Mumbai: Along with his star status, Aamir Khan is often described as one of the most astute readers of the box office. In an a candid interview with NDTV Profit's show Power of One, on the eve of a release of Peepli Live , his home production, he said that the current trend of Bollywood films being sold for skyrocketing amounts makes no sense. He says that creative talent - including stars - must take responsibility for a film's success: that's the only way to keep the faith with the market.
Here's the transcript of the full interview.
NDTV: Aamir Khan may act in movies called 3 Idiots , but behind all that goofing around, many say that he is one of the most astute readers of the mysteries of the box office - which remains one of the greatest mysteries. How is a film a hit or a flop nobody knows, so at a time when he is about to release his new movie which he is producing, who better to decode this complicated world than Aamir Khan himself! Thanks very much Aamir for joining us. You've cracked this code, haven't you?
Aamir: No, I haven't.
NDTV: Who has?
Aamir: No one has cracked this code. I don't think that any of us can really crack this code of what works at the box office and how, so the best I do is that I just do the work I believe in, and that makes me happy and I hope that it works.
NDTV: But tell me a little bit about Peepli Live - that's the latest thing that you are releasing and we will talk about the numbers part of it later, but just in terms of how the film is being marketed right now - series of very interesting promos - how did you conceptualise that? What was the thinking behind that?
Aamir: Well, in the case of Peepli Live , it's a very raw and real film, the style is humour and satire and that's a very integral part of the fiber of the film and so we thought that the best way to market this film would be to showcase that, and so in all the promos playing with the material of the film, aspects of the film and the strengths of the film, are coming out in that. I believe the characterisation, the way Anusha has written the characters, they are very vibrant characters.
NDTV: Anusha Rizvi, who is the writer and director of the film?
Aamir: ...has written these vibrant characters, and great lines and great moments of humour as well.
NDTV: You've got these little promos, where each promo is very short, it's almost like 10-20 seconds, and each brings out a little character in the movie.
Aamir: Yeah, but promos are usually between 20-30 seconds and that's how our promos are as well. Some are 20, 30, and 45 (seconds long) as well. The idea was to introduce each of the characters to the audience, and we are basing a lot of our promotions on the audience in this case.
NDTV: Also, you have used yourself very cleverly in those promos...in a way, you have mocked your image as a film star.
Aamir: In one of them. Yeah, one of the promos is about how I have gone nuts producing a film like this.
NDTV: Did that actually happen?
Aamir: That's also true on a lot of levels, but it is also the style of the film. The humour of the film is reflected.
NDTV: There is an element of satire there and...
Aamir: In fact, you will be keen to know that, that is something which Anusha shot. While shooting was happening in Badwai, which is a village in Madhya Pradesh where it was being shot, a lot of people used to collect... people started putting up stalls and selling things around the shoot. A kind of a little economy kind grew around the shoot. Anusha noticed one day that in one of the stalls they were selling these Ghajini namkeens and she found that really funny and fascinating when she saw my face looking out from those packets.
NDTV: I didn't even know that Ghajini namkeens existed. Did you?
Aamir: No, I didn't know either. Anyway, some local manufacturer must have done that. So she decided to do a little something around that and she got one of the actors who was playing a media person to do some 'Piece to Camera' (PTC) with that in the background.
NDTV: 'Aamir Khan aayega, ispe picture baanyega' ...something like that?
Aamir: Well, she did various varieties. One of them was about how he said, yeh dekhiye film stars - jo yaha bhi baaz nahi aate, yaha bhi apni publicity me lage hue hain aur ye Aamir Khan apne namkeen bech rahe hain - and all that. So, there were various take-offs on me on it. She was planning to use that in the film, as part of the film.
NDTV: That's an interesting thing. Maybe a lot of other actors would have actually thought twice about spoofing or being satirical about their own image but it is something that you've done in the past as well. You like taking risks, you like pushing the envelope a bit but coming to this actual question of numbers, which is again like I said is this great kind of...
NDTV: Yeah, like Bermuda Triangles, where everyone throws these numbers at you saying that this movie has made so much, it's been a big hit. How does it actually work in terms of how do you actually define a film's profit if you are going to break it down? You have what is called the gross collection, that's the first step. How much it makes in terms of ticket sales?
