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THE INDIAN FILM INDUSTRY
Films are the most popular form of entertainment. India is now the largest producer of films in the world.
Since 1931, the film industry has produced more than 67,000 films in more than 30 different languages and
dialects.
The film industry recorded a loss of Rs. 3 billion and gross revenues of Rs 39 billion have been recorded in
2002. But, it is expected to grow annually by 19 per cent to reach Rs. 93 billion by 2007. The industry
produced 1200 films in 2002, and 1,013 films in 2001, up from 855 films in 2000. While Hindi films
continued to be the largest segment in 2001 (23 per cent share), south Indian language films (Telegu, Tamil
and Malayalam) have seen a considerable growth.
Last year’s actual revenue was only Rs. 39 billion. High- profile movies from 2002 such as Devdas and Mr.
And Mrs. Iyer did not bring in as much cash as expected. The number of films made annually is expected to
fall, leading to an increase in the average revenue per movie.
Problems faced:
Shortage of cinema halls
India has around 12900 cinema screens (a UN Study). This leads to a serious shortage of screening facilities
in India. Even the existing screens aren’t technically upto the standards required. Many of them are being
shutdown or sold off. The economics for a multiplex works better. The success rate for movies has gone down
drastically since the last year. States like Rajasthan, Maharashtra, Haryana, Uttar Pradesh and Madhya
Pradesh have been given tax breaks for multiplexes. Halls with smaller capacities also are better for niche
films.
The government has in recognition of this fact, given tax breaks to multiplexes built in the rural areas and
non-metros.
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Tax structure
India has a very lop sided entertainment tax structure. Though SIMCON has recommended a maximum of
60% in each state, in states like Gujarat, it is as high as 100%.
Improvement of existing movie theatres
The cinema halls need to be renovated so that more viewers are attracted to watch films there. As per the
current market trend most hall owners don’t earn enough to be able to upgrade their theatres. The solution to
this could be flexible ticket pricing. Black marketing of tickets is a common feature in India. A system could
perhaps be introduced whereby the film industry, or the theatre owners derive this advantage. This can
possibly be achieved by introducing the concept of flexible pricing of tickets. Theatres should be allowed to
collect higher revenues for more popular movies by temporarily increasing or decreasing the ticket prices, as
the case maybe. This would generate higher revenues for the industry, which in turn would encourage them to
spend more to upgrade the standards.
Lack of adequate infrastructure for movie production There is a serious dearth of movie production facilities in India. Most of the movies are produced at shoestring
budget. Though there are adequate creative ideas, implementation is poor. The primary cause is lack of
facilities. Examples like Ramoji Rao City Studio in Hyderabad, Whistling Woods from the house of Mukta
Arts are recent examples of where the country is headed.
Financing
In terms of volume, India produces the largest number of movies in the world. But the Film industry structure
has been highly non-corporatised till date. It has generally been family run companies with no access to
institutional finance. Finance is tapped from family friends and other sources with high rate of interest (upto
40%) being charged.
With the Film industry being granted the official ‘industry status’, it has propelled companies like Mukta Arts to go in for institutional sources. Still not many Film
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companies have availed finance from these sources. This is because corporate structure in place is a pre requisite for such a venture. This means that the company has to clearly define the following:Documented scripts in place
Legally enforceable contracts with the artists and technicians
The entire time schedule documented
The producer has to make sure the filming activity is completed in time and there are no time and cost
overruns.
Companies like Hinduja TMT, which has earmarked Rs 20 crores for Film financing this year, and UTV
which made Fiza, are entering this arena while the emerging finance sources encourage corporates to invest:
These sources of finance are available only to companies and not to individuals, thus the need for
corporatisation.
CII & CRISIL are also working at developing a financing model that would enable the banks to weigh the
risks in this industry.
Gloabalisation:
Globalization of the industry can be achieved in the following ways:
Production: India has a large resource pool of talent, esp. for animation. Another area where India stands at
an advantage is providing locations for shooting. The cost advantage and the technical expertise for offer can
act as comparative advantages for India.
Market: Indian films have always found market in Singapore, Malaysia, Indonesia and Europe. Success of
films like Monsoon Wedding and international recognition of Lagaan is just some examples.
Technology: while the technological capabilities and expertise are improving, the costs are decreasing. India
can act as a hub for postproduction development of films.
The requirements to achieve them would be to improve infrastructure for institutional funding and improve
the infrastructural set up in the country. Government’s help would be required in improving the facilities in
the form of better policies and improved access to funding. Right now a bank would approve a loan for a
film in six months’ time during which a movie may be complete.
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Piracy:
Indian film industry loses about Rs.300 crores annually to piracy. While efforts are on to curb the menace, the
technological evolution is making it increasingly difficult to keep pace with the anti piracy measures.
Indian Film CDs (pirated) reach India just on or even before the official release of the movie in India. These
originate outside India, mainly in Dubai where they are sent a week before the release for the Censorship
Board’s approval. This is the point of leak and one master copy is enough for supply all across the country.
The industry is worried that while the avenues of piracy are increasing at an alarming rate and the laws are
either inadequate and where they aren’t, the problem is enforcement. The fines paid when caught are
inadequate and so is the punishment. They also cite the non-cooperation of cable operators as a major
handicap in their efforts to curb piracy.
The cable industry on the other hand finds it difficult to check it on its own. The nature of piracy in the
Entertainment industry is such that since the consumer demands the pirated product, the administration finds
it difficult to check it. The cable operators cite this reason among others as to why it is difficult for them to
control it. If one operator does not showcase a pirated movie, the consumer switches to the other. And since
there isn’t strict enforcement of the laws, there is not disincentive for anyone to stop showing such movies.
The operators claim that even the film industry is not clear as to which rights are to be given to the cable
operators and how to distinguish them from satellite rights of movies.
The need of the hour is thus a single platform where the stakeholders, policy makers and consumers’
representatives can sit across a table and discuss solutions. The enforcement of laws has to be made stricter
and where the laws are inadequate, they need to be put in place. Public campaign condemning piracy needs to
be carried out. And piracy has to be made a prohibitive activity to carry out in terms of punishment.
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The Movie IndustryMovie studios makes movies. The movie studio then relies on a third party for distribution, for most of
the marketing and, in some cases, for finance and investment. The first step from studio to market is
bridged by international sales companies. They buy the rights for a film and license it to domestic
distributors, who then oversee the final step to cinema or TV screen.
The Challenge
The range of choices made available by technology and market diversity present sales companies with
limitless opportunities for licensing. A full return on an investment is only achieved if this licensing
process is as flexible as it is thorough. A sales company cannot afford to return from a film market
only to find that a third of its library of 150 films was underexploited because the administrative task
of issuing multiple licenses was overwhelming.With this administrative hurdle cleared, the respite
from paperwork is all too brief, as royalty statements from the licensed films start to arrive. Each
statement based on a different contract, with a unique combination of territories, distribution channels
and time frames, with income offset against advances paid by the licensees. Collection societies like
those
who streamline the music industry’s royalty process simply don’t exist in the movie world.
Checking each contract, clause by clause, dollar by dollar is often an impossible task. Many movie
companies are forced to rely on random audits to check license compliancy. Domestic distributors
undertake the lion’s share of promotion and marketing – money that has to be offset against receipts –
as well as the manufacture of videos and DVDs. They will also seek out and negotiate sub-licenses to
TV networks. Month by month, receipts stream in and need to be tallied, checked and paid onwards as
royalties. While their counterparts in the record industry enjoy the relative comfort of drawing up
artists contracts on their own familiar and relatively standard terms, a domestic film distributor may be
dealing with tens, even hundreds, of sales companies with very different ideas about how and when
royalties
are payable. Some may involve advance payments triggered by events scattered
throughout the lifetime of a film’s release. In some cases it only takes the emergence of a new
distribution medium — like DVD — to topple an already complicated structure of contracts and
payables. Finally, all the players must contend with a film’s all-too-frequent changing of hands, as
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libraries and companies both domestic and international are split up, rebranded and resold.
23. Operational Risks
a) Reduction in costs of CDs/VCDs.
With fall in prices of CD/VCD players, consumers increasingly prefer to view new films on
CD/VCDs. The illegal screening of new films by cable operators has worsened the matter.
However, recent enactment of Anti-Piracy law by the Tamil Nadu Government, which can
book an offender under Goondas Act,1982 may provide some added protection against piracy
and may bring higher numbers of viewers to the theatre.
b) Competition from other segments of entertainment sector.
