Inner-View

Nepal’s cinema industry has been recently experiencing a happy growth. How strong are the fundamentals behind this upsurge?

Timely evaluations of the Nepali cinema industry must be done in relation with the growth of entertainment industries around the world. An issue might not be relevant two years later. What we can be happy about at present in that our product has been able to replace a foreign product to a certain extent, may be 55 or 60%. But the sad point is our inability to take over a larger percentage of the market and at a much earlier time. By now we should have been able to take about 70 or 80 percent. Of course the present achievement itself is remarkable but much more could be achieved if the policy had been supportive, if serious investments could have been attracted and if an environment suitable for quality production could have been created.

What sort of policy are you talking about?

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If we categorize Nepali cinema Industry into the different phases like trial period, government-sustained period and self-sustained period, we are at the third phase now which is to say that all we now need is industrial facilities, not more. A suitable policy formulation will, however, call for long discussions. The interest of the importers of foreign films is not shared by Nepali producers. Also, exhibitors, distributors and producers all have varied interests. But as long as a policy that might require all parties to sacrifice something for a bigger gain is not framed, the clashes of varied interests will remain. And in such an environment, we will have to struggle to flourish.

What factors have contributed to the present growth of the Nepali cinema industry?

Firstly, the film industry is one of the largest industries in the country. There is no doubt about that fact since it employs more than 20,000 people, over 100 million rupees from the private sector is invested every year and the turnover is to the tune of 2 or 3 billion rupees. One important factor for growth is the direct impact of the exemption of entertainment tax. Also, because of the glamour, people are easily attracted to this industry. Which means that not all the people involved in the industry are fully committed. But there are also those who have found difficulty in detaching themselves from the industry once they have made an entry. The industry has thus grown in size, but it is also questionable whether that growth can be sustained and if at all such a huge industry is necessary in a country like our’s. That is the reason why we are bringing in the issue of quality here.

We have looked at the Nepal Film Development Board (NFDB) as potential coordinating agency. The board has just recently been formed. It comprises a minority representation from the private sector though that was not the concept behind the formation of the board initially. It also appears that the board does not have the required authority. There are still confusions about the role of the government. We fear that a majority representation from the government in the may result in genuine demands and suggestions of the private sector being sidelined.

Despite obvious potentials, we are not able to attract business from outside for shooting of foreign films in our locations. Why?

We have time and again, with tourism entrepreneurs, promoted Nepal as a shooting destination. We did a campaign in Bombay and the response was extremely positive. KC Bokadia, Mukesh Duggal and N Chandra came to Nepal after that. But unfortunately, we could not live up to the promises that we had made to them. About twelve Indian filmmakers had committed to come and shoot their films here. Of that number, three pulled out of the plan. Three others did come but went back to convince others to drop their plans as well. The problem was that they had to face too many hassles. They had to please too many people, they had to knock on too many doors to obtain the various kinds of clearances, and they found the services here much expensive as compared to other locations. We lack in infrastructure, and are we doing anything to develop it. The support system is also not effective. In contrast, other countries provided required facilities and tapped large investments. Mauritius is an outstanding example. We are therefore, facing the situation of being late starters. We could give it a try but the kind of lucrative business that could be tapped ten years ago is not possible now.

Irregularities abound. The tickets here include VAT and entry fee but not cinema development fee. The ticket tariff in India has three components. The government has exempted the cinema development fee. I will give you an example. A film hall in Jhapa that has never screened a single Nepali film prepared papers showing that it has exhibited Nepali films for 11 months, and took the benefit of the exemption. Could that have been done without the involvement of the local revenue office? The total revenue collected by the government as entertainment tax had amounted to Rs. 110 million before the year the cinema development fee was introduced. It went down to Rs. 60 million in a year and, this year it has further dropped to Rs. 20 million. How is such a massive drop possible? Then there also is smuggling of foreign movies. Large numbers of porno films are passing censorship and being screened in halls.

