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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-hindi movies and removed Hichki as the numbers didn’t add up (and I didn’t quite believe them). 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:

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 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  

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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.

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 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  

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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

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