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We’re back again. After the last post of Prof Artha Shastri, we have been inundated with questions. The Professor picks up 4 that caught his fancy.

Q1

Dear Profji,

A few weeks back I watched ‘Mukhbir’ at a multiplex. I noticed that they had an interesting scheme running. You could refund your ticket at the end of the film if you didn’t like it. After I finished watching the movie, I felt I had to get that refund but I baulked at the prospects of standing in that long queue. But I remain intrigued by this ploy of the Producers. Is there an economic rationale to all of this?

Yours etc
“main aaj bhi phenke hue paise nahin uthata”

A1

Dear “main aaj bhi phenke hue paise nahin uthata”,

I share your grief of watching Mukhbir and what’s worse there was no money back guarantee for all of 4 people who watched that movie with me. But your question is extremely interesting.

Money back guarantee or satisfaction guarantee schemes are key institutions used by sellers to build trust among consumers. A key element of these schemes is the ability of the consumer to return the “product” in “like new” condition which, hopefully, can be resold thus restoring both parties to their pre-transaction utilities. James Andreoni of University of Wisconsin has written a good paper on experiments on satisfaction guaranteed schemes. The origins of money back guarantee schemes dates back to the times when there was no standardization of products. And a scheme like this signaled the seller’s confidence in his product.

The problem with Mukhbir kind of strategy is that the returned tickets can’t be resold since movie tickets (like airline tickets and tables at a restaurant) are perishable commodities. Secondly, the producers’ confidence in their product in this case was grossly exaggerated. Lastly, I think the producers forgot that the total economic costs of watching a movie is the sum of the cost of ticket and the time spent/wasted watching it which could otherwise have been gainfully used. If they could think of all of the above they would have decided against making the movie to start with.

Q2

Dear Profji,

Not a single day passes when there’s a new Hindi movie launched and within minutes someone comes up with the news that it’s a copy of a movie from Botswana. Is there a strong economic logic for copying? More importantly, what’s the best course of action for a producer/director when charged with plagiarism?

Yours Aagyaakari,
“Chori, upar se seenajori”

A2

“Chori, upar se seenajori”,

Let me start by plagiarizing Stewart Home who held the view that plagiarism is perfectly acceptable behaviour since it ’saves time and effort, improves results, and shows considerable initiative on the part of the plagiarist’. Now, beat that for logic. Plagiarism is intellectual lethargy on part of the perpetrator. But it leads to no real loss for the original creator. It is this sense (morally wrong, nevertheless) of not hurting anyone that leads to plagiarism on the scale that we witness. So, you have the benefits and you don’t hurt anyone in ‘real’ sense. That makes it easier for many to go ahead and plagiarize. The best course of action when charged with plagiarism? Here’s my prepared speech (feel free to plagiarize it):

“Time, that cosmic redresser of balance, has proven that whenever a civilization has placed restriction on free exchange and use of ideas, imposed constraints on building edifices on the foundations of others, it has stifled progress. It’s not a zero-sum game here. Plagiarism hasn’t harmed anyone in real economic terms. The eventual purpose of all art and knowledge is to be disseminated to as many as far and as wide. Thank you.”

Q3

Professor,

I don’t read much. But when I do, I discover interesting facts. Like yesterday, I found that 85% of the films released in a year do not make money. Then why hasn’t the industry folded up yet. What is running this whole loss making enterprise? Should I suspect a foreign hand here as well? Should I ask Sushma Swaraj?

Yours “Tez Dimaag Waala”
Faster Fane

A3
Dear Faster Fane,

You remind me of my friend Dabba who reads infrequently but comes up with startling insights. And he has a sense of irony, so he doesn’t call himself “tez dimaag waala”. Anyway, coming back to your question. You don’t have to go to Sushmaji for the answer to this question. I can give you a few pointers

Firstly, the distribution structure of a Hindi film ensures that the gains and losses accrue at the distributor level (mostly) who has a portfolio of films through the year. 85% films losing money doesn’t necessarily mean 85% of producers losing money. Nor does it mean 85% of distributors losing money since they manage a portfolio of movies. Secondly, there are many more channels of revenues these days than theatre runs, namely, satellite rights, music rights, merchandise etc. Lastly, if you think each new film as a new product/brand introduced, a 15% success rate is way above the success rate of new product introduction in any other industry (technology, pharma et al).

Q4

Profji,

Have you noticed a certain assembly line nature of female actors in Hindi films these days? They all look the same (esp from the Bhatt, Priyan camp). Have the worst fears of communists come true? Is Henry Ford God? What’s happening?

Yours
“Lal Salaam”

A4

Lal Salaam,

Your fears are misplaced. Let’s go back to the history of assembly line. The whole purpose of an assembly line is to make industry more productive. An assembly line product is one where the customer values standardized expectations more than craft. The pioneers of assembly line science like Oliver Evans, Eli Whitney and Gaspard Monge knew this expectation and applied the concept of assembly line in flour mills and cotton gin. Now, how different is the Hindi film heroine? To misquote Henry Ford, “the audience can have any heroine as long as she has a good cleavage and skills in gyration.” (with apology to Model T and Color Black). In such circumstances, assembly line was but a natural outcome.

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