Strategies For Bollywood
Strategies For Bollywood
Strategies For Bollywood
A Natural Hedge
Multiple Revenue
Opportunities
Production costs
• In a Rs 40-crore Bollywood film, the
production cost would be hardly Rs 15 crore
and the rest goes for paying the cast
37%
63%
According to Associated
Chambers of Commerce and
It is estimated that Indian
Industry of India (Assocham)
domestic film industry will by
the Indian film industry
2010 be worth Rs.400 bn.
already earns 100 million U.S.
dollars in foreign exchange.
The Birth of a Star
Source: Confidential- with inputs from Mandre Productions, Govind Rai and
Rohit Jaisingh Vaid, Contilloe Films
The Cycle of Events
Digital Analog
Normal projector
UFO, Qube
prints
-Show times are
-Showtime can be
uniform
strategically planned
Producer
Distributor
Distributor
Overseas
Distributor
Sub-Distributor Sub-Distributor Sub-Distributor
North East and
North South Mumbai et al
Central
Key Facts
• The distribution and telecast rights are given for
a period of 5 years
• The success of a Bollywood is dependent on the
profit / loss incurred by a Distributor
• The promoters/ star/ directors have to carry out
marketing for the film, to safeguard their brand
identity
• Distributors carry a higher risk- Strategy:
monopolize the production and rights
• Largely distributors finance producers 50% of
the movie, hence, the 50:50 sharing
Negotiating skills of producers
Producers have good negotiating skills
The Domestic
Home video
box office
revenues.
revenues
Overseas box
Ancillary
office
revenues.
revenues.
Sources of revenue
Overseas 8% 9% 9% 9% 9% 9% 10%
Ancillary 8% 9% 9% 9% 9% 9% 10%
97%
37%
63%
The economics
• Supply side
– Growth in film industry
– Improving real estate supply
– Favorable tax exemptions
• Demand side
– Favorable demographics
– Rising income levels
– Willingness of people to spend
Industry characteristics
Seasonality
20%
30%
20%
30%
Market Share of Various Film
Industries
Share of Revenue
Hindi Telugu Tamil Others Hollywood
5%
15%
45%
15%
20%
Where does the money come from
Components of Revenue
Amount (in
Source of billions) Domestic Box office Overseas Collection
Income (2008) % Home Video Ancilliary Revnue
Domestic Box
office
Collection Rs.81.2 71% 15%
5%
Overseas
Collection Rs. 10 9%
9%
Home Video Rs.5.8 5%
Ancilliary 71%
Revnue Rs. 18 15%
Total Rs. 115 100
Hollywood Story in India
• Jurrasic Park (1993) dubbed into Hindi
followed by the hits Speed (1994) and
Dunston Check In (1995)
• 2005 : 55 Films
• 2006 : 75 Films
• At present Hollywood has 4-5% share in the
Indian Film Industry
Regional movies
• Out of 1,000 movies released in India every
year, Bollywood constitutes only 30%.
• Bigger menu
• Technology
• Investments
• Infrastructure
• Systematic
• High Entry barriers
Can Bollywood bite into the
Regional Film Industry?
• Massive size of movie markets in the South
450
400
350
300
250
200
150
100
50
0
cost of indian ticket cost US ticket
Advantages
• Revenue is more from the multiplex
• Will de-risk the industry
• Attract more corporate houses which will
make Bollywood more organized
• Much more quality jobs generated in
multiplexes
• Compete with Hollywood as we will gain more
money power
Strategy 2:
Entering into the Southern Markets
• High quality dubbed Bollywood
movies to be released in South
India