Manmohan Shetty: an astounding number of films have lost money due to Piracy

Kolkata, Sept 26, 2010 (Calcutta Tube/IBNS): The multiplex boom that ushered a new era in the country’s entertainment industry over the past ten years is a big cause behind the rapid spread of piracy, said noted Bollywood producer Manmohan Shetty here on Friday.

Speaking at the India Entertainment Conclave, organised by the Indian Chamber of Commerce (ICC), where the some of the big guns of the industry gathered to discuss the current state and the roadmap for the Indian entertainment industry, Shetty said films are losing money at an alarming rate.

“You are reading everywhere that the Hindi film industry is touching new heights every year, but don’t go by the numbers. In the last two years, an astounding number of films have lost money,” he said.

According to Shetty, the proliferation of multiplexes to provide high value entertainment to a niche audience consisting of the richer sections of the society, has left no space for growth and sustenance of the single screen theatres, in turn drastically affecting its overall business.

“Multiplexes were built to cater to a select section of the society, but as they spread, they made it virtually impossible for the standalone cinemas to survive. Thus cutting out the majority of the audience that used to go for movies earlier,”

“But people want to see movies. And if you take away the theatres from them, they are going to resort to other methods. So they have fallen back on buying pirated DVDs which have swept in to meet the demand. So in a way, we encouraged piracy.”

In the last calendar year 1,298 movies were censored in the country but baring the cream, the majority of the movies had bombed at the box office, he said.

“Last year, over 50 per cent of the money actually earned by the film industry, came from South India. That’s because they still have standalone cinemas going strong,” Shetty said.

He said that to revitalise the film trade it is imperative that new incentives and capital be injected into making entertainment affordable to the masses and expressed hope for government trade policies that concur with this objective.

Media mogul Pritish Nandy said for entertainment to flourish as an industry, it must be treated at par with any other industry, calling or relaxation in taxes levied like a ‘punishment’ on the film trade.

Taking on government polices, filmmaker Sudhir Mishra said, “Making a film today is an accounting nightmare. 40 percent of a movies budget goes to pay taxes. It is a shocking fact that while 70 percent of the producers lost their shirts, the government made money.”

“Also the despite being star-driven, industry needs to understand the value of scripts. Special capital must be allotted for the development of films,” he said.

ICC president Jayanta Ray said for helping the growth of the industry, apart from bringing an uniformity in the taxation policies, the foreign investment polices should be relaxed, which were currently working against it.

“The ICC recommends raising the FDI (Foreign Direct Investment) ceiling from 26 percent to 49 percent in general entertainment and 49 percent to 74 percent in the DTH (Direct To Home) space and increase in the number of co-production treaties,” he said.

Satyajit Ray Film & Television Institute director Shankar Mohan underlined the need of addressing the problems of the industry in a holistic manner rather than the current segment approach that was being taken.

He said, “Bringing a consensus is highly important to solve the problems which despite being addressed for quite some time, haven’t seen any solutions.”

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