Filmmaker Rakeysh Mehra: 'Raising the Bar Is Where the Challenge Lies': India Knowledge@Wharton

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Filmmaker Rakeysh Mehra: 'Raising the Bar Is Where the Challenge Lies'
Published : May 20, 2010 in India Knowledge@Wharton

Indian filmmaker Rakeysh Omprakash Mehra sees his industry undergoing major
changes, such as institutions replacing private financing, increased use of digital
technology, a breakdown of the star system and its inefficiencies, and the emergence of a
more professional, level playing field. Mehra is best known as the writer, producer and
director of the 2006 blockbuster, Rang De Basanti. At the recent Wharton India
Economic Forum in Philadelphia, Wharton operations and information management
professor Kartik Hosanagar spoke with Mehra about the changes in the film industry, This is a
single/personal use
including the controversy over intellectual property rights and royalties. copy of India
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An edited transcript of the conversation follows. e-prints, posters or
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Kartik Hosanagar: Congratulations on all of your recent successes, including Rang x407.

De Basanti. Originally, you were in advertising and then you made a career
transition into filmmaking. What drove that transition?
Rakeysh Mehra: It was like flowing with the water. Nothing was pre-decided. I just went along
from one profession to another until [I found my] calling, and I guess cinema was it. Having
discovered cinema -- and I am still discovering it -- it gave me a lot of happiness and satisfaction. I
could also express myself through the medium, much more than I could have done anywhere else.
Hosanagar: I would have thought you could have expressed yourself through advertising as well.
Mehra: I had a lot of fun in advertising. I started producing commercials. Then I started directing.
A lot happened when MTV moved into India [in 1995]. They gave me the task of "Indianizing"
MTV. It was great fun ... making the first commercials with [film actor] Amitabh Bachchan. At
that point in time [in advertising,] there were only models and non-cinema personalities; celebrities
were not common. At the same time, there were huge technological breakthroughs in advertising....
[Also,] a lot of international commercials came over because India was booming economically.
The automobile industry, including Japanese cars, came to India, and we started shooting for it. But
in advertising, you are always working under a given brief. Your primary job is to sell. That is a
very limited expression. Technically, yes, you can express yourself.
Hosanagar: That makes sense. Let's talk about your films. Your second film, Rang De Basanti, was
a phenomenal success and among the top three highest-grossing Hindi films ever. What were some
of the factors that led it to its success?
Mehra: Actually, when I was conceiving the film and making it, and even during its release, I could
have never thought that this film was going to shape up the way it has. It became more than a
movie. It went on to occupy the subconscious of the nation.
There are millions of reasons for the success of the film. But once you are going with it, you are going
with your instincts -- a small voice inside you, which is the loudest. That drove me into writing the script
and then taking it forward -- producing and directing the film. You can do justice to the subject when you
are really dying to say something, dying to express yourself. Then, you are drawing out of your own real
life. The soul originates from your childhood, your youth, your school, your college, your profession,
what you have seen in life and what you imbibe from life and learn from life. And then you give it back.
Hosanagar: You mentioned there were a million reasons why it was successful. There could have
been reasons why it could have failed. On that note, I want to look at the business of cinema. It is a

