New Delhi: The entry of foreign studios and availability of multiple financing options have built up unrealistic expectations, especially with regard to actors' salaries, whistleblower WikiLeaks said in a leaked cable recently made public.
The February, 2010 cable with the subject 'can the Indian film industry go global?' is a detailed trade analysis of the risks and scope of the world’s largest film industry and explores the changing dynamics of the Indian film industry and its global ambitions.
"The Indian film industry - centered around the Hindi-language industry in Mumbai, known as "Bollywood" - is the world's largest. Nevertheless, with modest revenues and low profitability, the industry's impact is more cultural than economic," the document says.
The entry of foreign studios and availability of multiple financing options have built up unrealistic expectations.
Siddharth Roy Kapur, the CEO of UTV Motion Pictures, who is quoted in the cable, blamed excessive competition and multiple avenues and sources of financing for much of the industry's problem because there is too much money and too many people chasing limited amount of talent.
"Following the Hollywood model, many film and entertainment companies are moving away from an actor/star-based system to a system more reliant on the production company's brand, and its stable of producers and directors," Kapur said. In doing so, studios can lessen their dependence on actors -- who often command fees for as much as 50 per cent of the film's budget compared to 10-15 per cent in the US -- and increase their chances of profitability for each film.
Akshaye Widhani, Vice President of Yash Raj Films, was quoted as saying that there is currently a "price bubble" in the film industry. Widhani believed that costs have to decrease by 40 per cent for the film business to sustain itself in the long term. However, actors’ expectations will become more realistic only after one of the major production studios fails or declares bankruptcy, he said.