In recent years, new types of entertainment like amusement parks, bowling alleys, go-karting,
water sports, resorts etc. have emerged as alternative sources of entertainment and may
threaten viewer ship of films.
c) Piracy
Pirated movies represents more than half of industry off-take since it is a cheaper
alternative to the Company’s original products. This phenomenon is hurting the industry not
only in India but worldwide. Indian Industry is working closely with local law enforcement
agencies and has been successful in organizing many raids and seizures. The Government
Authorities are also increasingly becoming conscious about this menace. Recently, the State
Government of Tamil Nadu has covered such piracy under the Goondas Act, 1982 acting as
effective deterrent to the pirated products. Notwithstanding this, the consumers have become
aware of the hazards using such pirated products.
d) Competition from developer of similar technology for webcasting
Company is dependent on the technology developed and owned by Drushya Entertainment
Broadcast Streams Limited (Drushya) for webcasting of films. Any development adversely
affecting its technology and its rights may also adversely affect future business of the
Company.
Management would keep its options open for a tie up with a superior technology developer in
such an eventuality
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CURRENT SCENARIO OF FILM INDUSTRY. Film entertainment is the most popular form of entertainment and it is this undiminished passion through
the decades that has driven India to become the largest producer of films in the world. Since 1931, when
talkies were introduced in the country, the film industry has produced more than 67,000 films in more than 30
different languages and dialects.
The film industry grossed a turnover of Rs 3,900 crore (Rs 39 billion) in 2002. The current worth of the
industry is pegged at Rs 4,500 crore. A market survey conducted in march by accounting firm Ernst and
Young has predicted that the film industry is expected to grow at the rate of 18 per cent annually to gross Rs
10,000 crore in the next four years. The Indian film industry is the largest in the world in terms of number of
films produced and also in the number of tickets sold.The industry produced 1200 films in 2002, and 1,013
films in 2001, up from 855 films in 2000. Bollywood’s annual ticket sales world wide are 3.8 billion as
compared to Hollywood 2.8 billion. But Hollywood's revenue is much higher because ticket rates in india are
among the lowest in the world. While Hindi films continued to be the largest segment in 2001 (23 per cent
share), south Indian language films (Telegu, Tamil and Malyalam) have seen growth in their shares. Times of India
India’s movie industry is a great sector for foreign investment by corporatised entertainment companies.
Though risks are high on a per-movie basis, the risk spreads out across a number of films. However, the
domestic film-making industry, despite its profligacy, is yet to acquire the character of professionalism on a
large scale.
According to the FICCI report on the Indian Entertainment Industry for 2002, the Indian film industry
employs more than 6 million people, most of whom are contract workers as opposed to regular employees.
This statistics cannot however be used to calculate the movie industry’s share in the GDP or employment
generation. This is because a vast proportion of the turnover takes place outside the legal economy.
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SIZE OF THE INDUSTRY A FICCI report 2002 on the Indian Entertainment Industry prepared by Arthur Andersen India Ltd.
states that it is difficult to accurately determine the size of the Indian film industry because unlike in the
developed economies such as the U.S. and U.K., costs and revenues for films in India are not monitored by
any nodal agency. Therefore, the size of the industry has been estimated using two different approaches –
estimation of total costs and estimation of total revenues.
Cost and Revenue figures for the film industry for 2002
Average
Number of
Movies
Total
Gross
Value
INR
Billion
Less: Theatre
Share –
distribution
Commission
INR billion
Revenues
INR
Total
Costs
INR
Hindi
mainstream75 16.5 6.4 10.1 12.8
Cross-over
Hindi15 0.9 0.4 0.5 0.4
Foreign
movies15 0.8 0.4 0.4 NA
Malayalam 93 3.7 1.8 1.9 2.3
Tamil
mainstream84 5.9 2.8 3.1 3.3
Telegu
mainstream74 5.9 2.8 3.1 3.3
Bengali 50 0.5 0.2 0.3 0.3
Other Films 150 0.9 0.4 0.5 0.5
Others 640 3.2 1.5 1.7 1.6
*US $ 1 = INR (Indian Rupees 48)
(Source: KPMG and FICCI Report – Indian Entertainment Sector in the Spotlight.)
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COST-BASED APPROACH
This comprises artists’ remuneration, production expenses, technicians expenses, marketing expenses, studio
charges, and other fixed costs.
REVENUES BASED APPROACH
The revenue models of Indian film makers have undergone a fundamental shift in the future with a
higher probability of exploiting alternate revenue streams as opposed to relying on domestic theatre
viewership revenue stream. Some of the new revenue possibilitie are overseas theatre viewership, home video
segment, satellite rights, music rights and in-cinema advertising amongst others.
The Indian films can be sold for fewer territories than a typical US film. While the domestic theatrical
rights can be sold for five to ten different sub-territories, for a fixed time period, the overseas, music, and
C&S TV rights are usually sold to a single distributor respectively. Unlike the U.S. where home video
distribution contributes 32 per cent of the total revenue, an Indian
film generates negligible revenue from this source because of the unorganised rental/ state market and piracy.
Overseas Rights
Overseas rights include overseas theatrical rights as well as overseas video and television rights, which
are presently sold by film producers as a package to overseas distributors. The last few years have seen Indian
movies gain immense popularity overseas. The major export destinations continue to be the U.S.A., Canada,
and the U.K., countries such as Japan, South Africa, Mauritius, Australia, New Zealand and the Middle East
are fast becoming important export markets for Indian films.
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Music Rights
The music industry whose fortunes are closely interlinked with the film industry is likely to grow at
approximately Rs 16.4 billion by 2007. As per industry sources, sale of music rights contributed Rs 1.5 billion
to film industry revenues. Music rights include the domestic and international music rights of a film, which
are sold by the film producer exclusively to music companies. As new film music contributes more than 4 per
cent of the music industry revenues, music companies compete to procure the music rights of new films from
reputed production houses.
Cost of Music rights of some films
Music Company ProducerCost
(Rs mn)Films
Sa Re Ga Ma Yash Chopra 15
For 3 films - Saathiyan,
Mere Yaar Ki Shaadi hai,
Mujhse Dosti Karoge
Tips Mukta Arts 85 Yaadein
Sony
Karan Johar
Aamir Khan
Dreamz
Unlimited
120
60
60
Kabhie Khushi Kabhie Gham
Lagaan
Asoka
UniversalSanjay Leela
Bhansali120 Devdas
(Source: FICCI Report 2002 - Indian Entertainment Industry)
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Telecasting and video rights
In the near future, the home entertainment segment, broadcast TV, DVD and VCD is expected to
increase its share, even as multiplexes emerge as a strong distribution platform. The share of satellite rights in
the consolidated revenue pie has grown from 4 per cent to 14 per cent between 1999-2002. Even channels
have started a new trend by acquiring and broadcasting new titles at exorbitant prices, within 3 to 4 months of
their release. As telecasting blockbuster films is an effective way of driving up viewership, there is a demand
for these channels to acquire television rights of hit films.
Corporate Sponsorships and Merchandising:
Corporates have also started marketing their products through films. And in exchange film makers get
additional revenue in the form of Corporate Sponsorships. For example, Mukta Arts had earned Rs 35 million
from Coke, Pass Pass and Hero Cycles for product endorsements in Yaadein. Today revenues are also
generated from the sale of Internet rights and merchandising. FICCI Report 2002- Indian Entertainment Industry
Revenue Break up segment wise(Rs. bn)
Domestic theatrical sales 36.00
Overseas theatrical rights 5.25
Music rights 1.50
Telecasting and video rights 2.00
Corporate Sponsorship/ Merchandising 0.10
TOTAL 44.85
Source: FICCI Report 2002 - Indian Entertainment Industry
Source: FICCI Report 2002 - Indian Entertainment Industry
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TYPE OF FILMS.
REGIONAL FILMS
According to the Economic Times Entertainment Report 2001-2002 after Hindi films, the Telegu film
industry is perhaps the biggest, followed by the Tamil film industry in terms of revenue generation, though in
number of films released, Tamil outranks Telegu. Together, they are called the “Tollywood” film industry.
What sets this segment apart from the rest of the industry is its high degree of discipline. The average time for
making these films is 4-9 months.
The producers and directors, along with the artistes do a lot of homework before making a film. The
entire script of the film is usually ready before shooting begins and the artistes know their roles clearly. Since
the artistes are usually involved in filmmaking, they give continuous dates to the producers. As a result, none
of the South-based artistes take up more than 2 films a year, as opposed to many Hindi artistes who make 4-6
films in a year.
One more peculiarity of the Tamil and Telegu films is the increasing proportion of integration in the
industry. Ramoji Rao owns a studio and a post-production facilities in Hyderabad. Many top production
houses in the South are owned by artistes. Thus, unlike the Hindi film industry, in A category films, the
artistes have more clout and are involved in the entire process of film making. These artistes also have a
substantial control on the script. Artistes like Rajnikant also control the theatres, albeit indirectly. The Tamil
and Telegu industry is more integrated than the Hindi industry in many ways, with fewer players and the top
players controlling the industry both in terms of value and volumes. In this respect the Tamil and Telegu film
industry is similar to international film production houses.
