Economy Of Indian Film Industry

By
Lokesh Damani Leven D’souza Arpita Kothari Bhavin Kothari Minal Nayak Arun Ramanan Siddharth Shah Urmila Walke 05 10 19 20 30 40 50 60

Contents  Introduction to Indian Film Industry  History  Regional Film Industries • Bengali (Bangla) Film Industry Kannada Film Industry Malayalam Film Industry Marathi Film Industry Tamil Film Industry Telugu Film Industry  Indian Cinema Meets Hollywood  Nature of Finance  Future  Vote Of Thanks • • • • • .

 The Central Board of Film Certification of India cites on its website that every three months an audience as large as India's billion-strong population visits cinema halls.  Indian films are gaining increasing popularity in the rest of the world. .9 billion. especially in countries with large numbers of expatriate Indians. currently estimated at US$2.  The industry is mainly supported by the vast cinema-going Indian public.Introduction to Indian Film Industry  The Indian film industry is the largest in the world in terms of number of films.  Movie tickets in India are among the cheapest in the world  India accounts for 73% of Asia-Pacific movie admissions.

India's first talkie.first moving pictures showed in Bombay.industry became the object of considerable moral scrutiny and criticism.Talkies addressing social differences of caste. 1931 . 1951 . 1913 . Alam Ara. class and the relations between the sexes were released. Radical cultural organizations led to the formation of All India Progressive Writers Association and the Indian People's Theatre Association (IPTA) The 1950 . The 1930s and 40s .first Indian-made feature film (3700 feet long) released.       .Calcutta became the vanguard of the art cinema.A Brief History  1896 . dubbed into Hindi and Urdu. released. and was subject to severe taxation.

In the 1990s.By the beginning of the year there existed above 150 film societies all over India. 1970s . The state film finance unit (now named the National Film Development Corporation) has a major stake in the expansion of the national network. held in Bombay. national and satellite/cable television have resulted in the development of a prolonged crisis in India’s movie industry.The First International Film Festival.   The period is also notable for a more assertive Indian nationalism.     .popular cinema had shifted its social concerns towards more romantic genres. 1990s . video. and flowing of new images. 1951 . where commercial and art films are equally at risk of failing at the box office. Showed Italian works for the first time in India. 1980s – the films took a more stronger stance on the social issues with an outpouring of the social conscience. 1960s .

Regional Film Industries: Bengali (Bangla) Film Industry: The history of cinema in Bengal dates back to the 1890s. The early beginnings of the "talking film" industry go back to the early 1930's. The contribution of Bengali film industry to Indian film is quite significant. when it came to British India. West Bengal and is more elite and artistically-inclined than the usual musical cinema fare in India. Based in Tollygunge. . when the first "bioscopes" were shown in theatres in Calcutta. and to Calcutta. Its most famous film director is Satyajit Ray. who won an Oscar for lifetime achievement in cinema. an area of South Kolkata.

He had acted in over 200 movies and is a recipient of the Dadasaheb Phalke Award. Amruthadhare. Deadly Soma.Kannada Film Industry: The Cinema of Karnataka encompasses movies made in the Indian state of Karnataka. Kannada films form an important component of the Cinema of India. 35 crore at the box office. Shubam failed miserably at the box office . films like Anna Tangi. Nenapirali performed well at the box office. Most of the movies are made in the Kannada language. which grossed Rs. The year 2005 witnessed stupendous box office success for Kannada film industry. Starting with Shivarajkumar starrer Jogi. Mathā.Rajkumar. Namma Basava. An estimated four of every five released had succeeded at the box office But the beginning of the year 2006 has proven to be a disaster for Kannada film industry as promising flicks like Shree. The most popular actor in Kannada films was late Dr. with a handful of them in Konkani or Tulu.

or movies in Malayalam language. Mammooty. The Malayalam cinema of this short but beautiful period is a culmination of the malayali ethos and south Indian life. Malayalam movies are known for their artistic nature and they frequently figure in the national film awards. It is also known for being the most conservative out of the different film industries in India. Notable people include Mohanlal. and Adoor Gopalakrishnan Most critics and audiences consider the period from (late 1980s to early 1990s) as the golden age of Malayalam cinema. dealing with everyday life with a lucid narration of plot intermingling with humor and melancholy. based in Kerala. .Malayalam Film Industry: Malayalam cinema. It is characterized by detailed screenplays. Dileep. both as a form of art and as mass medium. is sometimes called 'Mollywood'. The Malayalam film industry. forms a significant component of the Cinema of India. Suresh Gopi. excellently directed by master-directors.

Tamil Film Industry: Kollywood is a name often applied to the home of the Tamil-language film industry. The name is a conflation of Kodambakkam (an area of Chennai with a high concentration of film studios and in which many people working in the industry live) and Hollywood.Marathi Film Industry: Valued at Rs 100 million. By the end of the 1930s. and mirrors the adoption of the name Bollywood by the Mumbai-based film industry. the industry was booming to the extent that the State of Madras legislature passed the pioneering 'Entertainment Tax Act 1939' with little opposition. According to industry sources. . the film industry is now doing better as compared to the past years with more and more filmmakers starting to show their inclination to experiment. almost all South Indian films were filmed there. the Marathi film industry churns out 20-25 films per year on an average. Silent movies were produced in Kollywood since 1916 and the era of talkies dawned in 1931. In the past. It is based in Chennai (formerly known as Madras) in the state of Tamil Nadu in South India.

The state also has what is claimed to be the largest film studio in the world. The first film made by a Telugu person. R.V.Telugu Film Industry The Telugu film industry is the second biggest film industry (sometimes called Tollywood) is based in Andhra Pradesh's capital city. The first big movies in Telugu were made by the Surabhi Theatres troupes. . Das. 1922). Hyderabad. located at Madras.S. was Bhishma Pratigna (The Pledge of Bhishma. constructed in 1934 by P. Ramoji Film City. The first studio for Telugu talkies was Vel Pictures. The first film made here was Sita Kalyanam. Telugu is the second largest spoken language in India. Prakash.

