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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.