Last week, Karan Johar sold half of his studio, Dharma Productions, to Adar Poonawalla, the CEO of the Serum Institute of India, known for making vaccines.
This move might seem strange at first, but it highlights how film studios are trying to grow and find new ways to make money, especially since many big studios have not been making enough profit from Hindi films lately.
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Adar Poonawalla invested Rs. 1,000 crore in Dharma Productions. This is his first major investment outside the pharmaceutical industry since 2021 when he bought a stake in a production company.
Film studios need money to produce movies and shows, especially as they aim to succeed in theaters, on streaming platforms, and on television.
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This partnership shows that studios are open to outside investments, particularly from successful entrepreneurs like Poonawalla, who has connections to Bollywood through his wife.
By selling a stake instead of the entire studio, Dharma Productions can still keep control over its creative decisions. The entertainment industry is consolidating globally and in India, with examples like Reliance-Disney and PVR-Inox joining forces.
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Karan Johar has acknowledged that the Hindi film industry is struggling, with less films and poor revenues.
Dharma Productions saw its revenue drop from 1,040 crore in FY23 to 512.2 crore in FY24.
This decline is due to reduced income from film distribution and exhibitions, although they did see some gains in digital revenue.
In contrast, Yash Raj Films had a strong year in FY23, earning over ₹1,500 crore thanks to the success of Pathaan.
However, in FY24, their revenue dropped to around 600 crore, with projections for the year likely to be between 700 crore and 750 crore.
The performance of these studios shows how unpredictable the film industry can be. Last year, four films earned over 500 crore, helping to revive the industry after the pandemic.
But this year has been slow, with only one film reaching that mark so far.
Even during a good year like 2023, ticket prices were higher, but footfalls were actually low when compared to people going to theaters in the last decade.
A report noted that audiences enjoyed escapist films last year, leading many studios to expect an increase in more formulaic, “masala” films.
However, it appears that relying on the same old formulas is not guaranteeing success anymore as seen with the failure of Bade Miyan Chote Miyan.
For studios to improve, they need to attract outside investment and focus on developing new talent for better writing and directing.
Offering a variety of content will help stabilize their operations and lead to more successful films.