Aamir: How it works is that first of all you have various ways in which you can actually earn from a film and for now, if we only look at the theatrical earnings of a film, you have the gross collections which is what the film collects without deducting anything so that's called the gross collection, and from that you deduct entertainment tax, which goes to the Government and then you are left with the net collections.
NDTV: Gross minus entertainment tax is net?
Aamir: And net minus exhibitor share, which is what the theatre owners get or the multiplex chains get. When you deduct that, you are left with the distributor's share.
NDTV: So, net minus theatre owner's share is distributor's share?
Aamir: That is correct.
NDTV: And if the distributor has made money, that's the key?
Aamir: That is the key. For the people who've made the film - usually you have the producer, you may have a financier who is financing it - so the producer and the financier put together either sell the film to a distributor, or they distribute it themselves. Either ways the money comes back to the film so to speak, or to the distributor or to the producer and financier who have distributed the film themselves. It's the distributor's share which actually tells them whether they have made money or lost money on the film.
NDTV: Give me an example of one of your own movies to explain... a film that you think has done well.
Aamir: Let's take my last film 3 Idiots for example - 3 Idiots would have cost...I am saying this from memory, the numbers may be off by little bit here and there, but roughly Rs 35 crore, I guess would be the cost of the film.
NDTV: You sold the film for how much?
Aamir: The film was sold, if I am not mistaken, for Rs 50 crore to Reliance.
NDTV: To BIG?
Aamir: To BIG, yes, and then I guess the publicity would have been around Rs 10-15 crore.
NDTV: Okay, so Rs 65 crore.
Aamir: Yeah, roughly Rs 65 crore would be the cost to the distributor, which in this case was BIG. This is - All India... I am talking about India theatrical. The distributor's share for this film is roughly...I could be wrong again by little bit here and there, Rs 110 or 120 crore or somewhere there.
NDTV: Rs 120 crore? That's how much the distributor made?
Aamir: That's what the distributor's share is.
NDTV: This is minus the entertainment tax and minus theatrical earnings?
NDTV: Wow, that's a huge amount because entertainment tax is about 30 per cent.
Aamir: It is different from state to state, but roughly 30 per cent.
NDTV: And another between 20-60 per cent for what the theatres charge?
Aamir: Typically, whatever net business of a film is, the theatre eventually gets 50-60, sometimes 70 per cent, depending on how the film has performed, but it would be 55-60-65 per cent... in that range.
NDTV: So the distributor did really well here? They really made a lot of money?
Aamir: They did well.
NDTV: But you and Raju Hirani also had an arrangement with them where you shared the profits or...?
Aamir: Vinod is the Producer of the film, and Vinod and Raju and I were shareholders in the profits of the film from all the various modes of income. So theatrical is one of them, but to give an idea of the film, now for example, the distributor has bought the film for 50 and has done...
NDTV: (Interrupts) That means you would have done a business for a huge amount? I mean, I am not a math expert but you would...the gross collections...
Aamir: (Interrupts) The gross collections would have been fairly high. So, it would be...
NDTV: (Interrupts) Almost in the range of double that amount?
Aamir: Around 250 would be the net and...
NDTV: (Interrupts) Almost Rs 250 crore net?
Aamir: So, the gross would be 300 or more than that. Then there would be the other - you have satellite, you have overseas, you have music, you have home entertainment - so all of these put together would cross Rs 400 crore, I guess.
NDTV: So Aamir, this is a kind of different strategy that you guys did instead of selling it for a huge amount. Because what's happening these days is that you come across these huge announcements that films are being sold for Rs 100 crore - 80 crore, but they don't end up making that much, so the distributor takes a hit every time. You guys decided we won't sell it for that much but would get a share of the profits once the distributor breaks even?
Aamir: That's right. The idea behind that was that we sell at a price that there is no chance of the distributor losing money, and then if there's an upside then the producers would earn on that upside. So depending on how much the upside is, your earnings would go up or down based on that.
NDTV: That's in a way a more pragmatic way of doing business. It also places faith in the movie. We trust this movie, it's going to do well, rather than you sell it for a huge amount, you take your money and run and the distributor is jacked?
Aamir: I guess that I always feel this is the right way to go about it but...
NDTV: (Interrupts) When we look at the amounts that are being tossed around, for example My Name is Khan was sold for about Rs 100 crore, that was a figure we heard, Kites was sold for another Rs 100 odd crore, Raavan was sold for Rs 80 crore...it didn't look like that kind of money. What's the logic here behind people who are actually buying movies for that amount? Is the industry is learning from these experiences or...