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One major difference between the Hindi and South based films is the extent of star worship. Films are
classified under the various categories mainly based on the star cast. For example, in Telegu films in which
famous actors like a Chiranjeevi or Nagarjuna or Venkatesh or Balakrishna or Alu Arvind star would be rated
as A category, irrespective of the director and the film producer. The other top stars are Mohan Babu, Pavan
Kalyal and Mahesh Babu. Then there are a lot of other actors like Jagapati Babu, Srikanth, Prakash Raj and
Naveen, who are not as big and do one to two good films in a year. These may be rated as B films.
Amongst the banners, Suresh Productions, run by D. Rama Naidu and his son Suresh is one of the
most respected. This production house has done more than 100 films for which it has entered the Guiness
Book of World Records. The other main production houses are Usha Kiran Movies of Ramoji Rao, Anjana
Productions of Chiranjeevi, Geeta Art Films of Alu Arvind, Annapurna Studio Private Ltd of Nagarjuna and
his father – the legend and Nageshwar Rao, Padmalaya Production of Mahesh Babu and his father Krishna
and Laxmi Prasanna Productions of Mohan Babu.
In the South based film industry in general and the Telegu film based industry in particular, the
production houses are mainly owned by the top stars, who do at least one to two films for their own
production houses in a year. This trend is slowly entering the Hindi film industry too. There are star directors
like Raghavendra Rao, S.V. Krishan Reddy and B. Gopal, whose films are A class. Finally, there are a
number of independent films producers like C. Ashwin Dutt and Subhiram Reddy who make big budget A
grade movies.
In Tamil films, Rajnikant has a special category of his own. He falls perhaps in the super A category.
Rajnikant produces his own films. He works on the principle of selling a film at areasonable profit so that
everybody involved in the movie makes a winning. His films usually carry the names of 4-5 producers, who
are mainly needy people. His film “Padiaappa” did a business of Rs 320-350 million. The entire film was
made for Rs 60 million and was sold for close to RS 250 million. Of the film profits, he usually reserves 35-
40 per cent for charity. The rest goes towards his fee for the film. With close to Rs 100 million per film, he is
one of the highest paid actors in the country.
The other major banners in Tamil films are Supergood Films, which makes movies under Oscar
Movies Banner, Mani Ratnam who makes movies under Madras Talkies Banner and Kamala Haasan’s home
production. Shankar, who was a director till recently is the most sought after and number one director in
Tamil films.
Another aspect of the Telegu and Tamil films is the large inter-lingual market. Films in either of the
languages usually get dubbed in the other language.
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OTHER REGIONAL LANGUAGE FILM PRODUCTION
The other regional languages have not made a substantial dent in the market, though they collectively
total close to Rs 2 billion to Rs 3 billion. These films are similar to B and C class films in Hindi, Telegu or
Tamil languages, though their subject might be more social and their appeal more universal. The reason for
such low budget films is the low cost of artistes and technicians. These films do not have special effects and
graphics, they usually use stock music, they have very few songs and hardly any outdoor shoots. Moreover,
these films cannot afford to have very high costs as their target audience is only one or two states and they
rarely have an overseas market. However, some Punjabi films like “Shaheed Udham Singh” and “Guru
Gobind Singh” have done reasonably well internationally, but these are exceptions.
In terms of value, among the regional languages, the order is Kannada, Malyalam, Bengali, Gujarati,
Marathi, Punjabi, Oriya and others. Kannaada and Malyalam films have a market in Middle East countries
and the USA where a substantial population from the respective regions resides. Most of these films have
been made at very low budgets and in most cases all these films have one or two artistes, who act in each of
the films. These artistes have a huge public
following and their films usually get a very good reception and make money.
In Bengali films, Devyank Arts owned by Dilip Karkaria is a renowned production house having
produced 8-10 films in the last 4-5 years. All these films have cross-border appeal and have been dubbed in
Bangladeshi Bengali. The biggest actor in Bangla films is Prasenjit, son of Biswajeet, an icon of Hindi films
in the yesteryears. Similarly, in Gujarati, Mahesh and Naresh Kanodia and Upendra Trivedi are popular
artistes, while Govindbhai Patel is a well known producer. Unlike Hindi, Tamil and Telegu films, the regional
film industry is mainly dominated by one or two artistes and production house, who make the bulk of the
films. The Indo-Italian Chamber of Commerce and Industry
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BRIEF HISTORY OF INDIAN FILM INDUSTRY
The Beginnings
In 1886 the Lumiere Brothers Cinematographe unveiled six soundless short films at Bombay's Watson's
Hotel. Soon after, Hiralal Sen and H.S. Bhatavdekar started making
films in Calcutta and Bombay, respectively. Like Lumiere Brothers
Bhatavdekar made India's first actuality films in 1899. Tough there
were efforts at filming stage plays earlier India's first feature film Raja
Harishchandra was made in 1913 by Dadasaheb Phalke who is known
as the Father of Indian Cinema. This was a silent movie.By 1920 there
was a regular industry bringing out films starting with 27 per year and
reaching 207 films in 1931.
Advent of Sound
By the time of the First World War, and the phenomenal expansion of Hollywood, 85% of feature films
shown in India were American. But the introduction of sound made an immediate difference. In 1931, India's
first talkie, Alam Ara, was released, dubbed into Hindi and
Urdu. As the talkies emerged over the next decade, so too did a
new series of issues. The most prominent of these, of course,
was language, and language markets; alongside, there are
considerations of regional identity, of the different places
that separately and together make up India. Many films of the
time were produced both in the regional language (Bengali,
Marathi), and in Hindi, so that they could be oriented to the larger Hindi-speaking market. The Indian public
quite naturally preferred to see films made in their own language and the more songs they had the better. In
those days, the films made had upto 40 songs.
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The 1950s
By the start of the 1950s, Calcutta became the vanguard of the art
cinema, with the emergence of the film society movement at the end of
the 1940s and Satyajit Ray's Pather Panchali/Song of the Road,
produced with West Bengal state government support in 1955.
International recognition came with Satyajit Ray's Pather Panchali
in 1955. Satyajit Ray is considered as one of the greatest directors
of all times. Post-independence, despite a relatively sympathetic government enquiry in 1951, the industry
became the object of considerable moral scrutiny and criticism, and was subject to severe taxation. A covert
consensus emerged between proponents of art cinema and the state, all focussing on the imperative to create a
"better" cinema. The Film and Television Institute of India was established at Pune in 1959 to develop
technical skills for an industry seen to be lacking in this field. However, active support for parallel cinema, as
it came to be called, only really took off at the end of the 1960s, under the aegis of the government's Film
Finance Corporation, set up in 1961 to support new film-makers.
Ironically, this pressure and vocal criticism occurred at a time when arguably some of the most interesting
work in popular cinema was being produced. Radical cultural organizations, loosely associated with the
Indian Communist Party, had organized themselves as the All India Progressive Writers Association and the
Indian People's Theatre Association (IPTA). The latter had produced Dharti ke Lal/Sons of the Soil (KA
Abbas; 1943), and its impact on the industry can be seen in the work of radical writers such as Abbas, lyricists
such as Sahir Ludhianvi, and directors such as Bimal Roy and Zia Sarhady.
In addition, directors such as Raj Kapoor, Guru Dutt and Mehboob Khan, while not directly involved with
IPTA, created films that reflected a passionate concern for questions of social justice. Largely studio-based,
the films of this era nevertheless incorporated vivid stylistic experimentation, influenced by international
currents in film-making. Such effects are evident in Awara/The Vagabond (Raj Kapoor, 1951, script by KA
Abbas), Awaaz/The Call (Zia Sarhady; 1956) and Pyaasa/Craving (Guru Dutt; 1957).
The First International Film Festival, held in Bombay in 1951, showed Italian works for the first time in India.
The influence of Neorealism can be seen in films such as Do Bigha Zamin/Two Measures of Land (Bimal
Roy, 1953), a portrait of father and son eking out a living in Calcutta that strongly echoes the narrative of
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Vittorio de Sica's Bicycle Thief (1948). Mehboob Khan's Andaz/Style (1949), an upperclass love triangle
founded on a tragic misunderstanding, draws on codes of psychological representation - hallucinations and
dreams that feature strongly in 1940s Hollywood melodrama. Mehboob's tendency to make a visual spectacle
of his material, and his involvement with populist themes and issues make him a good example of popular
cinema of the time.
The Indian Popular Cinema and the Superstars
During the 1960s, popular cinema had shifted its social concerns towards more romantic genres, showcasing
such new stars as Shammi Kapoor - a kind of Indian Elvis - and later, Rajesh Khanna, a soft, romantic hero.
