After the electoral victory of the Bharatiya Janata Party (BJP) in the Uttar Pradesh (UP) Assembly elections and the return of Yogi Adityanath as the Chief Minister of UP, speculations of Bollywood shifting to UP have warmed up once again. Yogi Adityanath announced the creation of Filmcity in Greater NOIDA in September 2020. In August 2021, a detailed project report made by an international property consulting firm was presented that proposed a Rs 10,000 crore investment in creating the largest film city in the country. With the BJP winning elections, the work to make this new film city will pick pace. Recently the State Government has made several changes in its document to draw bids to build its Film City in Greater Noida. This has set the cat in the cage of pigeons and we have read reactions and criticism about the Government of UP’s idea to attract Bollywood to the State by creating an alternative to Mumbai.
Indian film industry started in 1897 in Calcutta (now called Kolkata). Then we saw the rise of Lahore as the second flourishing centre in Undivided India. Later, with the rise of Bombay (now called Mumbai), and the opportunities it offered to artists who migrated from Pakistan after partition and others from all over India, we saw Mumbai becoming the capital of the Indian film industry in Independent India. This is how we saw the rise and growth of the Hindi film industry in India. Today, the Hindi film industry is the largest film industry in India with the highest number of films released and the largest box office revenues booked. This is the genesis of the growth of Bollywood – the Hindi film industry based out of Mumbai.
Thereafter regional film industries started growing in various centres, with Chennai and Hyderabad leading the race followed by all other centres including major centres in Kochi, Bangalore, and Kolkata being more prominent. Over and above these centres we also have film production in various other small and big centres across all states.
Before discussing the challenges and ideas that Yogi Adityanath needs to implement to attract the film industry in UP, there is a need to take a stock of the status of the film industry infrastructure in Mumbai. The industry will shift to UP (read: Greater NOIDA) only if the Government of UP can offer something more at a lower price point. More importantly, the film industry infrastructure is universal and can be used for films made across India in multiple languages and not limited to films made in Mumbai and in Hindi. Hence the competition is not limited to Mumbai and the market is way beyond Mumbai.
With the BJP winning elections, the work to make this new film city will pick pace. Recently the State Government has made several changes in its document to draw bids to build its Film City in Greater Noida. This has set the cat in the cage of pigeons and we have read reactions and criticism about the Government of UP’s idea to attract Bollywood to the State by creating an alternative to Mumbai
In the film production industry, floors for creating sets are the first and most important infrastructure. Mumbai has around 60 floors for creating film sets to shoot films. Beyond that, Mumbai also hosts around 100 odd bungalows at various locations from Madh Island up to Lonavala, Khandala, and Alibaug for shooting films, serials, and other stuff. Hyderabad is a close second with around an equal number of floors and locations. Chennai ranks third with around 70-80 floors and locations in the city for shooting films and serials. In terms of demand, the segments in filmmaking that require this infrastructure are films, television serials, web series, advertisements and other segments. Television Serials is the largest customer of floors accounting for around 40 per cent of total demand. Films rank second with around 15–20 per cent of total demand followed by web series accounting for around 12–15 per cent of total demand. Balance is distributed amongst advertisement and other segments.
This also highlights the increasing dominance of television serials in generating demand for film production infrastructure in the country. This is followed by a rapid rise in demand from the web series segment, and it is anticipated that with the rise of OTT platforms, in a few years, web series will outstrip the film industry to become the second largest demand generator.
With the rise of the television serials segment, many small studios have propped up across the country. Due to the lockdown, many Hindi, Marathi, and other language serial producers have started operating from small studios set up on NH8 from Virar to Gujarat. Baroda also hosts 2 film production studios that are largely used for shooting mythological serials. Ekta Kapoor’s Balaji Films was the first player to start working in Gujarat and later many others followed.
DLF had set up a 40-acre film studio in NOIDA. However, it failed to take off due to the lack of interest of filmmakers due to various reasons, which will be discussed later in this article. Later DLF managed to convince news channels to set up their studios in NOIDA within its campus.
Film studios and floors are not the only infrastructure required for making films and television serials. Along with film studios and floors, Mumbai also hosts around 100-150 sound / audio studios, largely concentrated around Dadar and adjacent areas, and online and offline editing studios are largely located in Juhu – Andheri to Goregaon areas. During the lockdown, many audio studios have shifted from Mumbai to Pune and other places including Bangalore. Online editing business calls for a huge investment. Fully fledged setups can cost around Rs 15 crores and more. Against that offline editing business can be done from remote locations or onsite with an Apple iMac laptop and required software. Sound / Audio studios would cost anywhere from Rs. 60-70 lakhs and would require facilities within the film city. Necessary facilities and infrastructure must be made for the same.
For a thriving film industry in a particular city, that city will require various integrated post-production infrastructures along with production infrastructure like studios. This makes the availability of trained and skilled manpower available at a competitive cost the first precondition for creating a film industry in a particular location. A successful example of the same is Ramoji Film City in Hyderabad. Ramoji Film City has everything from readymade production studios (sets) to floors (for specific sets) to post-production facilities with an experienced team. This helps a producer and director to make a film in Ramoji Film City very easily. Ramoji Film City also offers film production crew at extremely competitive rates, helping film production within budget. In-house post-production facilities ensure, filmmakers enter the film city with its key star cast and leave the venue with a hard drive containing the fully edited film. Greater NOIDA FilmCity will have to adopt a similar model.
