sm indian film indy

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INDIAN FILM INDUSTRY

PRESENTED BY:

SUNNY PRUTHI 139RICHA GHAI 134

NIDHI GUPTA 146NITIN MAKKAR 135

NEERAJ TREHON 129


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INDIAN FILM INDUSTRY Indias first feature film named King Harishchandra

was released in 1913.

Until late 1990s the industry was in the unorganizedsector.

Collapse of studio system and emergence of freelanceperformers.

Now, our industry is biggest in terms of no. of moviesproduced.

Indian movie Industry is worth US $ 3 billion with exportsof over US $ 200 million.


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VALUE CHAIN


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COST OF PRODUCTIONComponents of the cost of production include:

star cast (25 per cent)

cost of sets, shooting the film andtechnicians (35 per cent),

interest on borrowings from privatefinanciers (15 per cent)

and film processing, music recording,distribution and marketing (25 per cent).


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PRODUCTION PRE PRODUCTION INFRASTRUCTURE

an average studio floor size in India is 100 feet

by 150 feet versus the international standardof 220 feet by 350 feet.

An Indian studio is spread over 5 acres andhas one or two studio floors whereas an

international studio is spread over aminimum of 500 acres and has more than 6-10studio.


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POST PRODUCTION INFRASTRUCTURE

Outdatedequipments wereusedinitially.

Now, production facilitiesaresetusingmodernequipmentandtechnology.

EXHIBITION INFRASTRUCTURE

Few theatresdueto highentertainmenttax.

Till 1997, the concept of housing more than twoscreens in one theatre was non existent in India.

PRODUCTION


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Financing Own funds

Fundscollected fromadistributor.

Financinggapmetbyexternal funds.


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Financing

Distributors- 50%

conventional moneylenders (36-40%)

non-conventional but corporate resources, promissory note system, known as hundi

system: this is the most widely prevalent

source, and

underworld money: about 5 per cent of themovies are suspected to be financed by these

sources .


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FINANCING Trend is shifting as many producers can

see the advantages of moving from a

family business to a corporate entity.

NFDC came into picture in 1980

In 2001 Bank financing for Indian films

Insurance covers for film productionbegan in 1998 with taal.


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CorporatisationScores of film producers, financers, distributorsand associates, have now converted their

businesses into Companies under law. Somehave already raised capital from the public andare now listed at major stock exchanges, whileseveral others propose to do the same.


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INDIAN OVERSEAS MARKET

The first is technical : satellite television and the internet nowmake it possible for overseas Indians to keep in touch withtheir roots.

The second reason is economic: demand for each of theseproducts: films, music and television feed on each other.The more inroads the television channels make, the moremusic and films get popular, the more satellite television iswatched.

The third reason is convergence: Indians are as western in theirtrappings, if conservative at the core. Hence, the culturalcontext in which urban Indians and overseas Indian consumeentertainment is very similar despite the geographic distance.


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Thenonresident Indian

Bend it Beckham, Monsoon Wedding and 16December have made a profit in 2002. All were

distributed by Columbia Tristar, one of the fewdistributors that claims to have had a good year.

The potential size of the overseas market forIndian films music: 2.50 per cent of the total 400million units ( including the grey market) sold inIndia last year.

At an average of $ 2 per unit the CDs form abouthalf the overseas market that transforms into amarket of $ 20 million.


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GOVERNMENT INTERVENTION

The change in government policy over thelast couple of years has given

Films an industry status,

Access to institutional funding,

Tax-free multiplexes and

100 per cent foreign direct investment.


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INDIAN CINEMA IS GOING

DIGITAL

Entertainmentindustryisproductcentricand IT industryisservicecentric, hencetheresavastscope fortwo industriestocomplimentthegrowth ofeach other.

Scope for IT sectorto enterin:

Animation

Specialeffects Digitalcinema


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e-Entertainment Alliance

Nasscom survey : InfoTech and entertainment canwork together in presenting: a joint face to the Government, in creating world

class entertainment products, attracting venture capital funding, fostering

entrepreneurship, protecting intellectualproperty rights, addressing regulatory andprocedural issues and direct/indirect taxes that

were forbidding the Indian entertainmentindustry from competing in the global marketplace.

This alliance will result in promoting innovationcentric entrepreneurship to create substantial

wealth and jobs in society.


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KEY SUCCESS FACTORS

FUNDS (COST AND REVENUE)

STORYLINE

MARKETING

ACTORS

GOVT REGULATIONS PIRACY (ENVIRONMENTAL FACTOR)


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EMERGING TREND

FILM PRODUCTION Higher focus onreturn oncapitalandpaybackperiod

Production ofniche films withsmallerbudgets

Co-production willgainimportance

FILMS FOR TV Increasein filmproductionprojectsbymusiccompanies

Betterqualitycinemacontent ( storyline, music,cinematography, packaging)

Topactors, actressesanddirectors willhopefullymovetowardsthetrend of working on fewerbutbetterprojects

Increased focus onpackagingandmarketing ofthe film


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Entry ofglobalmajorsthroughtheir Indiansubsidiaries /alliances

Trendstowardsverticalintegration ( by filmproduction

companies) acrossthe filmvaluechainspeciallydistribution

FILM DISTRIBUTION Trendstowardscorporatisationand organisedbusiness

structures Increaseinnumber ofdistributionterritories, directly or

indirectly

Increaseinprints forinitialrelease

EMERGING TREND


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Trendstowardsverticalintegration ( bydistributioncompanies) acrossthe filmvaluechainespeciallyexhibition

Ifpiracyisnotcurbed, trendstowardssellingdistributionrights forHomeVideo andC&S TVplatform within 6months oftherelease ofthe film.

FILM EXHIBITION

Highernumber ofscreens

Rationalisationinentertainmenttaxes Moremultiplexesandacorrespondingdecreasein

singlescreencinemahalls

Highercinemaattendance

EMERGING TREND


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Corporatisation of filmexhibitionplayers

Entry ofglobalplayers

Collaborativedevelopmentactivitybetweenthe filmexhibitionplayers, retailers, propertydevelopers or food

andbeverageplayers

GENERAL ENVIRONMENT

Increasingcorporatisation Higherlevels oftransparency

Moredisciplinedenvironment

EMERGING TREND


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Organised financing ( debtas wellasequity)

Declineinpiracy

Increaseintrendstowardstakinginsurancecover Introduction ofCompletion Guarantee.

EMERGING TREND


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AREAS OF CONCERN

Thecharacterofthe Indian filmindustryhasraisedsome MajorConcerns:

Whetherthemanagers will judiciouslyemployresourcesavailableto them;

Whetherthebenefits ofcreation of wealth willbeshared withinvestorsandthe Indianeconomyat

large;and To identitynew areas ofgrowth otherthan film

production.


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Opportunities

The Indian film industry can seek mentoring from:

FICCI, who have done pioneering and extensive

work in the entertainment sector and are striving to create a single voice within the

entertainment industry.

Leveraging the TiE network in bridging the gap

between Hollywood & Bollywood and getting marketing support from the Indian

Community abroad.

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