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Filmmaker Rakeysh Mehra: 'Raising the Bar Is Where the Challenge Lies': India Knowledge@Wharton
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head-driven business. Most of the profits in the industry are concentrated among a few movies, and
certainly their success is highly unpredictable. A lot of folks at Wharton have studied these kinds of
head-driven businesses -- be it movies, music, start-ups, venture capital, product releases and so on.
We are always trying to understand what contributes to the success of these head-driven
businesses, and can you predict that in advance? Are there best practices to filmmaking? Are
certain things crucial to making something successful? Or is it always that you make the movie and
it is a hit or a miss, and you have no clue what is going to happen?
Mehra: There are various factors that are always part of a successful film. Obviously, you can't
predict the quantum of success. Essentially, we all work with inner glass ceilings -- to break
through those is the challenge. Raising the bar is where the challenge lies. To kind of be a game
changer in your own game is where the fun is.
One has to start with scripting process -- it's the writing and the content which defines it. You can have a
good script and you can make not such a good movie, and yet it will be successful. But to start with, if
you don't have a good screenplay and a good story to tell, you can get the best artists, the best cast and the
best technicians behind the camera, but it will not reach out to the audience. If there was one [key]
ingredient, it would be the content and the writing.
Hosanagar: I completely agree. But one interesting contradiction is that in Hollywood, close to 10%
-- and sometimes 12% or 15% -- of the budget is spent on developing the story, the script and so on.
In the Indian film industry, that is sometimes as low as 1% or 1.5%. Do you think the Indian film
industry is under-investing in development?
Mehra: Absolutely. I can't agree with you more. We need to place a lot of emphasis on development
budgets and not necessarily on the film you will make. While you research many models of cars, it
is just that one car that comes in front, and all that money you invested in development need not
necessarily convert itself into the finished product. So, yes, you are so right when you say that we
should invest more and more in developing content. Out of that conten,t you will find something
you can take forward and put on the assembly line.
Hosanagar: I see some parallels with other industries that are focused very heavily on research and
development. They often make the most of their money through licensing. Qualcomm in the U.S. is
a technology company that fits that bill. Is there an opportunity for a purely development-focused
firm in India whose job is to produce stories and scripts and license them?
Mehra: Yes and no. Since no one has tried it, we don't know the answer. Once you try, you have
your own learning curve. With a lot of ideas, you reach a roadblock half-way or almost near
completion. I've always felt it is better if a part of your overall budget is put towards content
development. If you are a studio house or a production house, you can invest in that part, and out
of there take content and finished screenplays and put them forward, rather than starting a
specialized house there.
Hosanagar: Switching gears, I want to talk about recent technological innovations. Digital
production has brought down the cost of filmmaking considerably, and digital distribution is also
new in India. Companies like UFO Cinemas and others offer digital distribution that allows
simultaneous release in multiple markets. What impact would this have on filmmaking and the
industry in general? Is the adoption of these technologies still fairly limited, and if so, why is that?
Mehra: We have been hearing [about] digital for the past 15 years. It's not like it just sprang up.
Hosanagar: But do you produce in analog film reels? Or do you do digital production for most of
your films?
Mehra: These days most of the films are made [in] analog, and then converted into digital.
Hosanagar: So, a film is primarily produced in analog, converted into digital and edited in digital.
[You then] reconvert it back to analog and distribute it in analog.
Mehra: We distribute it both in analog and digital. In India today, digital prints are gaining

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Filmmaker Rakeysh Mehra: 'Raising the Bar Is Where the Challenge Lies': India Knowledge@Wharton
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momentum -- almost 50%. India has taken the lead in digital projection. In terms of actual shooting
and utilization of digital cameras, they still do not give you the same results as film, not only in
India but worldwide. In Hollywood also, digital movies are either Indy films that are low budget or
those that have to be made faster. This has given new filmmakers a lot of elbow room. There are
issues [with] conversion from analog to digital and digital to analog. But film does give you a
certain depth.
Hosanagar: From an outsider's perspective, the movie industry is heavily relationship-based, and
one really needs to be in that industry to participate. How open is the industry to new entrants?
Can people with new and creative ideas easily enter and bring about innovation?
Mehra: Yes and no. It was a very closely held industry [until] five years ago and a good 20 or 25
years before that. I don't know the history before that. It was an industry which was clannish and
relationship-based. It was difficult to break into it. Even if you were breaking through, you were
doing paddles in an arts cinema house and so on. But today it is completely changed. And it is
changing rapidly by the hour.
It is no longer a cottage industry; it is more open and [has] a level playing ground for everybody who
enters, because financing has become structured. When the size of the business grows and the finance
becomes structured and comes from institutions, banks and companies listed on the stock market, the
whole game changes. The people who understand the business of films [are not] emotionally attached to
relationships. They are more attached to the results. How will the film be monetized? How is it going to
be marketed and distributed? What kind of product is it? Are we raising the bar? Is the content changing?
All those things come into play tremendously. New talent is born every day. There are new actors. There
are new directors. There is a new kind of writer. There are breakthrough subjects. [All that doesn't] have
the momentum one would like to see, but yes, the big thing is already there.
Hosanagar: Over the last seven or 10 years, a lot of the financing in the Indian film industry has
come from multinationals, including investors in the U.S. and Wall Street. Has that dried up now,
given the recession in the U.S. and the impact on the financial services industry in the U.S.?
Mehra: Not really. When it all began, the funds came mostly from the U.S. and [elsewhere in] the
West. But now things have changed as India itself is a consumer market. We consume most of what
we produce ourselves -- almost 80% to 90%. So, even the money is being generated from within the
country. We find Indian institutions like IDBI (Industrial Development Bank of India) and Indian
banks looking at financing movies. Even [international] distribution houses and studios are
entering the Indian distribution [industry]. The big five American studios are in there now. It is a
lot healthier, with the flow of funds getting more organized.
Hosanagar: What is the most important or interesting innovation in the industry in the last 10
years?
Mehra: There have been two key changes. The industry was driven by a star system around five
years ago. That system has broken. The whole star system has fallen. Earlier, you would find a star
actor doing many projects at the same time. There were instances where actors had signed up for
10 to 12 films and had 10 films on the floor. As a result, all of them used to suffer, because time was
limited. But now, better and healthier contracts have come in, and an actor is doing one film at a
time. One technical crew gets into a movie, finishes it, gets out and [then] gets into another
production. The breaking of the star system has been instrumental towards [creating] better
cinema.
The other key thing is the clean finance that has come into the business. People who understand money
manage the financing. It's not an unorganized way of giving money at high interest rates. You can
actually plan the entire budget and your cash flow [in line with] the milestones the film achieves at
various stages. [The milestones are] developing scripts, pre-production, actual production and shooting of
the film, post production, the marketing and the selling. So, at every stage, [a portion] of finance can
move in. You don't need the entire [funding] at one time. And because it is not some moneylender
[financing it], everything is structured. There is a timeline to your cash flows -- inflows and outflows.
That has brought about a paradigm change in the whole industry, in the way we think [through] the

