Indian Movie Industry

INTRODUCTION

Indian Movie Industry:

The movie has immense popularity in the country with as many as more than 1500 films in various languages produced every year. The following of Indian movie by the people has reached to global levels with them reaching to parts of South Asia, Greater Middle East and some regions in Eastern Africa as well. Along with the Hollywood, Indian Movie has become a global enterprise in the early 20th century. In the early 21st century, Indian Movies (especially Bollywood) have found markets & new target audience in over 90 countries where the films are screened. Both technology and product delivery strategy has been emerged over years to identify how the content can better reach the target audience. India also ranks 1st in terms of Annual Film output (Revenue) in 2016. The total box office collections from Indian Movies have crossed 15,500 crore in 2016. This figure has been paved as one of the largest in the world. Domestic Box office collections from Bollywood movies have been raked at 3,500 crores in 2016. Bollywood is one of the largest centers of film production in the world. In terms of the number of people employed and number of films produced, Bollywood is one of the biggest film industries in the world.  In terms of Revenue generation, it contributes to 43% of the net Box Office Collections while the rest is being covered by Regional Movie Industry. The Main distributors who contributes in producing a movie includes Dharma Productions, Y-F Films, T-Series, Eros International, Phantom Films etc. These distributors & producers invest money in a movie and earn revenues from Box Office collection for a particular movie. The Investment is upon the producers discretion and depends on Film Content, Star Cast, Expected earnings etc.

In 1990s, Bollywood saw the emergence of three Biggest Stars namely Shahrukh Khan, Salman Khan, Aamir Khan who together contributed to the top 10 highest grossing Bollywood Films. They have dominated the Bollywood Industry since the last 3 decades with Shahrukh Khan emerging as the successful actor of 1990s while Aamir Khan took that crown for early 2000s.

In 2000s, Bollywood saw new inroads in terms of Production Values, Innovative story lines and Cinematography, technical advancements, Use of Special & Animation effects due to increasing demand for high quality entertainment. This was the decade when People across the world started recognizing the Bollywood content and grew prosperous with some of the Films even getting nominated for Oscars. This decade also saw rise of popular actors and stars like Hrithik Roshan, Shahid Kapoor, John Abraham, Aishwarya Rai, Priyanka Chopra, Kareena Kapoor etc.

In 2010s, The Industry saw already established actors making Big Budget movies and earning good revenues mostly from Masala Entertainment. Most stars from 2000s continued their successful run even in 2010s. Some of them even completed 15 & 25 years respectively working in this Industry. But this period saw a rise of some young actors like Ranbir Kapoor, Ranveer Singh, Varun Dhawan,Sushant Singh, Arjun Kapoor etc. The movies made during the last few years have been the centre of commercial success.

The revenue from Indian Movie Box office collections is expected to reach $3.1 billion by 2020 with a growth of CAGR 11% recorded over the last 5-6 years. The main Growth drivers for this Industry are: Increasing per capita income & growing Middle class, Demand from Tier 2 and Tier 3 cities, Diversifying into international markets, releasing the potential of digitization, Upside from ancillary revenue streams, and Upcoming use of visual effects (VFX) in movies etc.

Indian Movie Industry ‘Organised’ or ‘Disorganised’

The Indian Movie Industry has always been located under the Umbrella of India’s Informal economy. Due to the great complexity of Informal economy in India, the term ‘Disorganised’ is somewhat misleading  due to the lack of coordination required by Bollywood as an Industrial Mass Medium used either for Production or distribution of Movies. As compared to US, where the Operating Procedures and capital interests are formally integrated , the state of Bollywood is disorganized right now. In Hollywood, only some selected and trusted players control the process from production to distribution & exhibition via various digital formats and range of ancillary products whereas in India, the ‘Disorganised’ industry is characterized by existence of small & independent operators who lack the formal association with each other and don’t exploit the commonalities of cinematic culture between them.

Most of the films are sold by Independent producers to various distributors in large numbers across different regions at flat rates either on a percentage basis or as a pre-sale with a proportion of the expected box office gross collection upfront in the first 4 to 5 weeks. There is also competition amongst large number of competitors who compete for film rights at various levels. The distributors can be categorized under two levels. One, who distributes from Tier 1 Metro cities to Tier 2 cities and ultimately to the regional towns. Whereas some distributors delivers the High Value Movies in up-market districts & then to selected poorer neighborhoods. Most of the distributors pay either a fixed sum in rental to the owners of each hall or take a percentage share of the gross profits from a particular movie being released in that theatre since they don’t own any Cinema Halls.

There has been a perception in the Bollywood Industry that many productions are simply money laundering Financiers and the process of roping in any production house for a film is also easy. The production houses on the other hand whose only aim is to make profits often rely a lot on the narrow & expensive star cast system along with high interest sources of Production Finance has led to the success of movies by Mass audience. It has led to the application of One size Fits all approach.

Film Distribution Process in India

Distribution is the integral part of the Movie Business, it is the way a financier or a film producer gets back their returns.

Cost Of The Film: pre-production+ Film Production+ Post Production+ Advertisement  Expenses (Condition: 2% to 4% of poster publicity expenses will be debited from Exhibitors)

Producer: A Person who Invest for making the Films is called Producer. They invest in films under a “Production House” brand name: For an instance, the film producer “Karan Johar” owned Dharma Productions he producing films under that Brand name. A film Producer is responsible to manage all the expenses in film such as payment for the artists, technicians and managing the daily expenses.

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