The period is also notable for a more assertive Indian nationalism. Following the Indo-Pakistan wars of 1962
and 1965, the Indian officer came to be a rallying point for the national imagination in films such as
Sangam/Meeting of Hearts (Raj Kapoor, 1964) and Aradhana/Adoration (Shakti Samanta; 1969).
However, the political and economic upheaval of the following decade saw a return to social questions across
the board, in both the art and popular cinemas. The accepted turning point in the popular film was the angry,
violent Zanjeer/The Chain (Prakash Mehra; 1973), which fed into the anxieties and frustrations generated by
the quickening but lopsided pace of industrialization and urbanization. Establishing Amitabh Bachchan as the
biggest star of the next
decade, its policeman hero is ousted from service through a conspiracy, and takes the
law into his own hands to render justice and to avenge his deceased parents.
The considerable political turmoil of the next few years, including the railway strike
of 1974 and the Nav Nirman movement led by JP Narayan in Bihar and Gujarat,
ultimately led to the declaration of Indira Gandhi's Emergency in 1975. It was as if the state and the people
had split apart. As the cities grew, so did the audiences. The popular cinema generated an ambiguous figure to
express this alienation. At the level of images, there was a greater investment in the stresses of everyday life
and, unlike the 1950s, in location shooting. In Zanjeer, the casual killing of a witness on Bombay's commuter
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trains conjures up the perils of life in the metropolis. This is echoed in images of the dockyard, taxi-rank,
railtrack and construction site in Deewar/The Wall (Yash Chopra; 1975), also starring Amitabh Bachchan.
The recurrent narrative of these films, of protagonists uprooted from small town and rural families to the
perils of the city, is shared by the street children researched by professional sociologists in Mira Nair's Salaam
Bombay (1988). The Bombay films' very excesses, their grand gestures, and the priority given to emotion and
excitement may more truly reflect the dominant rhythms of urban life in India. At the level of plot and
character, however, the Bombay films simultaneously simplify and collapse our sense of India, reducing the
enormous variety of identity - social, regional, ethnic and religious - that makes up Indian society. Where
these identities appear, they do so as caricatures and objects of fun.
The Art Cinema of the 80s
To counter this, the art cinema of the 1980s diversified from its Bengali moorings of the earlier period under
the aegis of the Film Finance Corporation. Works by Shyam Benegal, Gautam Ghose, Saeed Mirza, BV
Karanth, Girish Kasaravaili, Mrinal Sen, MS Sathyu, Ray, and Kundan Shah, among
others, actively addressed questions of social injustice: problems of landlord
exploitation, bonded labour, untouchability, urban power, corruption and criminal
extortion, the oppression of women, and political manipulation. Ghatak in particular
had addressed many of these issues earlier, but never had there been such an
outpouring of the social conscience, nor such a flowing of new images - of regional
landscapes, cultures, and social structures. Many of the films may seem didactic and
uncomplex, undercutting the attention to form that had marked the earlier period - but
not all. Benegal's first two films indicate an unusual concern with the psychology of domination and
subordination. Ankur/The Seedling (1974), starring Shabana Azmi, is particularly striking not only for this but
also for the open, fluid way it captures the countryside. Among Kannada directors, working in south India,
Kasaravalli in Ghattashradha (1981) effected an intimate vision of the oppression of widows through the
view of a child. And special mention must be made of Kundan Shah's Jaane Bhi Do Yaaron/Let Sleeping
Dogs Lie (1984), a wonderful exercise in farce and slapstick that is also a brilliant portrait of Bombay.
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The South
The most notable of the directors who speak specifically about their own cultures, and about the possibilities
of change, are Adoor Gopalakrishnan and Aravindan from Kerala. A key to their productivity was the overall
development of film culture in Kerala, India's most literate state. In his films Gopalakrishnan transformed the
lush countryside, busy towns and animated culture of Kerala into a strange, dissociated place, fraught with
communicative gaps, menacing, inexplicable characters, and an overall sense of the impenetrable. Subjects
range from the mounting tragedies that beset a young couple in the city (Swayamvaram/One's Own Choice;
1972), and the effete authoritarianism of a declining feudal landlord (Elippathayam/The Rat-Trap; 1984), to
the mysterious spiritual decline of a popular communist activist (Mukha Mukham/Face to Face; 1987).
The late Aravindan, sometime cartoonist and employee of the Kerala Rubber Board, had something of the
mystic in him, but went through a range of styles, including a cinemaverite approach, as in Thampu/The
Circus Tent (1978), in which circus performers speak direct to the camera. His episode from the Ramayana,
Kanchana Sita/Golden Sita, places the action against the grain of the high Hindu tradition by situating it
among tribes in the verdant landscape of the Kerala forests. At his best, his narrative style refuses a didactic
approach, generating a whimsical sense of how destinies are shaped.
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Full circle
The 90's saw the
Indian Cinema come to a full circle with Hum Aapke Hain Kaun turning out to be the biggest grosser ever.
Indian cinema has come a long way from the shaky flickering images and grating noises and sounds to a very
sophisticated state-of-the-art technology for creation and projection of image and sound track. The film
industry has grown multi-dimensionally with unique blend of commerce, art, craft, star glamour, social
communication, literary adjuncts, artistic expression, performing arts, folk forms and above all a wide-ranging
and abiding appeal to the heart, the mind and the conscience. www.meadev.nic.in/earthquake/culture/films/intro.htm
Entertainment
The last decade has seen the Indian entertainment industry grow exponentially. The key drivers for
this have been technology and the government’s recognition of the importance of the sector. The
stage is now set for further evolution with a trend towards convergence, adding a new dimension to
entertainment. The industry is expected to grow at a CAGR of 27 per cent.
• Revenues are projected to increase to US$ 10 billion in 2005 from 3 billion in 2002.
India is one of the most media-exposed countries when compared to its Asian counterparts due to its
size and consequently a large consumer base.
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• The Indian film industry is largest in the world in terms of number of movies produced. India
produces 800-900 movies every year in 52 languages and provides direct and indirect
employment to 5 million people.
• #9; The film Sector is one of the oldest industry in India. The first commercially successful
film was made in 1913. The exports of Indian films in the last few years have seen a dramatic
upward swing with the export earning for the year 2001-02 being in the region of Rs. 9 billion.
• The Government of India has accorded industry status to the film industry and FIs are
formulating funding mechanisms for financing films. Recently some major film projects have
received funding from FIs and banks.
• Many large production houses are embracing a corporate structure and there is a trend
towards adopting a professional approach in producing and marketing films in India and
overseas.
Television
• Television is a leading entertainment medium accounting for the largest slice of the urban
India’s media consumption pie (72% of total media consumption).
• Television software is also expected to grow in India as technology is affordable and
manpower cost is low.
• The Government of India has liberalised the uplinking policy to allow India to develop as a
centre for broadcasting.
• There has been a reduction in the rate of basic custom duties on the import of certain
specified equipment for setting up an earth station for broadcasting.
Opportunities
Opportunities for this sector exist across multiple categories of the entertainment industry.
• Film distribution is turning out to be a lucrative business.
• Television software content development is expected to experience healthy growth in the
coming years.
• The radio industry is witnessing several private FM channels being launched in many Indian
cities.
Indian capital market have rewarded Foreign Institutional Investors (FIIs) with attractive valuations and
increasing returns. Stock Exchange – the Mumbai Stock Exchange continues to be the premier exchange in
the country with an increase in market capitalization from US$ 40 billion in 1990-91 to US$ 203 billion in
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1999-2000. The stock exchange has about 6,000 listed companies and an average daily volume of about a
billion dollars
Entertainment - The last decade has seen the Indian entertainment industry grow exponentially. The industry
is expected to grow at 27% annually. Revenues are projected to increase to US$ 10 billion in 2005 from 3
billion in 2002. India is one of the most media-exposed countries when compared to its Asian counterparts
due to its size and consequently a large consumer base.
Entertainment Industry
The words that come to our mind when we think of entertainment are Pleasure, Fun and Relaxation.
Entertainment exists from the time man exists. He always found some way or the other to entertain himself.
Though the methods and sources of entertainment differed the essence remained the same that was to get
pleasure. We would say a lot has changed over the years in other words everything is getting more and more
modernized. But, yet the truth is that the basic mode of entertainment yet remains the same. Earlier the scope
of entertainment was narrower unlike today. Now services are available to entertain us in other words it is
commercialized.
All, young & old, rich & poor, man & woman, require entertainment. Every individual needs some
sort of entertainment in his life. Entertainment provides some sort of a change from the normal course of life.
