Film director-producer Rohan Sippy has watched Bollywood evolve from two perspectives. His father, Ramesh Sippy, is a well-known Indian film director who forged his career at a time when movies were produced on shoe-string budgets, they were sold by word-of-mouth, and box office returns were the only source of revenues. Over the course of his own career, however, the younger Sippy has witnessed an influx of domestic and foreign investors on the scene, which has led to skyrocketing production costs and a new emphasis on marketing and “hard-selling your product” to achieve higher returns through multiple distribution channels. In an interview with India Knowledge at Wharton, Sippy discusses the impact of these changes on Bollywood, the prospects for a global film industry in India, and why independent filmmaking still makes sense for some projects. 

An edited transcript of the conversation follows.  

Knowledge at Wharton: Thank you, Rohan, for joining us.

Rohan Sippy: Thank you.

India Knowledge at Wharton: You produced Chandni Chowk to China, which is both a cross-cultural film in terms of Indian audiences and, I believe, the earliest foray of Bollywood on the international stage. That was released in January 2009. What has the reception been, and what opportunities do you see for Bollywood in that experience?

Sippy: It was a very exciting project to work on. We released it in more territories than any other film previously. We also released it extensively in India. I think the combination of India and China, on the content side, and the ability to come out with the assistance of a Hollywood studio — to use their infrastructure to reach out to a wide audience — has been very exciting. It showed there is a lot of scope to broaden the audience for a Hindi film.

India Knowledge at Wharton: What kind of success has it had at the box office?

Sippy: It was, as everyone says, an average success. We were hoping for it to go a little further, but I think it has still managed to take a very good opening, and it has a good life on home video and all the other non-theatrical streams. So it is something that probably has not completely hit the mark, but it was a decent effort.

India Knowledge at Wharton: One of the things that struck me as I looked at the numbers for the costs of production of Bollywood movies as compared to Hollywood movies, as well as the box office returns — we’re talking one-tenth of the scale for most Bollywood movies. How do these economics work in the context of a studio like Warner Brothers, for instance, where obviously there is the box-office side of it but there is also a cost side?

Sippy: I think Indian cinema is very dynamic at this point. For most of its history it has been entrepreneurial and very independent producers have run it. In the last five to seven years, this kind of corporate side has come into it. And so there was this huge influx of money. I think that supply of money probably distorted things in terms of increasing budgets. And I think it is going to settle down to a point where the risks and rewards will become aligned better because ultimately every investor is looking for a return.

I do not think our market yet is of the size to justify the bigger-budget films that are being made at this point…. But there is still healthy growth. Theatrical revenues have generally been increasing. Other forms — whether it is home video, satellite, overseas — are keeping pace, and in a lot of cases growing as well.

So, there is steady growth, but this was probably a bit of a distortion as lots of players came in and a lot of money was chasing few projects. So the means of production were kind of taken advantage of. But I think it will settle down to a stage where we will have a more rational split between what the costs are and what the returns can be.

India Knowledge at Wharton: This is also a time, as you know, that we are basking in the glow of Slumdog Millionaire‘s success, although that actually is not an Indian movie.

Sippy: That is right.

India Knowledge at Wharton: The fact that it was a non-Indian movie that was so successful, in terms of at least its content being about India, in the foreign market — what lessons does that offer Bollywood in terms of opportunities?

Sippy: I really enjoyed the success of the film…. In such a dynamic market, everyone is learning a lot, so recently the trend has been to pursue this kind of saturation release. So every film is bombarded on as many screens [as Slumdog], that kind of pattern. Slumdog is a classic example of a film where they went out with four screens to begin with. They really built on word of mouth and created this momentum and that underdog story. “Have you seen this film?” You know, that was a fantastic strategy for the film. This is not the only film that has done it. But it really did it successfully.

So we have to learn that, and I think it is wonderful that it succeeded. There is an opportunity there, but it was very clearly made for the Western market. So I think any Indian filmmaker trying to replicate that kind of success needs to align themselves with a Western studio, or at least someone who has access to distribution and the infrastructure of the Western markets, because without that there is no chance of reaching out.

We might have made a film ten times better than Slumdog, but if you do not tie up with Fox Searchlight or whoever it is, there is no chance of reaching that audience, and that is where the real game is. The numbers are in America, and the Western markets are just massive compared to us.

India Knowledge at Wharton: There is obviously that market component of it. But the other aspect of Slumdog is the aspiration of many Indian filmmakers to make it to the Oscars and be successful. What do you feel about that component? We have not been very successful at the Oscars before.

Sippy: No, I really salute the guys who have succeeded. It is wonderful to get it. I think for any creative person it is a nice recognition, but that cannot be the reason for doing stuff. It is an award function from the United States, rewarding essentially the [film] makers and the creative people in their industry. And it is wonderful to be acknowledged by them. It makes a lot of sense if all your work is [in the United States]. It is the ultimate pinnacle.