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Filmmaker Rakeysh Mehra: 'Raising the Bar Is Where the Challenge Lies': India Knowledge@Wharton
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projects, in the way they are implemented and in the way the content is shaping up. That is a very healthy
sign.
Hosanagar: There has been a lot of controversy lately about intellectual property issues. Are rights
properly attributed? Are people given their due credit? Is the industry doing enough in terms of
managing IP carefully, in terms of paying for rights and attribution?
Mehra: The subject of intellectual property is cloudy. First, we have to understand what IP is. How
do we separate it from royalties? How do we separate it from publishing rights? When you create
something you create intellectual property, and then it is monetized. For a long time, the money
was being confused with IP. IP is unique. It is something you create. It is original. Money is not
unique. Money is a common commodity. So that confusion needs to be sorted out.
The government of India will table a bill in [the current session of] Parliament wherein writers, directors,
composers, music directors and lyricists will have copyright. But, then again, there is some ambiguity
about it. Copyright is part of a contractual engagement. You can discuss it over the table and you can let
go of it. [You can] assign your copyright for a sum of money. So essentially, it is evolving. Clarity will
emerge as we go along. It is a step in the right direction, though. We ourselves have taken the initiative. I
have myself written almost 700 letters to the ministry [of information and broadcasting], to the home
minister, to the law minister [and] to the prime minister's office, [and] gotten all the organizations
together.
My take in this is that cinema is a new medium, a new art form. It is a collaborative art form where, unlike
finance, you compose a song or individual art. The director partners with a writer and takes it to a
producer. The producer would then underwrite the risk of making the movie. Then, in walk the
cinematographers, the choreographers, the action directors, the editors and so on. Everybody should have
a part of the royalty. The percentage of royalty will depend on the project's market viability and your
standing.
All this will evolve, but it is a good idea to have a point system where you can share your royalty in
perpetuity. This will bring in a lot of transparency into everything. But a lot of questions have to be
answered. How do we understand what the actual monetization was and how the money flowed? Only
once you can account for that money -- including in terms of how the exhibition works and how the
money comes back to the producer -- can escrow accounts be opened and banks can be instructed to pay
people lifelong. We can learn from the U.S. as to how they have implemented things. We can also learn
from the mistakes of the West. And then [we can] evolve our own "Indianized" system for the sharing of
IP and royalties.
Hosanagar: Thanks so much for your time.
Mehra: My pleasure.

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