Investors eyeing Bollywood.
Despite big budget films and new deals in Bollywood, investor confidence is decreasing. According to an ET report, the Rs 1000 crore deal between Adar Poonawala and Dharma Productions has shown the financial pressure of the industry throughout the year. Failure of big films at the box-office, increasing fees of stars and decreasing budget of streaming platforms are making investors cautious.
Why are investors starting to think?
Investing in film production houses is no longer that easy. Companies like Excel Entertainment, Sanjay Leela Bhansali Films are in initial stake-sale talks, but investors’ priority now is on stability and repeatable returns. Speaking to ET, Sunil Wadhwa, Co-Founder, Karmik Films, said that the Hindi film industry is still a very volatile business. There are no guarantees in the success of big studios, so investors are focusing on safe and data-driven projects.
Impact of Global Studio
The slight withdrawal of global studios like Disney and Viacom from India is also affecting the mood of investors. This shows that the film industry in India still needs the trust and awareness of global investors. People associated with the industry believe that there is a need for consolidation in the industry so that mid-sized companies can reach scale and attract capital.
Investors are comparing with other sectors
According to industry experts, now sensible investors are comparing options with better returns in startups or other sectors. Despite the glamor and brand value, the risks of film production are high and profits look uncertain.
Increasing attention towards South films
Due to these challenges, Hindi film producers are now focusing on South films. Here there are options for actors in four languages, fees are controlled and risks are less. Additionally, cinema infrastructure outside the metro and limited tax incentives have also discouraged investment.
Now what next?
This is a clear signal to the industry that despite big budgets and high star projects, investors are interested in stable and data-driven business models. Experts believe that Bollywood should present IP value in a better way and increase policy support for copyright protection to attract investors. This new round of investment in Bollywood shows that glamor and brand value alone are not enough to win investor confidence. The industry will have to move towards more transparency, sustainability and profitable models.