But if you are working in Bombay, and you are working for a Hindi-speaking audience, it is not entirely relevant. So always, it is a fantastic achievement. They are on top of the world in that sense. But it is not something that can drive you when you are making Hindi films.

India Knowledge at Wharton: You have been involved in an indie production and you also have been on the commercial side. What prompted you to get onto the indie side [with The President Is Coming]?

Sippy: I think it is exciting. In urban India, there are many young audiences looking for alternatives to the very commercial kind of product that is put out there. So it was a great opportunity to do something. There were some very talented actors, a good script, and a chance to do something new. It is in the English language. It also had a kind of international slant as it involved George Bush and some very topical kind of elements.

So, that all added up to make it tempting. It was also based on a play that was very successful, so there was a proof of concept that we were working with, and it felt good to do something that pushed the boundaries. It is nice to be at the cutting edge and see how far you can push things.

India Knowledge at Wharton: This is an English-language film and it is intended for the audience in India.

Sippy: It is intended for anyone who understands English.

India Knowledge at Wharton: Is the movie being marketed overseas as well?

Sippy: We have actually appointed a sales agent, which is not the typical route that Indian films take, which is where you get the distributors for the NRI [non-resident Indian] territories. In this case, we have appointed sales agents who are aiming to sell the various rights to different territories in a slightly more methodical manner. They are going to be exhibiting the film at the Cannes Film Festival, a commercial screening for buyers, and hopefully use that as a platform to get our sales in different territories.

India Knowledge at Wharton: The economics of the industries are changing in very significant ways. What impact does that have on the nature of filmmaking in India?

Sippy: Filmmaking is essentially a costly commercial exercise…. Because of this recession, there has been a marked slowdown in advertising. The first thing that tends to go is advertising. Once advertising goes it impacts the satellite rights for films. Until recently, 25%, 30%, 35% of a film’s production cost was recoverable from the satellite rights. That is coming down drastically.

I think we will feel it down the line. I think cinemas are dropping their prices because consumers at this time are finding it [expensive] … maybe a 250-rupee ticket, a family of four or six — maybe by the time you put all your entertainment in it is a couple of thousand rupees, which is a lot at this time. So there are challenges that we have to address which I think ultimately will make us work harder on the creative and make us more focused on making content that works.

India Knowledge at Wharton: Your father, Ramesh Sippy, is a very famous Indian producer, and you have observed [the industry], I guess, not just from your experience and your time in the industry but also from his. How has the industry changed from his time and what you are doing now?

Sippy: Well, he is still working. We are working together. So he is very active with me, and it is wonderful to have his perspective because a lot of things have changed. These new entities have come in, but the inherent nature of the business has not fundamentally changed, where it is ultimately dependent on good content. But in the time when he was making [films], pretty much theatrical sales were the only revenue. And there was not this whole aspect of marketing. That is the real, big change that has come into the business, for better or worse.

Earlier, a film would run purely on word of mouth, the star cast it had and the poster that you saw outside. That was the extent of the marketing. Now, we have hundreds of channels, we have radio, we have the Internet, so many things, and that is all positive. But it also becomes a challenge, as things get more fragmented, to put yourself out there. And you are in a sense hard-selling your product more and more, which is not necessarily the right thing for each film.

India Knowledge at Wharton: Your father produced one of the most famous movies in India, Sholay.

Sippy: He directed it.

India Knowledge at Wharton: He directed it. And Amitabh Bachchan was obviously very famous in it. And I find it curious that here you are [at the Wharton India Economic Forum] and Abhishek Bachchan [who is also here] has been working with you on a lot of these movies. I have two questions on that: How did that partnership between you and Abhishek come about? And also, since both of you have families with very famous parents, I assume there are both advantages and parallels. Can you speak to that?

Sippy: Well, I think I went to Abhishek with the first script I had, and he was very positive about it, and was very keen to work together. And it was very nice of him to be proactive, and we kind of brought it together on that. And so while he is a very dear friend I think, first of all, when we are working together, I really have professional respect for him. I cannot afford to put in any personal things. There is too much at stake each time. We all want success and I will do whatever it takes to ensure that. So it has to be professional when we are working, and it is great to work with a dear friend.

As for [the family connections], I see primarily the advantages because you get access and opportunities. Ultimately, you have to prove yourself, because audiences that are paying hard-earned money for their tickets are not concerned with who your family is. Maybe they will give you one chance, a couple of chances, but after that you really have to prove yourself.

So I think within the industry you get opportunities. You have the great advantage of having met people, and a network of people who are accessible to you. But ultimately they also want to work with someone whom they perceive as doing a good job and ensuring success in their careers. So I think the parallels are more in the mind.

If you want to see it in a pressure kind of way, it will always be that. But if you look at it as a positive … which is the way I do, I have only seen that. There is so much goodwill I have received as a result of my relationship to my father, and I am sure the same is true for Abhishek, too. You try to make that work toward helping you do what you want, and I think so far it has only been that.

India Knowledge at Wharton: You have worked with Warner Brothers [which is] among the early studios that have come out with a movie with a foreign studio. How do you see this role of foreign companies in Bollywood evolving over the next few years?

