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
|6||Thugs of Hindustan||130||96||226||275|
|12||Sonu Ke Titu Ki Sweety||102||59||161||15|
|14||Veere Di Wedding||80||56||136||20|
|15||Sui Dhaaga: Made in India||79||50||129||30|
|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|
|4||14||Veere Di Wedding||80||56||136||20||6.78|
|10||15||Sui Dhaaga: Made in India||79||50||129||30||4.28|
|13||20||Parmanu: The Story of Pokhran||64||37||101||30||3.36|
|20||6||Thugs of Hindostan||130||96||226||275||0.82|
Here are my insights from the second
- 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
lessthan 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:
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.