The recent box office returns of films such as Waar – which broke records in terms of gross returns – and Na Maloom Afraad – which has managed to continue its run in theatres two months on from its release – have given hope to film-makers and film investors that Pakistani cinema is finally on the path to attaining financial health.

Certainly, Pakistan’s film industry is in a far better economic condition now than at any time in the last 30 years. In and of itself, however, that is not saying much. Pakistan’s film industry’s descent – from over 1200 cinemas nationwide and over 100 feature films produced in a year in the early 1980s to the current numbers of less than 125 screens (of which many are non-functional) and barely two dozen feature films being produced every year – can only be termed a death spiral. The most recent trends, nevertheless, are promising.

The number of cinema screens is on the rise for the first time in decades. A building and refurbishment boom is being fueled primarily by revenues generated from Bollywood blockbusters and the immense profitability of swanky new multiplexes. And, while current revenues may not be huge in absolute terms, the fact that films such as the Salman Khan-starrer Kick and the locally produced, no-starrer Na Maloom Afraad can manage to gross in the range of 1.5 million US dollars domestically is extremely remarkable, given that these earnings are coming from basically less than 70 operating screens.

In fact, as things stands today, only 40-odd screens in the whole of Pakistan turn an actual profit. Waar, which grossed over 2.2 million US dollars on this miniscule domestic circuit, is, of course, an outlier in terms of revenue. More than anything else, its phenomenal box office success indicates the potential size of the market even with such a small number of screens.

A still from Afia Nathaniel's Dukhtar

The basic problem that the Pakistani film industry has faced for the past three decades is an economic one and it is important to understand this, particularly for those who ask why Pakistan simply does not make good films. In reductionist terms, as technology (home video, satellite TV, internet) progressed by leaps and bounds, Pakistani viewers had far greater options than going to badly maintained cinemas to watch heavily censored Hollywood fare and poor quality Pakistani films catering mainly to a rural population.

As urban viewers stopped going to cinemas, most cinemas simply shut shop and the domestic circuit declined. This, in turn, made recovery of heavy investment on films from the box office very difficult, especially since rampant piracy of DVDs and unmonitored illegal screenings on cable networks made alternative revenue streams unavailable.

When serious investors saw little chance of recovery, they became unwilling to finance films, leading to the influx of a different type of investor who had reasons other than making good films to sink his money. Budgets for films also became constrained to what was potentially recoverable in the given scenario.

In a classic chicken-and-egg scenario, the resulting poor quality of local films made viewers – now exposed to better quality cinema through DVDs, cable and internet downloads – even less likely to head for cinemas. And film-makers with creative potential drifted either towards television or advertising which offered regular work and better pay.

The turnaround came when the Pakistan government allowed Indian films in local cinemas in 2007, a long-standing demand of exhibitors (cinema owners) and cinema activist organisations such as the KaraFilm Festival. Indian cinema had been banned in Pakistan informally since 1962 and formally since 1965. It took only a few years for it to become obvious that this decision to permit the screening of Indian movies, taken in the face of great protectionist hue and cry from the small film-producing industry in Lahore, was the correct one.

The influx of cinemagoers into theatres – finally able to watch on the big screen what they were watching anyway at home – allowed cinemas to begin earning again, spurring the creation of expensive new multiplexes with state-of-the-art projection, sound and seating. Once money began flowing again and the number of screens increased, it was only natural for local film production to pick up again, despite the initial setback to old Lollywood-style productions.

Members from the team of 'Na Maloom Afraad' stand in front of the ticket counter at Atrium cinema, Karachi

Keep in mind that in 2002, Pakistani cinema’s biggest production, Jawed Sheikh’s Yeh Dil Aap Ka Huwa, was released on a total of 16 screens in Pakistan (because of exclusivity arrangements with distributors, only one or two cinemas per city would release a particular film then). Today, big-ticket films can easily be released on 45-plus screens. And this expansion will continue.

Despite the obvious trends, however, it is still too early to label the current phase as the one heralding the “revival of Pakistani cinema,” a phrase used with such alarming regularity over the past 20 years that it has lost any meaning it ever had. There are still too few screens and far too few feature film productions. In 2014, for example, only about half a dozen local films received anywhere near a mainstream nationwide release — the majority of the overall two dozen productions being low-budget Pashto films with niche audiences.

Of the ones that received mainstream releases last year, only one (Na Maloom Afraad) can be termed a genuine box office success (two other recent box office hits, Waar and Main Hoon Shahid Afridi, were both released in 2013). At best, we can term this as a transition stage which, if current trends hold and are built upon, can be a stepping stone towards better days.

It is important also to keep in mind that when we speak of the film industry, we are talking in essence about four different elements: exhibitors (cinema owners), distributors (middlemen), producers (financiers), and film-makers (cast and crew). These segments together comprise what is termed the film industry. Each one of them is in a different position within this transition stage and, while obviously interconnected, requires different incentives going forward.