Aamir: You know it's a little awkward for me to comment about other people's films, but let me just say this that I personally believe that for me what has been important all along is that as a creative person and as a person who is a key creative person in a project today, I would like to make sure that the people in the value chain or in the people who are investing in the film on various levels, the investor himself, a distributor or its theatre owners, its sub-distributors - people down the chain should earn money for it to be successful...
NDTV: So, it's a win-win for everyone?
Aamir: (Interrupts) It has to be win-win for everyone. My sense would be, as a creative person I'd like to take that responsibility to make sure that the film is not top heavy and everyone earns. That's a policy I have followed all along. When I do business with someone, whether it's a distributor or whether I am an actor and it's the producer, I am concerned with the fact that whoever I deal with should make money when they deal with me.
NDTV: This is not a comment on Karan Johar or Shah Rukh or Hrithik, this is more actually looking at the people who are buying the movie, the distributors, do you think that there's some rethinking going on there...
Aamir: (Interrupts) I hope so, I feel that in the last few years, there have been number of films that have been bought at very high prices and those prices are actually at a level where for example, Ghajini did distributor share of Rs 60 crore...
NDTV: (Interrupts) So, it made the distributor Rs 60 crore of profit, so it's like a certified hit?
Aamir: But I am saying that until 3 Idiots came around, which did almost double of that, let's say Ghajini was an art stake of a really big successful film and then around that time if you have business deals wherein you actually buy a film as a distributor assuming that the film that you are going to buy is going to do more than what is currently successful, then you are assuming that you know that film's going to do more than the biggest hit ever and I don't know what logic is prevailing when you are making that decision, because I would assume that as a businessman, I am buying a film to distribute, I would like to see the average business of films and I can offer a price which I know I can cover...
NDTV: (Interrupts) Rather than get caught up in this whole thing that I will top the last guy who came along?
Aamir: Rather than actually buying a film for a price that would only economically make sense to me. If the film broke all previous records and did a dream run, then I would end up breaking even...that doesn't make business sense to me.
NDTV: Yeah, that's true.
Aamir: And I believe that the industry is rethinking a lot. In the middle there was this big boom when everyone was very bullish.
NDTV: Money coming in. This was around 2006 onwards when there was a whole lot of it - I just jotted down some rough estimates - Namaste London , Eros bought for Rs 34 crore, Singh is Kingg was topped by Indian Film Company by Rs 65 crore because they wanted to go one better. Then Om Shanti Om - Eros - 75 crore...then came Ghajini ... the figure we have is Rs 90 crore. I know that's true.
Aamir: Somewhere there.
NDTV: Then you come with MNIK , which was Rs 100 crore. So, I think this has become a kind of race.
Aamir: I get very nervous. When Ghajini was sold at a very high price, I got very nervous, because I feel that this race is mad, and I feel because I am basically a very middle class kind of person, and I feel that so much money is at stake and people are going to lose money. I feel very stressed about that. I feel that there is no need to do that. When a film is good the upside will come to you.
NDTV: And I think some of these big producers and distribution houses are little savvy about this. So they are thinking that they will go in for a revenue sharing model like you were saying, rather than doing this outright?
Aamir: There was a time when film companies were trying to outbid each other to get hold of films, but the fact of the matter is that each is financially successful in itself, and that's very important. There is no point of loading a film so heavily. At the end of the day everyone suffers, not only does the distributor suffer when the film doesn't do well, the talent attached to it also suffers because it's a flop on their name.
NDTV: But tell me now about actual promotions...we were talking about how you did it for Peepli Live . You've talked about it before but this is just like a recap. You conceptualised promotions for Ghajini, 3 Idiots , as that only you, like with 3 Idiots getting lost in Benaras and all that.
Aamir: Yeah, it's not just me, it's the entire marketing team which sits and works on this. Whether it was Taare Zameen Par or Jaane Tu...Ghajini,3 Idiots, Peepli Live has a team of people working on marketing, and each film is unique and you need to have the synergy with that.
NDTV: Who came up with the idea of disappearing? Was that you?
Aamir: No that was my idea, which everyone thought I was nuts in the marketing team. Vinod still thinks I am nuts.
NDTV: But it kind of worked?