Along with films, the proposed FilmCity in Greater NOIDA will have to provide specific areas to television serial makers for permanent sets for their serials. Mumbai and other locations face the challenge of corrosion of sets due to humid weather. Hence a set in Greater NOIDA will last longer due to a lower risk of corrosion. This will also reduce the cost of maintenance and the creation of new sets at periodical intervals.
It is extremely important to note that the studio business is an extremely low-margin business with less than 10 per cent profit margins. This could possibly become a deterrent for many investors. Hence, it is advisable that the Government of UP doesn’t engage in a real estate game, and allots land to private players at zero cost against a stake in the company that would own the studio. Here bidding can be done on a percentage stake offered by the private player and the amount proposed to be invested, instead of the valuation of land or a fixed rental business. To enhance the profitability of the venture Government needs to support some innovative initiatives undertaken by studio owners.
Akin to Universal Studios model, the proposed film city can have viewing galleries for visitors to watch a film / serial / web series being shot. The Joint Venture Company owning and operating the film city can charge an entry ticket and generate additional revenue out of the same, which can be shared with the studios. Like Ramoji Film City, shows can be organised wherein visitors can watch how famous scenes from various Hollywood, Bollywood and other regional language movies were shot. This along with a tour of the film city to see all sets and facilities can become a revenue stream for Greater NOIDA FilmCity.
This will also create trickledown opportunities like foodcourts, gaming zones, entertainment zones, etc wherein visitors can spend time and money. The proposed FilmCity will have to regularly organize various shows with leading film and television stars and tickets for the same will generate additional revenues. FilmCity venue can also be used for hosting various big-ticket events of various local and international artists like Yanni, Coldplay, etc. The management of film city must actively engage with event organizers and managers to offer the venue for such mega-events.
It is pertinent to note that ND Studio’s Jodha Akbar Set is used for more than 100 weddings. The film city along with some iconic sets and some open space wherein customized sets can be built can be rented out to wedding organizers and corporate for corporate events. This will generate an additional stream of income for the film city. The objective of this plan must be that Greater NOIDA FilmCity must become a tourist venue where local and international travellers and guests can spend a day. Accordingly marketing strategy must be conceived and put in place. Along with this film city will have to build hotels for filmmakers and their core team and star cast to stay during their shooting schedule. This is included in the Detailed Project Report presented by the consultant to the Government of UP. These hotels can also be used for destination weddings also.
The Government of UP will have to go an extra mile in providing some incentives including capital subsidies and other benefits to investors who want to set up studios and other facilities in UP. Beyond that, the Government will have to create schemes to incentivise film makers who shoot a significant portion of the film within the film city and in UP and with local talent and crew
Film City will need a trained workforce and support staff to work as a crew on film sets. Along with this, there is a need for core and ancillary staff in highly specialized activities like post-production. Any film maker will prefer Greater NOIDA filmcity only if it offers best of the talent at a competitive cost. Mumbai has become a very costly destination and Greater NOIDA can become an alternative to Mumbai only if Greater NOIDA can attract talent and make it available to film makers at competitive rates.
The proposed partner bidding for developing the film infrastructure part in the film city needs to be from the film background. This will help the film city in networking with film makers, producers, directors, etc for marketing the venue and locations, and entice them to make films in the proposed film city.
One extremely important limitation in the film making business is the influence of film-makers and even more importantly the financiers in script and locations. They can insist on changing the script to accommodate a particular type of storyline or sets. Hence, the person/(s) bidding for the film city PPP must be insiders and must know all film producers, directors, investors, financiers, etc. This is necessary to influence them in changing the script, wherever required, to make it film city-centric and ensure the film is shot in the film city.
Most of the film financiers in Bollywood are Gujarati, Marwadi, and Sindhi traders from Mumbai and Gujarat, Rajasthan, etc. Along with that many Punjabi financiers from Delhi and Punjab are financing Bollywood films. Now few Shetty and South Indian financiers have decent exposure in Bollywood. Proposed Greater NOIDA FilmCity must engage with them to pull them into the proposed film city and finance films made there. This will call for a complete entrepreneurial talent and not a bureaucratic system in managing and marketing the film city. Along with that FilmCity will also have to go an extra mile by inviting private film financing institutions like banks and financial institutions, domestic and foreign venture capital, debt, and mezz funds, to set up their offices in the FilmCity. This will make film financing easy with locations within the reach and film making within the control of the financiers.
Connectivity infrastructure with NCR and other important locations in UP must be improved with metro and other transport infrastructure to ensure people living in Mumbai and other cities would be ready to shift to NCR and can easily commute to Greater NOIDA for work. Along with that tourists and visitors looking for a day out at FilmCity will find it easy to commute to the FilmCity and enjoy a day there.
The Government of UP will have to go an extra mile in providing some incentives including capital subsidies and other benefits to investors who want to set up studios and other facilities in UP. Beyond that, the Government will have to create schemes to incentivise film makers who shoot a significant portion of the film within the film city and in UP and with local talent and crew. At the same time, Yogi Adityanath and the Government of UP will have to understand that film city is not a real estate game and is an operating asset that offers experiential and tourism opportunities. Accordingly, policies and strategies must be put in place to generate revenues and increase profitability for all stakeholders in the film city, starting with the Government of UP, to investors in studios and films, and other ancillary services.
If Yogi Adityanath is able to look into these aspects then he would be successful in attracting Bollywood to UP.
(The writer is a Chartered Accountant by qualification and a Corporate Finance Professional. He is also the author of “Diagnosing GST for Doctors” published by CNBC Books 18)
Comments