Modern age, man has been found facing a number of problems. They are supposed to follow the busy
schedule to earn more and at the same time also required to be a high performer. Management of a family is
also important. This necessitates entertainment. The changes in the taste and temperament in the masses,
increasing disposable income, the changing lifestyle due to corporate changes has paved the way for the
development of healthy entertainment facilities. Opening of new air-conditioned cinema halls, open-air
theatres, drama centers, music centers, pub, club, art and handicraft and painting centers have been found
gaining popularity. Many entrepreneurs have been seen promoting entertainment services. By doing this, they
not only entertain the masses but also inculcate awareness, promote education, and develop knowledge. The
focus today is on development of entertainment services in a right fashion. In the Indian perspective, where
majority of the population is illiterate, it is the responsibility of the entertainment services to inculcate
awareness even in the rural areas of the country.
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The entertainment industry in India has outperformed the economy and is one of the fastest growing
sectors in India. However, it registered a moderate growth of over 15 per cent in 2003. The FICCI-Ernst and
Young Study titled "The Indian Entertainment Industry: Emerging Trends and Opportunities", scheduled to be
unveiled during FICCI-FRAMES 2004 - the Global Convention on the Business of Entertainment on 15th of
this month at Mumbai, has projected that the industry will grow from Rs.19,200 crores in 2003 to Rs. 42,300
crores in 2008, at a compounded annual growth rate of 17 per cent.
(Source: Ernst and Young Study)
Zee Telefilms has secured top position in Indian entertainment industry with a market cap of Rs 4,739
crore and no one comes anywhere near. Media Matrix Worldwide, at No 2, is way behind with Rs 406 crore.
Top 5 Companies By Market Cap
Sector
RankCompany Market Cap
(Rs Crore)1 Zee Telefilms 4,739
2 MediaMatrix Worldwide 406
3 Sahara India Mass Communications 387
4 Balaji Telefilms 357
5 Pentamedia Graphics
(Source: Economictimes.com)
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Top 5 Media Companies By Net Profit
Sector
RankCompany Net Profit (Rs Crore)
1 Zee Telefilms 87
2 Balaji Telefilms 57
3 Padmalaya Telefilms 17
4 Adlabs Films 17
5 ETC Networks 14
(Source: Economictimes.com)
The role of the cinema in image building
The big screen, says Tareque Masud, holds immense possibilities for a nation. He presents his thoughts
on the issue.
Film is the youngest art form, but it is also the most evolved and complex. All art forms are essentially
reflections of life, but cinema reproduces life or reality more directly. It almost creates an illusion of life itself.
Cinema is also distinct at another level from other art forms. The concept of uniqueness and originality is the
core of value in most art forms. But film, by its very nature, is reproduced. It is replicated in great numbers
for a mass audience, so that many people in many different places can view it. This is the most decisive
departure of this new art form. As a matter of fact, film, and the audio-visual media in general, has
revolutionised the whole concept of art. It pervades every aspect of our lives. It is not only limited to cinema
halls, it also comes via satellite into our own living rooms. It is ubiquitous, and the most powerful art form of
today.
With its capacity to mirror life so literally, film reflects the social, political and cultural aspects of life
very powerfully. It also exerts its influence on society more directly. This influence not only has the power to
reveal truth, but also to hide it. It can expose people to harsh realities and truths, but it can also provide an
escape from the harshness of reality into a fantasy world. This is how cinema has come to be exploited as a
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major vehicle of entertainment, as well as a full fledged commercial industry for a mass market. Since society
is reflected in cinema, the nature of cinema keeps changing. But cinema also has an impact on society. Proper
use of the medium of film can fight the insidiousness and mindless propaganda of the mass media. On the
other hand, violence in film can have a demonstrative effect and cause violence in society. Thus it can play a
destructive as well as a constructive social role. The language of cinema can be used for artistic and aesthetic
ends as well as for information and propaganda.
Film can play and has always played a critical role in shaping a national sense of purpose and identity. But
how much of this potential has been harnessed? How much has it been used as a vehicle for nation building
in the most positive sense? Cinema also can be a great vehicle to preserve national memory. This memory
can in turn be projected into the future for generations yet to come. It can build a bridge between past and
future, old and new. It can bridge the divide between the lower strata of society and the upper strata, between
communities and religions. It can serve as a channel for dialogue and greater understanding. It can bring out
the inner beauty and truth of the country. But there is at the same time a danger of idealising and over-using
this medium to the extent that it loses its impact and credibility. For example, you can make a beautiful
viewcard to promote national tourism, but this viewcard will be totally lacking in credibility if it is not
authentic and close to reality. It is important not to fall into the trap of making crude attempts at
beautification, because it can be counterproductive. Film should rather provide a critical insight and
appreciation of our own society through which credible beauty can be born.
Satyajit Ray’s Pather Panchali is a good example of the positive role that authentic cinema can play in a
nation’s history. When Ray’s film got an award at Cannes in the mid-1950’s, some of the big Bollywood
stars dismissed this masterpiece as earning prestige at the expense of a negative portrayal of India as a poor
country. But how short-sighted they were! And fortunately how unrealistic their concerns also were! Pather
Panchali not only earned India prestige and honour in 1955, but it is continuing, over half a century later, to
earn appreciation of the country and contributing to its positive image. It is also continuing to bring revenue
from all over the world, as it is being screened and seen almost every month in some part of the world. After
Pather Panchali got an award at Cannes, it did not run well theatrically, even in its home town Kolkata. In
terms of immediate returns, it could be considered commercially unsuccessful. The most commercially
successful film of that same year possibly ran for months in many halls, but in the long term this film was not
more commercially successful than Pather Panchali. Rather, it was Pather Panchali that continued to be
25
shown over the years, and eventually brought more money, as well as honour, to the nation. Sometimes
apparently non-commercial “art” films can be more commercial than so-called commercial cinema. Since
Pather Panchali was completed with funds received from the West Bengal government in exchange for the
ownership rights, it was eventually the government that was able to appropriate not only the prestige but the
profit of this great film.
In the 21st century, when globalization is threatening to eclipse all local identities and penetrating into even
the remotest regions of the planet, it is more important than ever that we project our own image of the nation.
This should be an image dictated on our own terms, rooted in our own soil, giving a more complex and in-
depth impression unlike the oversimplified and black and white portrayals seen in the global mass media. The
difficult part is that we cannot counter these over-simplified portrayals by projecting an equally simplified
version of our own in reaction. You must fight lies and deception with truth and honesty. But we too often
are more concerned, even in our own personal life, with what other people think of us. What we think of our
own selves is more important. Cinema should be used to reassert and reinforce our sense of self-respect.
Therefore, while we think that we are suffering from a negative image projected from outside, possibly we are
ignoring the fact that we suffer most from our own negative self-image. We have to overcome this problem,
and remind ourselves of the inner beauty and strength of our people. The major problem lies with the urban
middle class intelligentsia, who need to be reminded of the wisdom and beauty that lies at the heart of our
indigenous rural culture. But it is also this same class that carries the burden of having to transmit the image
of ourselves to the outside world.
An example of the way in which cinema can be used effectively to reverse a negative stereotype of national
image is that of Iran. In Iran, the government is actively supporting the production and distribution of high
quality Iranian films, which are shown and appreciated at film festivals and in cinema halls across the globe.
Many of these films are critical of contemporary socio-political conditions in Iran, but they are still promoted
because they give a more complex and credible picture of the country. By promoting these films, the Iranian
government has won appreciation for its liberalism. At the same time, Iranian cinema has proven to be the
most powerful and effective means of countering the negative image of Iran prevailing in the West. The
filmmakers themselves, with the full cooperation of the State, have risen to this challenge and have projected
to the world a different image of the beauty of Iranian people and their culture.
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In our own modest way, from Muktir Gaan to Matir Moina, we have also tried to contribute to the
projection of a more positive image of Bangladesh. We have tried to hold up a mirror before the society to
remind the people of Bangladesh of their strengths, the richness of their traditions and the resilience of their
culture. At the same time, when these films are shown outside the country, they create a completely new and
fresh perception of our country that breaks the typical stereotypes. Now more than ever, we need to use the
powerful but neglected medium of cinema to create a new image of our country into the 21st
century. Tareque Masud is a film-maker.
Director
The director has the final responsibility for the creative aspects of the film. The producer hires the
Director of the film. Sometimes the director also functions as producer.
Synopsis, Draft
A synopsis is a summary of the contents of the film. It is a kind of sketch: a paper that reveals the
contents and form of the film or program. The reader can also get an idea of the film's approach and
style. Usually the synopsis is followed by a treatment.
First of all, the purpose of the synopsis is to sum up the series of events, the story. The synopsis of a
drama is a summary of the function of the film. Further, the synopsis can tell about the characters and
the crucial conflict.
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The synopsis does not present visual or otherwise detailed solutions. They would only restrict the
following writing process. A synopsis is important to the financier, the producer, the actual work
group and the scriptwriter himself.