Aamir: I think it worked because it had a lot of synergy with the film. The film was about these friends who are looking for their lost friend so I thought that what if I disappear and my friends, who are the audience, were to look for me. So it has a synergy with the film. We have a song about that - Behti hawa sa tha vo , and honestly it wasn't just a marketing idea for me. Although it was a marketing idea to start with, but it was also a chance for me to connect with people.
NDTV: So okay, it wasn't just a publicity thing. What about the whole Ghajini going bald stuff? Was that you again?
Aamir: I don't know whose idea it was as a lot of the times we are just brainstorming, but Ghajini was a very physical film. Everything about the film is very physical, so all the marketing ideas were very physical. The press conference was in a gym, I was cutting people's hair all across the country, the multiplex staff had the Ghajini look. I thought it was a brilliant idea, because that's where your target audience is, when you go to a theatre. Well it was a look that got very popular.
NDTV: And then there are also ads. You know it's not entirely strategic but it ensures that you are visible, right? So like right now, because you do only one or two films a year, but you are doing about five advertisements, you're doing Tata Sky, Parle, Titan, Samsung and Coke?
Aamir: No, right now I am doing Tata Sky, Samsung and Titan. So right now I am doing three products, but apart from these I'm also doing certain public service films like Atithi Devo Bhava , and I've done some for RTI. I'm working on a campaign for the prevention of suicide for the Mumbai Municipal Corporation.
NDTV: Is there a concern of overkill? Just that you are in too many ads?
Aamir: Well I'm doing three products, and I do not think three products are an overkill at all. As far as advertisements go, I try to keep it limited so that I don't dilute myself, and when people are being told certain messages, it doesn't get lost in me giving 10 messages. So I am trying to restrict that. Mostly staying with education as much as possible and Atithi Devo Bhava.
NDTV: A couple of your films have had the education focus. So this is the Aamir Khan formula, is it - that you do a limited number of movies a year, you don't try and sell them for a huge amount, you sell them for a kind of reasonable amount, and you get into a sort of profit sharing arrangement with the distributor. That's a win-win, is that the key to box office success?
Aamir: For me what is important is not the quantity. First of all, I have to be happy doing what I'm doing. That's the core thing for me. If I'm not happy, I won't do it. Whether it is an ad, or a public service message or a film, whatever it is I have to be happy doing it. So that is step one for me, but coming to the economics of it - any film is a success or a failure largely because of its budget. So if you want to make a film, and often the films I want to make are pretty bizarre, so you have to make sure that they are made in a budget which is sensible.
NDTV: So here you are trying to do things the sensible way. You see this stuff around you that is not as sensible, but in the public's perception, everyone is a big star, everyone's movie is a big hit. Does that frustrate you sometimes?
Aamir: No, it does not. I'm really happy with the success that I'm getting and the response that I'm getting to my films. My films are doing really well, so no, it doesn't.
NDTV: So, it's not when you say Shah Rukh is a great star, Salman is a great star, but even if their films don't do well, who is the king of the box office?
Aamir: They are very big stars. All of us have successes and failures, and just because I have been fortunate for some time, doesn't mean I am some...
NDTV: Now you're being diplomatic.
Aamir: No, I am not. I am fortunate that my films have been successful but please remember that they are not because of me, but because there are a whole lot of talented people who have come together to work on these films.
NDTV: Right, so it's a team effort. In the industry, despite all the hype, despite all the ads saying - hit ho gaya, nahi hua , whatever...within the industry people know... ki film pitt gayi?
Aamir: Yeah, yeah. In the industry everyone knows.
NDTV: You can't fool the industry.
Aamir: No. Everyone in the industry knows how much the film has cost, how they have done, what they have sold for and what the business is. You can fool some people from the industry, you can come out with ads.
NDTV: You can fool some people sometimes, but you can't fool all of them all of the time?
Aamir: Yeah, but I want to say a very important thing. It is the responsibility of the creative talent - if they want the freedom to do the work that they want to do, then it is really our responsibility to make sure that that freedom will remain with me as long as I deliver to the market...as long as I make sure no one in the market is losing any money out of investing in my films in any way, only then will that faith remain in the market.
NDTV: I think that's an important point. That creative stardom should be responsible. That's all we are going to get out of you this time. Next time hopefully we'll sit with you and talk about which film was actually a hit or a flop, and not just your movies. Let's see if we ever get around to doing that with you, but thanks very much indeed for talking to us.
Aamir: Thanks Vasu.