There is sufficient manpower and they have become trained. Our artists and technicians are at par with anywhere else’s. Cameramen, soundmen, recordists are very well trained. But there is still shortage of script-writers. And that is why most of the films have been ineffective.

It is still there, especially for mixing. The monopolistic attitude of Nepal Film Development Company (NFDC) is also growing. Which perhaps means that we need another lab in the country. At present, we have no choice but to use Kodak films. We would perhaps want to make films at Afga or Fuji. So we need the labs to develop other films. Otherwise it appears like we are trying to make the film industry Kodak-oriented. NFDC has relations with Kodak and all movies have to use Kodak films to be processed there.

There is virtually no censorship. If I have to comment I would totally condemn our censor policy. If censorship exists, it exists only in the context of Nepali films. Take the instance of the issue raised about the film "Aago". If the story line, the subject or the dialogue was questionable, the objection should have been made at the time the script was being approved. If the shooting is done in line with the script, I don’t think it is right to raise any objections. Of course what could also happen is that when the script is transformed into visuals, the picture could be more strong and influencing without the technicians actually wanting that. Nonetheless, I feel there is a necessity to define as to whether a movie can be made on such subject matters as depicted in ‘Aago’.

You had teamed up with a few of your friends last year planning to make nine commercial movies every year. Why was the failure to deliver the promise?

Due to the lack of funds to invest. We were to make nine movies but we managed to come up with only three – Guru Chela, Basanti and we also invested in Caravan. Certain expected commitments could not materialize. Funds sufficient to produce two or three films were also diverted into Basanti.

Now we will come with technically stronger movies. And the cost of one such movie will be twice that of other ordinary ventures. We believe that we should now go for quality and stop making 16-mm films. This is the time to expand our market. If we don’t take the initiative, foreign movies will take over our market.

The answer lies in the fact that at present we are selling our products too cheaply. Hence our demand that we should be allowed to determine the tariff of our product. We had brought out this issue here before it was raised in India. But this has now been implemented in India and the whole business scenario there has now changed. ‘Mohabbatein’ has a different rate and so does ‘Mission Kashmir’. Now the Indian producers are dictating prices for their products. My sales from ‘Basanti’ would have touched Rs. 10 million mark had I been allowed to charge Rs. 100 for a ticket. And my target audience were the upper income bracket people who could afford to pay Rs. 100. Why impose that restriction? It is against the policy of economic liberalization. It should be upto us to create the audience. The risk should be mine because I am going to be the loser if I can’t work things out.

How satisfied are you with ‘Basanti’ and the volume of business it is doing?

It is doing very well. We had invested around Rs. 5.2 million and as of now, Rs. 4 million has already been realized from Kathmandu. We are expecting a total of about Rs. 5 or 6 million, not more, from this initial round of screening. We do not think it will do as much as, say, "Jindagani’. We will be satisfied if all the Dress Circle and Balcony seats are taken during holidays. And that has been happening so far.

It will be difficult to come up with a project like that very frequently. For Caravan we received tremendous support from various quarters. But then we also had to face unexpected hardships and hurdles from some sectors. Some organizations accused us of human rights violation and cultural intrusion. These were attempts to blackmail us. So, on the one hand, you are serving the nation and putting in money and sweat, and on the other, there are various accusation levied on you. Nobody wants that kind of environment. Larger stake-holders in the project like Antelope, Bac Films, Galatee and National Studio that had teamed up to make Caravan, were discouraged. And of course, there is no dearth of subject matter or places for film-making around the world. And in fact, I am planning to get involved in films that are to be made in places like Thailand and Israel. Of course, we are yet to make a decision. And there is also a project being developed to make films in the USA on the script by Eric Velli. The films are to be backed up by distribution company Daniel Ostras & Company which was also responsible for the distribution of Caravan. And if our company, National Studio, gets the opportunity to invest in these films, we will do so. As far as making films in Nepal goes, we will have to make films which we can sell in the international market. That will naturally mean a big-budget project and the product cannot be screened for a ticket price of Rs. 30. So either we should be allowed to exhibit the film at suitable ticket price or we might altogether give up making films in Nepal. Cinema-viewing is a luxury in other countries, but for us it is cheap entertainment. Bombay films are at par with Hollywood films technically. Is it possible for us to compete with them? All we investors can do is to watch for a year or two if the scope for cinema-making in Nepal improves. Otherwise remaining as a producer of Nepali films will be a stupidity. It would be a better option to go to Bombay or somewhere else where there is scope.