A synopsis is a good phase in screenwriting, since the entity is not yet covered up with details. The
crucial idea, the fundamental conflict and the structure can be clearly identified.
Treatment
Intermediate between synopsis (or draft) and screenplay, a rather large summary. Treatment includes
the structure and plot of the film, even though it is not yet broken down into scenes.
The treatment should show the beginning, the middle and the end of the film, as well as the main turning points
Structure
A film has to have a beginning, middle and the end. This basic structure can be identified by many
conceptual tools. It is very common to divide a film into three acts. This division comes from the
theater and in its foundation one can see the structure of three-act or five-act play.
Plot
The plot tells the story of the film. The same story can be told through many different plots. The plot is
action, a series of events, taking us from the beginning of the film through the middle to the end.
The scriptwriter must keep the plot in his mind all along. Each sentence should forward the plot. It is
28
recommended to grasp the plot as soon as possible, already at the start-up sequence. You can scatter
descriptions of the setting and go deeper into the characters along the way.
The plot should not be too easily guessed. The viewer is pleased when the film presents a surprise.
One limiting factor is worth remembering: the inner logic of the story, created by genre, setting and
characters. The events cannot turn into something not fitting to the inner logic of the film.
Scene
From the viewpoints of scriptwriting, directing and producing, a scene is a unit of film narration, as
are shot, take and sequence. A scene is an active entity happening in one setting, dealing with one
event of the script, and having a beginning, middle and the end. Cf. Act.
In a fiction film division into scenes is based on production grounds. According to writer a scene
changes when there is a jump in time or when the location changes. Yet there can be small jumps in
time
within the scene. Practically, a scene is a continuous part of a film, with:
• the same location, same setting
• the same actors
• the same time of day (lighting)
• the same continuity in the situation
Thus a scene changes into another, when
• the location changes
• the setting changes
• the time of day changes (lighting changes)
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• the continuity changes
For the documentary film and the experimental film "scene" is a more wavering concept, and there are
various opinions as to its exact contents. A scene is, however, always a part of a larger sequence, i. e. a
sequence consists of several scenes that fit together functionally. A scene can also mean a series of
shots or even an individual position of a camera. Thus a scene is a series of shots (or a single shot).
Storyboard
Storyboard is a visual or written account of what kind of visual images will be used in the film. The
written form usually includes the ratio, characters in the shot, duration of the shot and a brief account
of what is happening in the shot. In the visual form, or in storyboard, the shots of the film are
presented in a cartoon-like manner so that even the movement happening in the shot is somehow
visualized.
A storyboard artist is an artist, whose job is to make the storyboard according to the directions from
the script and the director/producer.
Storyboard is based on the screenplay and its basic idea is that already before the shooting the main
lines of the film are planned, the details that will be brought up are decided, and the duration of each
sequence is estimated
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CONTENT OF FILMS
Indian producers and directors are increasingly spending more time on the development phase of the
film and have started toying with experimental ideas. The film makers have also started paying attention to
the packaging of the film, which goes a long way in improving the final product.
Some of the changes that the Indian film industry has witnessed recently include shooting in long
schedules for a sense of uniformity and timely and efficient completion ( Lagaan, Dil Chahta Hai), use of
technology through better cameras and synchronous sound ( Lagaan, Dil Chahta Hai), focus on packaging and
marketing ( Kabhi Khushi Kabi Gham, Mujhe Kuch Kehna Hai, Gadar, Ek Prem Katha, Kasoor, Style,
Ajnabee, Pyaar Tune Kya Kiya), production
of small budget niche films ( Bollywood Calling, Monsoon Wedding, Tum Bin) and
experimentation of characters and novel story lines ( Zubeidaa, Dil Chahta Hai, Asoka, Lagaan, Aks, Chandni
Bar and Astitva).
Indian cinema has also arrived on the global stage with “Lagaan” securing an Oscar nomination,
“Monsoon Wedding” winning the Golden Lion at Venice and Ismail Merchant honoured by the Bafta
Academy.
EXTERNAL ENVIRONMENT OF FILM INDUSTRY
(I) POLITICAL ENVIRONMENT SUPPORT AND PROMOTION BY DIFFERENT GOVERNMENT BODIES
Films Division
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The Ministry of Information and Broadcasting over the last 47 years through an exclusive Films
Division, set up in 1948, has been securing the active participation of the public in nation building activities,
through the medium of film. The largest agency dedicated to the production, and distribution of
documentaries and news agencies, the Films Division produces news magazines from its headquarters at
Mumbai, films on agriculture, defence and family welfare from Delhi and featurettes from its regional centres
at Calcutta and Bangalore. The Division caters to more than 12,911 cinema theatres allover India and to non -
theatrical circuits like units of the Directorate of Field Publicity, mobile units of the State Governments,
Doordarshan, field units of the Department of Family Welfare, educational institutions and voluntary
organisations. The Division's films are also screened abroad through the Indian embassies, television
networks, Government departments, educational, cultural, and social organisations as well. The Division aims
to foster the growth of the documentary film movement - which is essential to the realms of information,
communication and integration.
The Division has been given the responsibility of organising the Mumbai International Film Festival
for Documentary, Short and Animation films, which is a biennial event.
National Film Development Corporation Limited
The National Film Development Corporation Limited set up on 11 April, 1980 aims at bringing an
overall improvement in the quality of Indian cinema and also increasing its access. As films constitute a vital
segment of audio - visual culture, NFDC covers a large gamut of activities - production of films, export of
Indian films, import of foreign films, import and distribution of raw stock, construction of cinema theatres and
development of technology. The Corporation promotes the concept of low - budget yet high quality films,
which is a possible solution to the financial problems faced by the film - makers of the country. The
Corporation imports about 20 to 30 films annually for theatrical release. India exports films to over 100
countries. It participates in various international film markets to promote Indian cinema and also plays host to
a number of buyers from various countries. NFDC's main objective is to expose the Indian audience to a
plethora of fine films from various countries, however due to limited resources the emphasis is on good
quality family entertainers.
To fight video piracy, NFDC, in collaboration with the Indian film industry has set up an anti - piracy
body, Indian Federation Against Copyright Theft (INFACT), which is registered as a company under the
32
Companies Act. The Theatre Financing Scheme was launched by NFDC to ensure the creation of additional
seating capacity in India and to provide outlets for fine cinema.
Directorate of Film Festivals
The Directorate of Film Festivals was set up in 1973, under the Ministry of Information and
Broadcasting, to help promote Indian films of aesthetic and technical excellence, both within India and
abroad. Since then, the Directorate has supplied a platform for the best in Indian cinema by holding the
National Film Festival every year. The Directorate has been successfully promoting Indian cinema abroad and
also given a chance for Indians to appreciate some of the finest works of international cinema. Within the
country, it has made the newest trends in international cinema accessible to the general public.
The Directorate was brought under the NFDC in July 1981, and in July 1988, it was again transferred
to the Ministry of Information and Broadcasting.
National Film Awards
The National Awards for films, known as state awards till 1966, were set up in 1953, for promoting
the country's film art by acknowledging the outstanding achievements in various fields of film - making.
The Dadasaheb Phalke Award is decided by the Government of India, and the entries for the National
Awards are judged by two national juries, one for the feature films and the other for short films.
National Film Archive of India
The National Film Archive of India ( NFAI ) was established in February 1964, as a media unit of the
Ministry of Information and Broadcasting. Its objective is to acquire, preserve and restore the rich heritage of
national cinema, and the cream of international cinema. The archive has made significant progress in the
preservation of films, audio and video material, documentation, research and dissemination of film culture in
India.
33
The archive functions as the main repository for Indian and foreign research workers for viewing film
classics, relating to their research projects.
National Centre of Films for Children and Young People
The National Centre of Films for Children and Young People ( N'CYP ), earlier known as Children's
Film Society, was established in 1955, as an autonomous unit with an aim to provide children value - based
entertainment through the medium of films, and is engaged in production, acquisition, distribution and
exhibition of children's films. N'CYP conducts ' International Film Festivals for Children and Young People'
every two years. The Centre produces feature films, television serials, short featurettes and short animation
films for children and young people. It also purchases the rights of foreign films and presents them in the
country after dubbing in Indian languages. The films produced by N'CYP are entered in several National and
International Film Festivals and have won many awards.
Film and Television Institute of India
The Film and Television Institute of India ( FTII ) located at Pune, imparts technical training in the art
of film - making and also gives in - service training to the personnel of Doordarshan. The FTII conducts 3 -
year specialisation courses in motion picture photography, cinematography, film direction, sound recording
and sound engineering with one - year integrated training.
