The ultimate Economics


In the late 90’s when the Khan trio was making waves at the Box Office, there was one veteran who was dishing out a movie every second month and sometimes more than one in a month, a  trend which continued for over a decade. Mithun Chakraborty did intrigue me then, days when there was no google to check the economics behind this. The material relied on were mostly found in saloons.

“MITHUNOMICS” as I refer to, was possible in that era and practically impossible in the current Multiplex generation.

This went on to prove that one does not need a big star or a big banner to reap in profits while not making any noise at the Box Office.

First things first, Mithun slowly drifted away from Mumbai to Ooty down south, where in he had invested in a few businesses that included hotels and educational institutions.

A three-time national award winner would not want to let go of his acting intentions just because he moved out of Mumbai. This is where Mithun, the businessman played his cards well.

Ooty is a seasonal tourist place. However, during the lean season, tourism starts dwindling and the cascading effect is directly on the Hospitality industry.

Mithun decided to use this lean period to his advantage. He gave probably a 60 day call sheet to the producers, the leading lady would invariably be  Gautami, Shantipriya, Rambha, Ramya Krishnan, thus glorifying the resume of these actresses of having acted in a Bollywood movie. When the budget was slightly higher, an Ayesha Jhulka or a Pooja Batra would step in.

The Directors were mostly from South (TLV Prasad, Rama Rao, K. Bapaiah).

Charanon ki Saugandh
K Bapaiah directed this 1988 flick

A large part of the production cost is the fee of the lead artistes. Mithun had the equipments to shoot a movie and also capitalized on his hotel properties in Ooty, where the elite in the film crew stayed on. These were provided at discounted rates. So, in effect he was cashing in on both “Income from Profession” as well as “Income from Business”.

This tight schedule would minimize the interest rates and limited logistical issues in Ooty, helped in wrapping up the movie in quick time.

The movies were all formulaic, a dozen fights, 5 songs (including a mandatory item song), revenge, triumph of good over evil and finally all’s well that ends well. He sported the same look in all the movies. He went on to reject directors like Maniratnam, as he wanted to retain his look for the dish he was serving at such alarming frequency.

TLV Prasad movie

A low budget movie with Mithun could be easily wrapped up under a budget of 70-80 lakhs (50% being his fee and the balance comprising of fee for the others and other production costs). So who were his audiences? Like every dish has its own connoisseur, a Mithun movie had its own set of audience at B & C Centres, a term mostly referred to audiences in Rural India and small towns. The movies were released in these centres and in single screens in the Urban centres.

Distribution centres in India are divided into six territories: Bombay circuit, Eastern circuit, Delhi-U.P. circuit, C.P.-C.I.-Rajasthan circuit, Punjab circuit and the South circuit.

Mithun movies sold for anywhere between 20 to 25 lakhs in each of these territories with a size-able amount of prints being circulated. The movies could see an average occupancy of 75-80% over a 2 to 3 week run. So even a flop movie could bring back the investment and the money would be pumped back in to an other Mithun movie only. The Return on Investment here was far higher than any other bankable star back then. No wonder this made him the highest tax payer at that time.

Every innovation has a shelf life, alas this too had. The digital era and the dwindling single screens spelt doom for this kind of an experiment. The Satellite and digital rights of these movies have further raked in the money much after their shelf life. Even to this day you see these movies while channel surfing.

Key Management lessons from Mithunomics :

  1. Don’t be afraid to create your own niche
  2. Look for diversification of your Income Stream
  3. Create captive customers


Trivia: Ooty was once house to Hindustan Photo films that manufactured photographic films among other related material that once employed over 5,000 people. This too was victim of the Digital Era.