Cinema owners are perhaps doing the best at the moment, since they are not only enjoying the fruits of the return of audiences to the cinemas but are in the most powerful position given the small number of screens currently available, which film-makers and distributors are vying for. As it is, exhibitors take a whopping 50 per cent of the gross earnings of a film.

Those who have invested in high-end new multiplexes are also able to command high ticket prices as well as up to 500 per cent profit on concession-stand items and extras such as 3D glasses. (Although figures are not available for earnings from concession stands and extras in Pakistan, international figures indicate that multiplexes make more from this revenue stream than ticket sales.) The greatest impetus for establishing more cinemas will obviously come from this group.

But there is still a long way to go.

Karachi premiere of Shan-starrer O21 – Phegency

According to industry analysts, who base their analysis on experiences from other countries, the real take-off point for cinema comes when the number of screens crosses 500. Consider, for example, that in the United States, there are over 40,000 cinema screens. China currently has about 25,000 screens (up from about only 3,500 in 2007), India about 12,000, United Kingdom about 4,000, Australia and South Korea over 2,000 each.

Based on current projections, Pakistan will hopefully hit about 200 operating screens by 2017 — that is, if we are lucky. Land prices being astronomically high, new multiplexes do not make sense as stand-alone projects and thus cinema development is tied in to the building of new malls.

Distributors, being middlemen, are only constrained by their judgment about the potential profitability of films and their leverage over a steady supply of film products, whatever their points of origin. They will make money off Hollywood and Bollywood blockbusters even if Pakistani films completely dry up. But, of course, they are also impacted by the general state of cinema in the country since a small circuit makes it difficult for them to be able to afford to purchase expensive films from abroad.

Pakistani producers or financiers, and consequently the film-makers whom they finance, are at the lowest end of the feeding chain and are in many ways still struggling. Obviously, they stand to gain from an expansion in the distribution circuit as well but it is only very recently that financiers have begun to be enticed back into investing in local films. The single greatest incentive for them will remain the possibility of recouping their investment on producing films.

Given the time required to take a film from the conceptual stage to the finished product, there is usually a lag of one to two years between investors seeing promise and the results of their investments becoming a visible reality. Given the current scenario with respect to the local circuit, the real fruits of this renewed interest in making films will probably be not visible before 2018, when at least two dozen films may be released on a nationwide level.

Of course, Pakistani producers and film-makers also had to contend with a long-standing neglect of film training and infrastructure. This only added to the economic problems. The quality of locally produced films was so low that the option of generating revenue from markets abroad never really existed.

The advent of cheaper and more accessible digital technology – which has allowed film-makers to bypass some of the infrastructural deficiencies such as the lack of proper processing labs within the country for celluloid films – and the setting up of a few film schools in the past decade are already making their impact felt.

A new crop of film-literate directors and technicians is slowly emerging whose production quality, at least, can allow their films to find additional markets outside Pakistan.

The ticket counter at Karachi's Nueplex cinema

This ability to release films in markets other than Pakistan may provide the one element that can speed up the pace of the nascent recovery. If Pakistani films can find a foothold in a large cinema market such as India, as well as the expatriate havens of the United Arab Emirates, United Kingdom and North America for example, the economic dynamics will change suddenly. In effect, Pakistani film-makers will then be looking not just at a small domestic circuit but a global circuit with its economies of scale.

Some recent Pakistani films – such as Zinda Bhaag, Waar, O21, Dukhtar, Na Maloom Afraad – are already beginning to explore this global circuit but these are still baby steps, primarily limited to markets in the Gulf countries. These steps need a more concerted push and certainly a greater output of regular releases from Pakistan to achieve any sort of momentum. A word of caution: the international circuit should never be considered an alternative to a healthy domestic circuit which will always remain the primary market.

Incidentally, one of the unfortunate by-products of this piddling output is that the debate about films with challenging or interesting content is subsumed by the debate about box office success. A profitable film is not necessarily a great cinematic achievement – as numerous blockbusters have repeatedly shown – and neither is a film that underperforms at the box office necessarily a bad film.

But, inevitably, because of the peculiar circumstances of the local situation where newer film-makers have been saddled with not only presenting a new creative vision but also a plan for reviving a moribund industry, Pakistani film-makers are asked why they are not making more masala fare. This burden will probably only lift when a film-maker is making one out of the 50 films being released in a year, rather than one out of merely six which is the case now.

In the near term, however, one thing is certain. Rather than attempting expensive blockbusters that are not economically feasible, film-makers who make conceptually intelligent films within limited budgets will have the advantage. Along the way they may also help establish a unique and identifiable creative voice for Pakistani cinema internationally. This transition phase will be traversed not with giant leaps but with small steps.

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