The TV wing of the Institute primarily caters to the training requirements of various production and
technical staff of Doordarshan. Television training is given in TV programme production, studio technical
operations, TV films and TV graphics and design. The Institute regularly sends its students' films in national
and international film festivals, in order to give exposure to students' work, not only on the national, but the
international level.
Federation of Film Societies of India
34
The Federation of Film Societies, an apex body of the film societies in India, is provided grants - in -
aid by the Ministry of Information and Broadcasting to spread film awareness and development of audience
taste in the realm of cinema. These Film Societies aim at nurturing and developing film culture in the country. www.meadev.nic.in/media/films.htm
FDI POLICY
100% foreign direct investment (“FDI”) is permitted in the film sector.
(II) ECONOMIC ENVIRONMENT
Purchasing Power Parity (PPP) in India has increased from $300 in 1992 to $ 1600 in 1997
and from $ 1600 to $ 2660 in 2002-03. So today people have more money to spend on entertainment which
leads to increase in turnover of the industy. http://www.theodora.com/wfb/
Interest rate: As there is a fall in interest rate in last several years, film producers get funds at
low rate. This encourages people to venture into the business of film production.
(III) SOCIO-CULTURE ENVIRONMENT
Bollywood is perceived to be ‘The Place where Dreams come true’. Every Indian would wish to be
like, look like, see like or talk like a particular actor/ actress from this magic world. Imagine the level of
etching this industry has on the hearts and minds of people.
The Indian film industry has moulded itself very perfectly with the ongoing traditions, values, beliefs
and lifestyle. A flashback into the history of the country and its people would reveal the impact it had on the
industry.
35
Just after India broke from the shackles of dependency, patriotism was deep down there in the hearts
of the people. To serve the country better, there were thinkers and actors like Manoj Kumar who had come
with films like Kranti, Roti Kapda Makan, Purab Paschim, etc.
Next came in the phase of action and drama where our very own Mr. Amitabh Bachan was aptly called
the Angry Young Man. He worked in the movies like Zanjeer, Sholay, Deewar , etc.
The present era inspired by westernisation with more broader mindsets and a complete shift in
paradigm has resulted in movies like Dil Chahta Hai, Murder, Julie, etc.
From hairstyles to costumes, from beliefs to lifestyle, from house concepts to the toy in the hands of a
kid, every thing which is seen in the daily cores is reflected on the Silver Screen.
(IV) LEGAL ENVIRONMENT
THE FILM INDUSTRY AND COPYRIGHT LAWS
The Threat
The film industry in India today is facing its biggest threat, that of piracy. This includes, cable piracy,
VCR piracy and its new avatars, VCD piracy. The development of these new forms (VCDs and now DVDs)
are a double edged sword. Whereas, on the one hand they provide for additional sources for commercial
exploitation of the film, on the other hand, the ease with which they can be copied, reproduced and
disseminated to the public, is giving the film industry nightmares. Films appear on cable without any authority
whatsoever, almost as soon as they are released in the theatres, sometimes even prior to their theatrical
release. Overseas rights of Indian films are sold almost simultaneously along with the release in India.
Copyright Laws in India
36
With the advancement of technology, Copyright laws in India have also been changing to keep pace
with the times. The Copyright Act, 1957 was enacted and came into force on the 21st of January 1958. In its
Objects and Reasons the legislature recognized that "new and advanced means of communications like
broadcasting, litho-photography, etc." call for certain amendments in the existing laws (Copyright Act, 1911).
The legislature also commented that "adequate provisions have to be made for fulfillment of international
obligations in the field of copyright which India must accept". It is in this year (1957) that cinematograph
films derived separate copyrights apart from its various components, namely, story, music etc.
The laws have thereafter been subjected to certain changes. It was Amending Act 65 of 1984 which
specifically addressed the issue of piracy. The Statement of Objects and Reasons to the amendment
acknowledged piracy as a "global problem due to the rapid advances in technology". Besides addressing the
loss in the form of royalties to the legitimate copyright owners, the legislature also realized the losses to the
exchequer by way of tax evasion. Certain relevant portions from the Object and Reasons for the amendment
are reproduced below :
"….recorded music and video cassettes of films and TV programmes are reproduced, distributed and sold on a
massive scale in many parts of the world without any remuneration to the authors, artistes, publishers and
producers concerned. The emergence of new techniques of recordings, fixation and reproduction of audio
programmes, combined with the advent of video technology have greatly helped the pirates. It is estimated
that the losses to the film producers and other owners of copyright amount to several crores of rupees. The
loss to Government in terms of tax evasion also amounts to crores of rupees. In addition, because of the recent
video boom in the country, there are reports that uncertified video films are being exhibited on a large scale. A
large number of video parlours have also sprung up all over the country and they exhibit such films recorded
on video tapes by charging admission fees from their clients. In view of these circumstances, it is proposed to
amend the Copyright Act, 1957, suitably to combat effectively the piracy that is prevalent in the country"
In its effort to address the above issues, by way of the amendments, the following changes were incorporated
in the Act, namely: -
i. The punishment provided for the infringement of the copyright was enhanced to a maximum of three years,
with a minimum punishment of imprisonment of six months, and a fine upto to Rs. 2 lakhs, with a minimum
37
of Rs. 50,000/-.; An enhanced punishment in the case of second and subsequent convictions was also provided
for;
ii. The provisions of the Act were now specifically made applicable to video films and compute programes;
iii. The producers of records and video films were now under a statutory obligation to display certain
information in the records, video films and containers thereof, which included the name of the copyright
owner, year of first publication etc.
India's new copyright law, passed in June 1994, became effective on May 10, 1995 and
establishes an entirely new potential for reducing piracy in India. According to the Statement of Object and
Reasons, the legislature recognized that "effective copyright protection promotes and rewards human
creativity and is, in modern society, an indispensable support for intellectual, cultural and economic activity.
The legislature further recognized that copyright law promotes the creation of literary, artistic, dramatic and
musical works, cinematograph films and sound recordings by providing certain exclusive rights to their
authors and creators. It was felt that the present Act needs revamping on the following grounds:
to extend more effective protection to owners of copyright and related rights in the context of technological
developments affecting the reproduction of words by, inter alia, bringing within the scope of copyright the
subsequent hire or sale of copies of cinematograph films, computer programmes and sound recordings.
to further clarify the law in respect of cable, satellite and other means of simultaneous communication of
works to more than one household or private place of residence, including the residential rooms of a hotel or a
hostel.
to make provisions for licenses whereby the reproduction of works by reprographic equipment or by means of
devices such as tape recorders and video cassette recorders, where such reproduction would not under the
existing law be infringement of copyright, shall be subject to payment or remuneration to copyright owners by
means of a levy on such equipment.
The law protects cinematograph films as a distinct work, giving the producer of the film the exclusive rights
38
i. to make a copy of the film, including a photograph of any image forming part thereof;
ii. to sell or give on hire, or offer for sale or hire, any copy of the film regardless of whether such copy has been
sold or given on hire on earlier occasions;
iii. to communicate the film to the public
India, being a member of two of the major copyright conventions of the world (The Berne Convention
and The Universal Copyright Convention), Indian works and works of Indian authors are accorded copyright
protection in all major countries of the world. Likewise, foreign works and works of foreign authors are
accorded the same protection as Indian works.
In addition to the law bringing India newly into compliance with its substantive TRIPS obligations in
the copyright area, the law provides for new minimum criminal penalties including a mandatory minimum jail
term which, if implemented, will go far to controlling piracy.
The government has initiated some measures for better enforcement of copyright laws. A summary of some of
these measures is given below :
The Department of Education, Ministry of Human resource Development, Government of India has
constituted a Copyright Enforcement Advisory Council (CEAC). The CEAC is reconstituted from time to
time to review periodically the progress of enforcement of the Copyright Act and to advise the government on
measures for improving the enforcement.
Creation of separate cells in state police headquarters. Special cells for copyright enforcement have so far
been set up in the following 23 States and Union Territories: These are the States / Union Territories of
Andhra Pradesh, Assam, A &N Islands, Chandigarh, Dadra & Nagar Haveli, Daman & Due, Delhi, Goa,
Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Karnataka, Kerala, Madhya Pradesh, Meghalaya,
Orissa, Pondicherry, Punjab, Sikkim, Tamil Nadu, Tripura and West Bengal. States have also been advised to
designate a nodal officer for copyright enforcement to facilitate easy interaction by copyright industry
organizations and copyright owners.
Encouraging setting up of collective administration societies and organization of seminars and workshops to
create greater awareness about copyright law among the enforcement personnel and the general public. For
collective administration of copyright, copyright societies are set up for different classes of works. At present
39
there are three registered copyright societies. These are the Society for Copyright Regulations of Indian
Producers of Films & Television (SCRIPT) for cinematographic films, Indian Performing Rights Society
Limited (IPRS) for musical works and Phonographic Performance Limited (PPL) for sound recordings.
