A VC's Analysis of the 2018 Box Office Results

The Indian Television industry is undergoing a massive change. Except for Shark Tank & Suits that are available on Indian TV, the best content is now being displayed on platforms like Netflix, Amazon Prime, Voot etc. These platforms are providing writers, directors, actors, producers, etc. the freedom to create or participate in content that they are inspired by. Recently, many bankable movie stars have done Netflix/Amazon Prime shows; Saif Ali Khan, R Madhavan, Nawazuddin Siddiqui, Radhika Apte, Bhumi Pednekar to name a few. These avenues give talented character artists that are confined to supporting roles in mainstream Bollywood movies the chance to get meaty roles and display their talents in Netflix/Amazon original series. The stellar success of these web series indicate a change in the preferences of the viewing audience and it got me thinking if this applies to the big screen as well.   

This morning I looked up the Bollywood movies that did well at the box office in the year 2018. Although there is a lack of information on the financial performance of Indian movies, a quick search revealed this imdb post to be the best source of aggregated information for the box office performance. Despite the math in this post is off, I found most of the numbers to be believable. I cleaned up the list to remove non-hindimovies and removed Hichki as the numbers didn’t add up (and I didn’t quite believethem). I was unable to find a credible source to cross verify the worldwide collections data, but for now, we’ll rely on this. Below are the top 20 grossers for 2018:

Rank	Name	Domestic	Worldwide	Total	Budget
1	Sanju	340	234	574	100
2	Padmaavat	293	224	517	190
3	Race 3	166	121	287	150
4	Baaghi 2	161	100	261	65
5	Simmba*	151	99	249	75
7	Badhaai Ho	136	90	226	30
6	Thugs of Hindustan	130	96	226	275
8	Stree	128	74	202	20
9	Raazi	121	77	198	30
10	Zero	96	73	169	200
11	Gold	105	60	165	85
12	Sonu Ke Titu Ki Sweety	102	59	161	15
13	Raid	100	59	159	35
14	Veere Di Wedding	80	56	136	20
15	Sui Dhaaga: Made in India	79	50	129	30
16	Padman	75	47	122	30
17	Dhadak	75	47	122	25
18	Satyameva Jayate	78	44	122	50
19	Andhadhun	73	47	120	25
20	Parmanu: The Story of Pokhran	64	37	101	30

This list does not provide an accurate picture as to the profitability of the movies, therefore, I added a column for the movie budget sourced from the same post. Then, I divided the total collections by the budget to come up with the total X’s the movies made. This derived data tells a whole new story.

New Rank	Previous Rank	Name	Domestic	Worldwide	Total	Budget	Returns
1	12	Sonu Ke Titu Ki Sweety	102	59	161	15	10.73
2	8	Stree	128	74	202	20	10.10
3	7	Badhaai Ho	136	90	226	30	7.54
4	14	Veere Di Wedding	80	56	136	20	6.78
5	9	Raazi	121	77	198	30	6.61
6	1	Sanju	340	234	574	100	5.74
7	17	Dhadak	75	47	122	25	4.87
8	19	Andhadhun	73	47	120	25	4.79
9	13	Raid	100	59	159	35	4.55
10	15	Sui Dhaaga: Made in India	79	50	129	30	4.28
11	16	Padman	75	47	122	30	4.06
12	4	Baaghi 2	161	100	261	65	4.02
13	20	Parmanu: The Story of Pokhran	64	37	101	30	3.36
14	5	Simmba*	151	99	249	75	3.32
15	2	Padmaavat	293	224	517	190	2.72
16	18	Satyameva Jayate	78	44	122	50	2.43
17	11	Gold	105	60	165	85	1.94
18	3	Race 3	166	121	287	150	1.91
19	10	Zero	96	73	169	200	0.85
20	6	Thugs of Hindostan	130	96	226	275	0.82

Here are my insights from the second list:

• A big budget does not equate to big success
  • 9 out of top 10 profitable movies had a budget under 50 crores
  • 12 movies with a budget of less than 50 crores returned 5.28x of budget
    • 1797 crores on a 340 crore budget
  • In contrast, the top 5 budgeted movies returned 1.94x of budget
    • 1773 crores on a 915 crore budget

• Female actors’ rule!
  • 4 out of the top 5 profitable movies were based on strong female lead(s) characters

• The end of the Khan rule?
  • They took up 42% of the budget (of the top 20) but contributed only 16% of the revenues
  • Collectively the Khan’s returned 1.09x of budget

• The most profit-making stars for movie producers were:
  • Ayushmann Khurrana
  • Akshay Kumar
  • Vicky Kaushal
  • Ranveer Singh
  • John Abraham

This entire exercise reminded me to continue to pick entrepreneurs/ partners/ employees based on their ability to perform and not the weight of the names on their resumes. Secondly, it reinforced my belief that picking dark horses, keeping low budgets and focussing on quality is the key to investment success – in both movies and venture investing.

6/2019