News Summary
- In Nepal, even when a film made on a budget of 3 million NPR earns a gross collection of 10 million NPR, the producer’s actual profit is roughly only 225,000 NPR.
- According to the Film Development Board, ‘Paral Ko Aago’ grossed 42.5 million NPR, ‘Ram Naam Satya’ earned 34 million NPR, and ‘Pahad’ made about 6.3 million NPR.
- New producers are continuously entering Nepal’s film industry, but many incur losses due to a lack of understanding of the industry’s realities.
When a film earns 150 million NPR, many immediately think that filmmaking must be a highly profitable venture, enough to quit all other work.
Hearing about 20 to 30 million NPR investments yielding 100 million NPR in returns excites many, leading to the belief that films can generate massive revenues.
However, the reality is quite different. Let’s analyze what happens if a film earns a gross of 10 million NPR.
First, a 13% VAT deduction applies, leaving roughly 8.7 million NPR. Then, a 5% local development tax reduces it further to about 8.2 million NPR.
If the amount is split 50–50 between theater owners and producers, the producer’s share is approximately 4.1 million NPR. After distributor deductions—either from advances or a minimum 5% commission—the producer is left with around 3.6 million NPR.
Then come additional costs such as server charges and technology fees for releasing the film in theaters. Assuming these amount to about 300,000 NPR, the producer ends up with approximately 3.3 million NPR.
If the film’s production cost was 3 million NPR, the profit is just 300,000 NPR, subject to 25% profit tax, resulting in a net profit of about 225,000 NPR for the producer.
Moreover, the producer does not receive the gross collection immediately after release; it can take from one to six months, or even longer.
Consider too the months of labor invested before and during production, interest on investment, travel expenses, food, accommodation, and other costs—these substantially increase the total expenditures.
Therefore, even when a film made at a 3 million NPR cost collects 10 million NPR gross, producers often face losses.
Let’s look at the earnings of some films released in Baisakh 2079 (April-May 2022).
According to the Film Development Board, ‘Paral Ko Aago’ collected gross revenue of 42,546,466 NPR; ‘Ram Naam Satya’ earned 34,081,691 NPR, and ‘Pahad’ collected 6,393,152 NPR. Official collections for ‘Lalibazar’ are not yet available.
Although producers know their actual investments, here we present the Board’s official annual collection figures.
The natural question arises — how much profit did producers actually make from these earnings? The answer becomes clear once the income breakdown is understood.
Globally, the film industry is considered risky, but in developed markets, producers diversify revenue streams and mitigate risks.
OTT rights, satellite, television, digital streaming, overseas distribution, brand partnerships, music rights, YouTube revenues, distribution agreements, and advance investments help producers stay financially secure.
In Nepal, such options are limited. The glamorous reports of millions earned on social media are often misleading. Except for blockbuster hits, many films fail to reach expected collections. There is a significant disparity between perceived and actual income.
Despite these challenges, film production never stops in Nepal. Many producers suffer losses; some drown in debt, others sell assets to settle loans, and some even divide partnerships to cope.
So, why are films made? Who takes these risks and why? Do producers fully understand these realities before starting, or do they find out later?
These are serious questions. If ignored, the prolonged distress of producers will hinder growth in the industry.
Films that are in progress tend to get more discussion, yet stories of failed producers rarely surface. This is why new faces keep entering the film sector.
There are primarily two types of producers in Nepal’s film industry — seasoned ones who understand the field well from years of experience, and new investors entering impulsively based on hearsay or enthusiasm without grasping the industry’s realities.
Though new producers keep joining, there is little serious discussion about their expectations and the eventual outcomes.
It is rare for a producer to quit after one or two films. Directors and writers often hype the idea that “millions can be earned from films” or claim “our friends have already profited,” thus encouraging new investors.
Those familiar with the industry say that the harsh truth should not be hidden from investors. A healthy industry requires clear communication based on facts, not false dreams.
Scriptwriter Pradeep Bhardwaj sees the influx of new producers as a timely change. “Today’s veteran producers were once newcomers,” he says. He himself left the old path to explore new opportunities in news media, where he has spent much time.
Filmmaker and director Manoj Pandit holds a different view. He considers it unfortunate that although the number of new producers is rising rapidly, serious discussions on the subject are scant.
According to him, “Producers are facing losses because many do not understand this industry, but still new ones keep coming. It is a strange situation.”
Ravindra Singh Baniya also points out that many people fail to grasp the industry’s real financial dynamics. There is a vast difference between external gross collections and actual returns. Typically, out of 100 million NPR gross, about 30 million NPR reaches the producer.
Investment in this industry is inherently risky; unlike a restaurant, where furniture can be sold if the business fails, in film industry failure leaves only a hard drive behind, Baniya explains.
If the industry were easy to profit from, top entrepreneurs would have entered openly. The chance of success is quite low, less than 5%. Winning in gambling has higher odds than succeeding in film production.
He believes new producers will continue to enter unless these harsh realities are widely understood and acknowledged.
Nepal produces around 70 to 100 films annually, but only a few achieve commercial success. According to market data, only 5 to 8 percent recover production costs; the rest incur losses.
This raises a vital question — why do producers still engage in film production despite high risk of loss?
Established producers often reinvest limited capital, but new films frequently see new faces emerging as producers. One or two blockbuster films create a misconception that the film business is lucrative, but the reality is harsh.
When a film fails, the losses are substantial—ranging between 10 to 30 million NPR, a significant amount in Nepal’s economy. Some producers never recover, others return in dire conditions.
Film investments are insecure primarily due to the lack of an organized market. Nepal has very few cinemas, and even those struggle to sustain Nepali films because of dominance by Hindi and South Indian films. Audience preferences are also rapidly changing, but Nepali filmmakers have largely failed to adapt.
Many producers enter the field driven by glamour, publicity, photos, and the lure of fame, but the film industry requires deep study, market understanding, and strategic planning. Emotional decisions often lead to risky investments.
Compared globally, Nepal’s situation is more challenging. Hollywood, Bollywood, and South Indian industries also face failures, but boast vast markets, strong distribution networks, digital platforms, and worldwide access. Risk management options exist even after failures.
In Nepal, the market is small, capital is limited, and audiences are few. Many producers lack business plans, relying instead on emotions.
As a result, many producers cannot recover after a single failure. Veteran producers are disappearing while new entrants keep coming. The gap between true earnings and losses remains undisclosed publicly, causing misconceptions.
Some allege that sensitive topics like these are not openly discussed due to personal interests and relationships.
