“A film never fails... a budget does.” Karan Johar breaks down the maths that goes behind delivering a box office hit.
🎥: Masters' Union
🎥: Masters' Union
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00:00I don't think any of our new generation movie stars can have the aura and magic of Shah Rukh Khan, Salman Khan, Aamir Khan.
00:07I pay as a consumer 100 rupees for a ticket. How is that 100 rupees divided?
00:11Unfortunately, a pie of that is with the movie star.
00:14Yash Chopra once told me, a film never fails, a budget does.
00:22If you want to be safe on a film, then your cost, your recovery from digital rights,
00:27satellite rights, music rights, and perceived theatrical, like average theatrical, what it can
00:33be in the worst average case scenario, should kind of equal your cost of production plus publicity.
00:40Suppose my film is, and I'll explain to everybody watching this,
00:45suppose now my cost of my production is 80 crores, rather 75.
00:50Including the actor fees?
00:52Including, that's ATL, that's above the line.
00:54And then we have 15 for P&A, which is, so it's 90.
00:57Now, if I'm getting 40 from digital, and I'm getting 20 from satellite, and I'm getting 15 from music,
01:06then I am, I'm like already at 75, my cost is 90.
01:10So I'm presuming my film will do about 40 crores.
01:13If I do 40, then for 55% of that comes home, theatrically.
01:18Okay, if I do 40, so then I'm like, okay, I can make this movie.
01:21But this is your intelligent mind, you know, doing this calculation.
01:25But if you have to take a chance, you have to take a chance.
01:27Then you have to say like, okay, now my film needs to,
01:29my breakeven point of my film is 80 crores, NBOC, net box office, 70.
01:34Then that's the time you're taking a risk, because in this climate,
01:36you don't know what will work and what won't.
01:38But this simple mathematics, I always do for a filmmaker.
01:40You know, if I pay as a consumer 100 rupees for a ticket,
01:43how is that 100 rupees divided amongst the actors, the directors, the producer, the theater?
01:49Unfortunately, a pie of that is with the movie stars.
01:53Okay.
01:53Which should not be the case, because it's not that every movie star
01:56can open a film at every given point of time.
01:59But you're paying them top dollar.
02:01So I think I would say if it's a big director,
02:03then the divide is literally 50 to the star.
02:07And then if your director is big, then maybe 30 to the director.
02:11And the rest of the technical teams, little more to the right now.
02:14And that's also a new thing.
02:16And the producer is the lowest hanging fruit,
02:17will be like the last person to make the money.
02:19Can you share some of the lows that people might not have heard about?
02:22So sometimes there are movies that do really well in terms of perception,
02:27but they haven't done well economically for you.
02:30But I'll tell you what it happened.
02:31So when I was making Student of the Year, the film did really well.
02:34It did 70 plus crores.
02:36For newcomers, it was the number one newcomer film,
02:38which had done 70 crores and had done really well overseas.
02:42And it had done.
02:43But I had spent like crazy on that film.
02:45So we were down on that film by 15 to 20 crores
02:48because I had spent so much on the film.
02:50We had signed them on a contract, three film contract, which they subsidized.
02:53So I said it'll come around.
02:54So then we immediately made Haseeto Pasi with Sid.
02:57We made two states, Badrinath ki Dulhania, Hampty Sharma with Alia.
03:00We made Badri and Hampty with Varun.
03:02And they were at subsidized numbers because that was as our contract.
03:06So eventually that shortfall actually got covered.
03:09I don't think any of our new generation movie stars
03:13can have the aura and magic of Shahrukh Khan, Salman Khan, Aamir Khan,
03:16Mr. Bachchan, Akshay Kumar, Ajay Devgn, like the Ritik Roshan,
03:20these kind of stars.
03:21I think they were the last of the Mohican.
03:24Today's stars would be relevant, famous.
03:26They'll be celebrities.
03:26See, fame and superstardom are two totally different things.
03:29Famous even anybody can be.
03:32Like you can become like start a YouTube channel and you can become famous.
03:35You can be an influence on Instagram and become famous.
03:38But are you a superstar?
03:40That where like people stood in lines just because of you.
03:44So that ain't happening anymore.
03:46Can a movie be a flop but still make money?
03:48Or can a movie be a hit and still not make money?
03:50A film could be a flop and make money because you manage to keep your costs in control.
03:55Like I gave you that math.
03:57Suppose I made my film really tight and my recoveries are high.
04:00Suppose I made my film in 40 crores with P&As at 50 because it's a smaller film.
04:05But my theatrical, as I said, my digital and my satellite rights are 60.
04:11Got it.
04:12You know.
04:13So even if it's bombs, I've already made my money.
04:15Even before it hits the cinema?
04:16A lot of times that has known to happen.
04:18That has known to happen.
04:19And you could make a massive movie and it could do a massive number.
04:23But you spend so much money that you haven't been able to cover your costs.
04:27And you could have lost.
04:27Like I told you I was student of Diya.
04:29Right.
04:29Like I made a hit film and lost money.
04:31So cost optimization is more important perhaps sometimes.
04:33Yash Chopra once told me a film never fails, a budget does.