Meet Karan Johar, the businessman

Brut India

“A film never fails... a budget does.” Karan Johar breaks down the maths that goes behind delivering a box office hit.  : Masters' Union

Transcript

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.

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