Sippy: I think they had a very good group of people and they are obviously one of the biggest studios in the world. So it was a very educational experience for me also to learn the studio system and how it works. But the lines are getting blurred more and more because if you look at the studios in India, whether it is Studio 18, it has also got a Viacom component to it, if I understand, and other companies are raising money in the United Kingdom and things like that. So the lines are getting blurred [in terms] of what is Indian and what is foreign.

Ultimately, it is very much a people-driven business, so it is about the five, 10 people who were in the critical positions in each company who will determine it. And even in the case of Warner Brothers, it was essentially an Indian team that was running the show on a day-to-day basis. So it is really about getting a good set of people in and leveraging their relationship with the studio to maximize the success you can achieve.

India Knowledge at Wharton: Can you tell us how that partnership came about with Warner Brothers?

Sippy: I met up with a gentleman called Richard Fox who heads their international production, who was in India in 2006. And I had the opportunity to meet him, and we just struck a good rapport. We started talking and then when we had a script that seemed right … for me, the idea of this Indian and kind of Chinese Kung Fu element seemed like an interesting project to take to a partner like Warner Brothers, and they responded very well to the concept and the script, and it grew very organically from that over a period of time.

India Knowledge at Wharton: Bollywood has always had a very strong sales component in overseas markets. To some degree it is with NRIs, to some degree it is parts of the world which have an interest in Indian movies. Can you tell us how important in the economics of the industry is this overseas market, and how do you see that as influencing projects that are now taking place in India?

Sippy: As a ballpark, let us say somewhere between 10% and 20% of a film’s budget would be what is from the overseas markets, for some films play stronger [overseas], and some films play stronger in India. But I think it has a very important cultural role….  A very strong component of the image of India is projected through our movies, especially in international areas. So that part of it is also very significant. So, I think it will go hand in hand.

Recently, we have had films that are really rooted in India that have been successful, [such as] Ghajini in the last year. Before that, the Munna Bhai series are very Indian films that have also worked very well, both in India and outside India. So it is always going to be a balance, and that is what is nice about the upcoming kind of market wherein there is room for a lot of different kinds of products, including stuff that is very India-focused and that also has an outward look to it.

India Knowledge at Wharton: Within the India context, as these companies like Warner Brothers come into India to support Indian movies, one also imagines they are going to be coming into India with their movies. Do you see challenges for the Indian industry as it opens up to foreign movies?

Sippy: I think so far it has been resistant. I guess the language has been a restriction for foreign movies, and dubbed films have not yet taken off…. Urban India definitely is speaking more English and is more comfortable with watching English films. So it is definitely a bigger challenge coming up in the next generation that we have to compete with good products that are being made from all over the world. So I think we have to keep our production quality high.

These films — a lot of which also do well on television when they are dubbed in — have the budgets to be special-effects-driven, with monsters and creatures and stuff like that. Those kinds of films rate well on television and obviously take away some revenue from otherwise what would be local content.

India Knowledge at Wharton: Finally, if you can speak about the kind of movies and projects that you are currently working on, and also what role you see for globalization in the movie sector in, let us say, the next four or five years?

Sippy: I think both technology and globalization are going to play a huge part — in the way the digital revolution is happening. There is great equipment and possibilities to lower production costs and, to that extent, lower barriers to entry to make interesting films. And as we are getting more connected, [there are more] chances to put together stories at a lower cost which take on different parts of the world.

But it is always about getting the right people together — like Slumdog was a very interesting example of an IFS officer who wrote a book. It was picked up by a British studio, then a Scottish director came on board, and that is a fantastic way.

I guess the dream is if you can bring in a team like that — regardless of where they are from — that come together on a project, that would be a fantastic way to put a film together. And I hope that in India we can also originate these kinds of things. This time, we had some technicians who were a part of it. Next time, it would be great if the origination could come from an Indian source. Even though the creative version was written by an Indian, it would be nice if the producer was also an Indian on a film that succeeds like this.

India Knowledge at Wharton: Well, I guess you will be one of those producers.

Sippy: I hope so.

India Knowledge at Wharton: So what are you working on?

Sippy: Well, there are a couple of scripts that I am hoping to direct — well, in the genre of a thriller — so there is something like that which I have been talking to Abhishek about which I hope to roll in the later part of the year. And as a producer, I’m looking at some very interesting films made on a limited budget but with very high concepts and interesting ideas. The challenge is that there is a huge appetite for movies, a huge demand from the number of screens that we have and the fact that they need new content all the time. So I think there is an opportunity to do things.

So just trying to get the right combination of a reasonable budget, good talent attached to it … At the heart of it, it should be an exciting concept. I am trying to get those, but it is always a little bit of counting frogs. If you get three or four things and one goes out, you have to be patient enough to start again and not just to go ahead because the engine has started rolling. So you have to be able to bring it back and get it into a perfect alignment before you move ahead.

India Knowledge at Wharton: Well, thank you for your time.

Sippy: Thank you so much.