the theater, I can just catch it streaming”. And with piracy, producers have another incentive for getting as many people in as soon as possible before they can see it online instead.

But (and I know I talk about this a lot but it bears repeating), satellite and internet do not cover all of India. If the movie industry was still structured around long running films, around the traveling tent shows and single screens in smaller towns, the audience is there. They don’t have anywhere else to be, power cuts kill the satellite TV and the internet is non-existent. Ultimately it is the profit margin that is killing the films, the quest for the record breaking opening day box office from the multiplexes that can make a producer a rich man in a way the slow steady income for the 50 rupee tickets never could.

Multiplex Industry in India | Movie Theater | Film Industry
You know that “1%” that folks are always nattering on about? Well, in the Indian film industry, it is 0.6% that is controlling the content of the films watched by the 100%. At least in 2004, I am sure it has grown since then but it is certainly still not the vast majority of the Indian audience.

Now, let’s briefly talk about how the Khans fit into this and all the other surface elements. A Khan is part of an ingredient in a big opening weekend, a strong marketing tool. So is 3D, or IMAX release. So is a lot of special effects and so on. So is a holiday release. These are all things that you can market, all things that will impress the audience and make them more willing to spend money to buy tickets, and buy tickets opening day. And these are all things that the audience is tiring of. You see it more with Khan films because, again, a Khan tends to be one of the ingredients in these movies. But it’s not because it is a Khan film, it is because it is a Big Stupid Film. And it is a Big Stupid Film because of decades of complex shifts in the industry and the government and all kinds of things in both America and India, not just 3 men.

This is just one way to think about what is wrong with Hindi film. But I think it is more profitable to think about it in terms of the increasing value that Indian government is putting on the rising middle-class at the expense of the lower classes, the way that corporations (multiplexes are run by powerful corporations, including the Ambanis while single screens are owned by small businessmen) are colluding to squeeze out the small businessman, and the way that producers and stars fought against this change to the point of going on strike, and lost. Not to mention that it is the movie stars that are trying to keep single screens alive, Ajay Devgan and Salman Khan both trying to buy up and keep alive theaters.

Image result for ajay devgan single screen

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