Many companies are becoming like the film industry. Too much of the people costs are towards the ‘star’ – which leaves very little budget for other costs. Take a movie like Paa. It could NEVER have made money if Amitabh and Abhishek were to be paid market rates. However since it was a family made movie, it cost only Rs. 5 -6 crores. At this budget level it could make money.

However a movie like Black which cost Rs. 70 crores was a FLOP the day it was made, not the day it was released. It takes a foolish / stupid / brave man to sink Rs. 50+ crores and hope to make money. Kites and Ravaan were both big budget, expensive directors lavishly made movies. They were doomed. Surprisingly both K and R were funded by the same person :).

Look at business channels. Their cost of producing one program was so high, I was stunned. The new channels which have paid astronomical salaries to the ‘Anchors’ will struggle to make money – would love to see their P&L account. And to expect personal finance shows to generate TRP to justify salaries in millions of rupees is almost amusing. Frankly do not see any personal finance show being able to justify the astronomical costs. Also for a program to have repeat audiences, it has to be action oriented. In personal finance this is difficult. Want to see the P&L of ET Now, Cnbc TV18, Ndtv profit…to see whether any personal finance show CAN make money at all.

Not sure how the economy works, but to expect to get XX crores to do studio programs looks tough. If that has to be paid, ULIP will need to have 70% load AT LEAST. L O L.

No reason why a few of us should not take our video cameras out, record decent topics and put it on Youtube…any comments? Let us launch a ‘people’s channel’. After all asset allocation is asset allocation you do not need Katrina Kaif or Ranbir Kapoor – or their wannabes to tell you that, correct?

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  1. i dont understand. are you saying anchors or movie stars are overpaid?
    if so,you are incorrect. movie stars and anchors are paid according to the demand and supply of movie stars and anchors(the utopian people’s channel is not going to take off -nobody is going to queue up to see my pudgy nose and ham acting).the profitability of these channels and movies is a different point.it reflects the ability/inability of these entrepreneurs to utilize their resource(star/anchor) to their advantage.

    by comparing the costs of making a movie to the percentage of the star’s cut in it,you are invoking the fallacious marxist labor theory of value. which ofcourse is bogus and has proven to be wrong many years back.

    just because IT companies have a huge profit margin,should they be paying huge salaries to trainees?.ofcourse,not.the salaries of trainees is dependent on the demand and supply of trainees and not the final profit of the business.

  2. Sir,

    I am fully agree with you. As far as finance/stock channels concern, we don’t require so called experts who also play the role of anchor (or vice versa).

    This will be a great help if the people like you and many others who emphasize on Fundamentals rather than technical/speculations come forward and put the videos related to finance topics on the Youtube.

    (Sab channels walonki chhitti ho jaayegi 🙂 )

  3. Subra not sure if you read an article on fool.com about the new ‘hijacked’ capitalism. The shareholder has no choice of what the ‘manager’ is doing with his money. Take the case of a small investor who invests in a mutual fund. One fund manager (who is so arrogant that he NEVER has to meet the investor) takes a ‘call’ on a company. This company which gets money at a super high premium invests in Black or White or Ravan. When Ravan fails, there is no flak for the executive. At best he will not get an increment. In this pseudo capitalism there is NO FREE MARKET. ET NOW of course is an exception – Sameer Jain will rationalise salaries fast enough. He will not wait for his company to fail…

    Anyway Ayn Rand fans should appreciate changing times…some of them do not 🙂

  4. Dr Mohammed Ali Khan

    @ Pravin..
    Subra is just saying.. “Lets reduce the demand for these overdressed morons”

    @ Asoke..
    The laws of economics like the laws of Physics do not ” Change ” with time.. They remain constant as long as human nature does not fundamentally change.. Ayn Rand did not create these laws.. She just observed and commented on them.. So we Ayn Rand fans need NOT appreciate the changing times.. Its Marxists who need to appreciate that their theory was idiotic & EVIL from the first instance..

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