Boycott Bollywood! Well, I am not talking about this politically, but let us see what happens when such a call is given. Initially the Bollywood Gang does not even know about this boycott. The mainstream media ignores it, and does not report it at all. Then the noise gets bigger and the BG is in denial – ‘a few people talking nonsense does not hurt us’ they say.
Next stage is ‘We can live with this’ turns into panic – look at the losses that PVR, Inox and the movie industry in general is suffering. Then they worry about what to do. Then the boycott brigade gets over-confident and thinks it can kill all movies. The BG stops making movies.
Then there is a movie which is a hit, and the BG ignores the hit. The boycott brigade gets over-confident. Movie is a super duper hit. Then more movies follow, and the boycott brigade’s time is over. Fairly obvious that then the cycle repeats itself. Ditto.
Who solves the problem? : The correct answer is CAPITALISM. The highly charged movies like ‘Do Bhiga zameen’ and ‘Jagte Raho’ too were financed by Capitalists. Capitalism is here to solve problems and get rewarded for that.
So it will be capitalism which will find a solution for painful things. So if you were too lazy to go out and eat, capitalism gave you Zomato. If you did not have the capital to buy a car and the willingness to drive, it gave you Ola and Uber.
If Ola tries to increase its margins beyond 30%, that problem will also be solved by Capitalism. A new competitor will emerge – and start working on a 20% margin. Many drivers (suppliers) and users (consumers) will migrate towards the new players!
This is of course a perfect market scenario and capitalism does not work in primary education and basic medical care. It needs a lot more intervention from the state to make capitalism work in education and health care – that is called subsidy and incentive systems.
Capitalism constantly looks for problems to be solved – and is happy to fund people who develop solutions. So whether it is a better website, better airfare, better movies –capitalism will find a solution.
As usual and like all human behaviour, we will swing from not having anything to having an excess of that stuff. The late entering capitalists will be taken to the cleaners especially if they are leveraged like the bank.
In case of Boycott Bollywood, it is the exhibitors like PVR, Inox who will be hit by the collateral damage and the capitalists will withdraw their capital from such ventures. This will see a big fall in the prices of these shares and if they are leveraged, it will KILL them.
None of us are ever prepared for such a big fall in revenue. In 1993 my brokerage income fell 95% (yes, fell 95%). I was not at all ready for such a big fall!
In the 1970s there was one super hit movie named ‘Jai Santoshi Ma’. This was followed by 24 movies with the same theme. They all had to bite the dust. Then the funding stopped and they made different movies!!
PV subramanyam
writes at www.subramoney.com and has authored the best seller ‘Retire Rich - Invest C 40 a day’