Rangoon Business Economics: Case of costs failing a film before release

Vishal Bhardwaj’s Rangoon is a classic case of economics giving the film absolutely no chance to recover costs at the box office. Even if Rangoon turned out to be a fairly good film, it would still be a flop. What it needed was extraordinary content and growth that matched films like ‘Piku’, which sadly isn’t going to be the case.

The film could be this February’s ‘Fitoor’ – which was made on slightly lower costs, but opened to even poorer numbers and was a major disaster at the box office. While it’s too early to write a film off on the second day of the release, a low first day total means it needs nothing short of a miracle from here – more so since growth in business hasn’t really come on Saturday. Some places have in fact shown drops from Friday.

The problem is not really the film here, but the fact that directors like Vishal Bhardwaj are given the budget and canvas to make films as big as this. Ideally, he should be casting non-stars who charge a much lesser acting-fee and the film should be made within a budget of 15-20 crore.

For example, a film like Badlapur, even though it had a more bankable star, would still fail if it was made on a budget of 80 crore. It went on to become a hit because the actor charged less and the film was made within a realistic budget for its genre (27 crore including print and marketing).

With Rangoon, it’ll be a struggle to even recover the marketing expenses from theatrical business – let alone the hefty acting fee.

Sajid Nadiadwala makes a profit out of Rangoon, but Viacom18 could end up losing more than 40 crore of its investment. This would put a lot of pressure on their big film this year – Sanjay Leela Bhansali’s Padmavati which is possibly the most expensive film ever made in the industry.

Rangoon Business Economics breakdown (Note: All figures as per trade sources)

• Total Investment: ?80 crore (Sold to Viacom18 for 67 crore + print and advertising 13 crore)
• Satellite rights, Digital, Music: ?15-20 crore (approx)
• To be recovered from domestic and overseas: ?60-65 crore

Approximate figures of how much Rangoon has to collect in India

• Less than 50 crore: Disaster
• Less than 80 crore: Flop
• Rangoon will recover costs if it does ? 110 crore
• If Rangoon collects more than ? 120 crore: HIT
• If Rangoon collects more than ? 160 crore: Super Hit
• If Rangoon collects more than ? 200 crore: Blockbuster