You had said, while launching Shangrila Channel Day TV, that it would help promote Nepali cinema. How is the situation now?

We designed our program focusing Nepali films. And accordingly the program took off. But half way through, Nepali producers were not as supportive as they should have been. They began looking at short-term benefits. For example, we used to buy films at Rs. 200,000, but they began demanding twice that amount. They even started bargaining for Rs. 10,000 or 20,000 with other organizations. We have the biggest library of Nepali cinema. But we could not run that channel as a totally cinema-oriented channel. We had to change our strategies all of a sudden because we could not depend on Nepali producers any longer.

Without repeating the programs, it is not feasible to run the film channel. If you show a film that has cost Rs. 2,00,000 five times, the cost comes down to Rs. 40,000. And if the program cost cannot be brought down to Rs. 20,000 or 25,000 per hour, it does not become feasible. So repeating film is absolutely necessary. The only issue is how often they should be repeated. And if bulk money is put into program purchase rather than program production, like we did, repetitions become essential. If the Rs. 6.5 million that we spent on buying films had been spent on production of our own programs, the situation would have been different. A cinema channel cannot be run in the absence of support and cooperation of the film industry. And I did not receive that.

That means Day TV is not doing well financially. You are also nearing the end of your contract with NTV. Can it be said that your marketing has not been effective?

It is not that our marketing has been ineffective. The fact is, the market has not been able to support this kind of transaction. We still have some accounts to work out with NTV which has been often using our time during the Olympic, budget presentation etc. In fact there is a necessity to form a separate mechanism to work out all that with NTV. And we have never owed NTV any amount that is beyond the support of our bank guarantee. We sometimes paid them after two months but the amount was amply covered by our bank guarantee.

It has to be understood that I am a broadcaster and my intention is to involve the private sector in television broadcasting. That is why we have been in operation for the last seven or eight years. This is a long term investment. In the one-year of operation we lost Rs. 12 million though we were expecting a loss of Rs. 15 million. But we have been paying taxes, and contributing around Rs. 16 million to NTV. We have also been successful in creating hundreds of hours of program and about 20 very well-trained personnel.

Now the government has asked for proposals from the private sector to establish television network. This is the result of eight years of our involvement. And the investment of Rs. 70 or 80 million that we had made was to arrive at this point. I began the campaign alone to get here. Now other parties will also share benefits of my efforts.

Most of your ventures have either been dropped or have not been successes in terms of business. But you have been still managing to arrange finances for other new ventures. How was that possible?

About Birat FM we had to drop as Kantipur had been given permission to establish a station at Bhedetar. We were unable to compete with our 1 KW capacity. Phoenix Channel Pvt. Ltd. project with Koreans was postponed as the Koreans, who were supposed to invest US$ 14 million, just vanished after obtaining licence.

About financial arrangements the funds we personally arranged have been sufficient. But we have also taken loans. We have been working on a loan – equity ratio of 1:1. And our company is generating enough funds to meet debt servicing, though it is still not in profit. Shangri-La Channel is a Nepal-US joint venture. My American partner RD Tuttle has 50 percent equity in the company. To establish a private sector television company was my long-term goal. And I was prepared to face losses and I know that the initial ten years of the game would be loss incurring ones.

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"We are selling our products cheap"