. and who made their names in Western independent films. A number of Indian films have been accused of plagiarizing from Hollywood Movies.Indian Cinema Meets Hollywood: Contact between Indian and Western cinemas was established in the early days of film in India itself. whose films include the trilogy Fire. they have now been funded to create films that "interpret" the Indian cinematic tradition for Westerners. Examples would be filmmakers Manoj Night Shyamalan and Jay Chandrasekhar. A similar filmmaker is Deepa Mehta of Canada. Indian cinema is also influencing the English and American musical. Some Indian immigrants (desis) have succeeded in the Western film industry purely on their own terms without showing any Indian cinematic influence.B. Mehta's American-Indian Cinema. both of which deal with the overseas Indian's experience. Earth and Water. Dadasaheb Phalke was moved to make Raja Harishchandra after watching the film Life of Christ at P. The meeting between Hollywood and India is a two-way process. Bollywood also produces box-office hit like the films Dilwale Dulhaniya Le Jayenge and Kal Ho Naa Ho. Both Chadha and Nair are of Indian origin but do not live in India.

7 million $ 27.6 Billion $1.013 3. 2002 Cost Per Film *National film production.5 Million $500.6% $47.BW estimates.6% $1. FICCI .6 Billion $51 Billion 5. Data Motion Pictures Association of America.Comparison: BOLLYWOOD 1.000 VS Films Produced* Tickets Sold Worldwide Revenues** Annual Growth Rate Avg.3 Million ** Estimates. . 2001 PWC. Production Cost Per Film Avg.3 Billion 12. Marketing HOLLYWOOD 739 2.

double the US markets and three times rest of Asia. Malayalam. Kannada. The Indian film industry as discussed above is a cluster of regional film industries. Indian film industry was conferred Industry Status in the year 2000. The total number of people attending movies is almost over 3 billion. In 2004. • Term loans for fixed assets finance. .Nature of Finance Cash flow financing for film production. • Indian Film Industry Indian film industry an integral part of the Indian socioeconomic psyche. there were 934 films certified across. and Bengali etc. Tamil. Telugu. The most popular source of entertainment in the country. Indian Film industry is the world's biggest film industry in terms of the number of movies produced and released in a year. • Cash flow financing for film distribution/exhibition in overseas markets. with Hindi accounting for 245 of them. like Hindi. • Term financing for export market development.

1 billion in 2006. with a 5. Market for Indian films abroad is now crossing the NRI lines. . the Indian film industry has an annual turnover of Rs.000) per film.4 trillion in 2006. As at the start of 2001. who would find it hard to obtain finance from the regular sources.5 % and exceeding the $1-trillion mark. This popularity gave the film entertainment business. have been financed by the NFDC. 15 million. 20 million (US $440. The global entertainment and media (E&M) industry spending saw a growth in 2001 — rising by 1. According to estimates available in January 2001. India has a National Film Development Corporation (NFDC) which finances some films. a reasonable budget film in Hindi could cost US $1. A low budget Hindi film can be made for even as low as Rs. an expected of growth of $1. The global E&M spending was expected to reach $1. 60 billion (approximately US $1. A big budget Hindi movie can cost in excess of US $30 million 'Stars' like Shah Rukh Khan and Salman Khan are paid Rs.33 billion). It employs more than 6 million people.6 % compound annual growth rate (CAGR). A few film makers.This makes it one of the most complex and fragmented national film industries in the world. most of whom are contract workers as opposed to regular employees.75 million.

00.How the industry rakes in moolah Producer: Distributors give him a minimum guarantee fee before the movie in return for film rights in a territory within the country. Generally.13. Fanna: Box office: The film as of September 2006 has collected Rs 53.000. Any overflow of revenue after recovery of the MG fee and commission is divided between them and the producer. Producers can recover up to 30 per cent of the cost of the film. The overseas collection as of September 2006 stands at Rs 28. Fanaa is the 4th biggest hit of 2006 .00. he gets 25 per cent of the collections. the split is evenly 50:50.25.642. In the US alone. pre-selling it to distributors.000 in India.290 by early 2007. in the second week the producer gets 40 per cent and the exhibitors the rest. in the third week the producer makes 30 per cent and if the movie continues into the fourth week. it had earned US $2. And spend on print and publicity on which they take a 20 per cent commission. Exhibitor: Under a new system revenue gets shared between theatre owners and distributors. Distributor: They offer an MG fee to the producer to book a territory. Yash Raj Films: Dhoom 2 : The movie had a very successful opening both in India and overseas. in the first week of a release.

Drawback: The film industry is currently losing un-estimated volumes of revenue due to competition from local cable operators who illegally beam newly released movies into the drawing rooms of their subscribers.Kabul Express: Box office :The film opened to a high response. The first day showed a 60-80% response and has been doing well in most parts of the country. .

It is likely that films would also be insured to offset possible losses for banks. thus keeping out of the world of dark financing. with steady revenue streams. Some film production companies. though this will result in production of fewer films than at present. The Film Federation of India is actively seeking to make film financing a viable proposition for banks. . the risk spreads out across a number of movies.Future: The overall entertainment industry in India is taking on professional colors and this will change the culture of the film industry too. Foreign entertainment companies. such as Mukta Arts have made public share issues. The granting of industry status to the film industry will eventually allow overboard financing of films. can do good business if they invest in Hindi and other Indian language films. Despite high risks on a per-movie basis. Stricter enforcement of copyright law will help the film industry in its fight with cable operators.

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