There is now an urgent need for all the constituent parts, i.e. the rights owners, the government, the
enforcement agencies and the judiciary, to work jointly in eradicating the menace of piracy. www.filmpiracy.com/artic.html#a
FILM CERTIFICATION
All films meant for public exhibition, irrespective of their length, whether in celluloid or video or CD
or DVD version are subjected to censorship. Programmes produced exclusively for broadcasting through the
Television are excluded.
"Film censorship becomes necessary because a film motivates thought and action and assures a high degree
of attention and retention as compared to the printed word. The combination of act and speech, sight and
sound in semi darkness of the theatre with elimination of all distracting ideas will have a strong impact on the
minds of the viewers and can affect emotions. Therefore, it has as much potential for evil as it has for good
and has an equal potential to instill or cultivate violent or good behaviour. It cannot be equated with other
modes of communication. Censorship by prior restraint is, therefore, not only desirable but also necessary"
SUPREME COURT OF INDIA
Film Censorship In India
The Cinematograph Act 1952, apart from including provisions relating to constitution and functioning
of the Central Board of Film Certification (then called the Central Board of Film Censors), also lays down the
40
guidelines to be followed for certifying films. Initially, there were only two categories of certificates "U"
(Universal exhibition) and "A" (restricted to adult audiences), but two other categories were added in June
1983 "UA" for unrestricted public exhibition subject to parental guidance for children below the age of twelve
and "S" films for public exhibition restricted to specialized audiences such as doctors. The 1952 Act has been
amended to bring it up-to-date, and the last amendments were in 1981 and 1984. The present censorship of
films is governed by the 1952 Act, the Cinematograph (Certification) Rules promulgates in 1983 and the
guidelines issued from time to time, The guidelines are issued under section 5(B) of the Act.
Legislation
The censorship of films is governed by the The Cinematograph Act,1952, the Cinematograph
(Certification) Rules promulgated in 1983 and the guidelines issued on December 6, 1991. The guidelines are
issued under Section 5B of the Act. This section says that ' a film shall not be certified for public exhibition,
if, in the opinion of the authority competent to grant the certificate, the film or any part of it is against the
interests of the sovereignty and integrity of India, the security of the States, friendly relations with foreign
States, public order, decency or morality or involves defamation or contempt of court or is likely to incite the
commission of any offence.
Enforcement
a. Introduction
1. The Central Board of Film Certification is responsible mainly for certifying films. The
enforcement of the penal provisions of the Cinematograph Act, 1952 is with the State Governments /Union
Territory Administrations, since exhibition of films is a State subject...
2. The CBFC does not have any enforcement agency or manpower directly under its control. It has
to depend on the local police force for enforcement of laws.
3. There are various forms of violations which often go unchecked because there are no checks and
no complaints from either the law enforcement agencies or members of the public.
41
b. Violations of Cinematograph act
The following are the major violations that agitate the minds of the public:
(a) exhibition of an 'A' certified film to a non-adult
(b) exhibition of an 'S' certified film to persons other than those for whom it is meant;
(c) exhibition of a film in a form other than the one in which it was certified. Such violations are known as
interpolations. Interpolations can be described as follows:
(i) re-insertion in prints of a film for exhibition those portions which were deleted by the Board before
certification of the film
(ii) insertion in prints of a film, portions which were never shown to the Board for certification;
(iii) exhibition of 'bits' unconnected with the certified film.
(d) exhibition of a film which was refused a certificate (or 'banned' in common parlance)
(e) exhibition of uncensored films with forged certificates of other films.
(f) exhibition of films without censor certificates.
C. Penalties
1. Offences with regard to violations of censorship provisions are Cognizable. Furthermore, they
are non-bailable.
2. Section 7 of the Cinematograph Act provides penalties for violation of censorship provisions.
Penalty can also be imposed for failure to comply with section 6A which requires that any person delivering a
film to an exhibitor or a distributor will also give to him details of all cuts, certification, title, length and
conditions of certification.
42
3. A person guilty of violation while exhibiting celluloid films is punishable with imprisonment
for a term which may extend to Three years, or with fine which may extend to Rs.1/-lakh, or with both, and
with a further fine up to Rs.20,000 for each day for a continuing offence. Similarly, Showing of video films
which violate the rules in the manner prescribed in this section will attract imprisonment of not less than three
months but which may extend to three years and a fine of not less than Rs.20,000 but which may extend to
Rs.1/-lakh and a further fine up to Rs.20,000 for each day for a continuing offence.
4. Furthermore, the trial court can direct that the offending film be forfeited to the Government.
Under Section 7A, any police officer can enter a hall where an offending film is being screened, search the
premises and seize the print. Films can also be seized when they are likely to be exhibited in violation of
Cinematograph Act.
Film Censorship.
In keeping with this responsibility, the Central Board of Film Certification known till June 1, 1983 as
the Central Board of Film Censors) was set up in Mumbai, with regional offices in some other cities (at
present there are nine such offices in Mumbai, Calcutta, Chennai, Bangalore, Hyderabad,
Thiruvananthapuram, New Delhi, Cuttack, and Guwahati). A Film Certification Appellate Tribunal (FCAT)
has also been constituted under section 5D of the 1952 Act for hearing appeals against any order of the CBFC.
While the work of certification of films is a central subject, the states have to enforce these censorship
provisions and bring any violations to the notice of the CBFC. The organizational structure of the CBFC is
based on the provisions of the 1952 Act and the Cinematograph (Certification) Rules 1983. The Chairman and
members are appointed for a term of three years or till such time as the Government may direct. They
comprise eminent persons from different walks of life such as social sciences, law, education, art, film and so
43
on, thus representing a cross-section of society.The CBFC is assisted by the Advisory Panel in various
regional offices which are headed by Regional Officers. The members of these panels are also representative
of cross-section of society and interests. These members hold office till such time as the Government may
direct but not exceeding two years. However, the members can be re-appointed. The CBFC has divided itself
into Examining and Revising Committees to provide a two-tier system for certification of films in the event of
the applicant or the Chairman himself not being satisfied with the decision of the Examining Committee. The
certification rules also apply to foreign films imported into India, dubbed films, and video films. In the case of
dubbed films, the Board does not have any fresh censorship for the visuals in general cases. The Certification
does not apply to films made specifically for Doordarshan, since Doordarshan has its own system of
examining such films.
The Process of Certification
- Examination
1. The Cinematograph (Certification) Rules, 1983 have laid down the procedure that a producer
must go through to get his celluloid, video, CD or DVD film certified.
2. The film, document specified in rule21, censor fee and cess fee have to be submitted to the
regional officer of the concerned regional centre. The regional officer will form an Examining Committee to
view the film. This Examining Committee, in the case of a short film, will consist of an officer of the CBFC
and one member of advisory panel either of whom shall be a woman, and in the case of a long film/feature
film, one officer of the CBFC and four members of the advisory panel of whom two persons shall be women.
After the film has been previewed, a report indicating the recommendations of EC along with the category of
certificate recommended and deletions / modifications as deemed necessary is prepared and given to the
Chairman of CBFC who may approve the decision of the examination committee and ask the regional officer
to initiate further actions necessary to issue the certificate.
-Appeal
44
3. However, if the Chairman, on his own motion or on the request of the applicant, so feels, he may refer the
film to a Revising Committee. The Revising Committee will consist of the Chairman, in his absence, a Board
member, and not more than nine members, drawn either from the Board or the advisory panel, provided none
of them was on the Examining Committee. The Revising Committee will view the same film print shown to
the Examining Committee without any changes, and each member will be required to record his verdict before
leaving the theatre. If the Chairman is not in agreement with the majority view, he may direct another
Revising Committee to see the film.
4. After the applicant is apprised of the decision of the Board, he will delete or modify any portions (if so
directed) and submit them to the regional officer along with one copy of the film (in video cassette format) as
certified.
5. Before any order prejudicially affecting the applicant of a film is passed by the Board, he is given an
opportunity to represent his views in the matter.
-Appeal in Tribunal
6. An applicant aggrieved by the order of the Board can go on appeal to Film Certification Appellate Tribunal.
7. If the matter goes in appeal to the Film Certification Appellate Tribunal which is headed by a retired judge as
Chairperson and not more than four other members, the FCAT may view the film and hear both the applicant
and the CBFC before coming to its judgement.
8. Certificate is finally issued by the concerned Regional Officer on behalf of the Board.
45
AN OVERVIEW OF FILMS CERTIFIED
(From 1.1.2003 to 31.12.2003)U UA A S TOTAL
INDIAN FEATURE FILMS 479 198 200 - 877FOREIGN FEATURE FILMS 34 67 181 - 282INDIAN SHORT FILMS 1056 64 57 - 1177FOREIGN SHORT FILMS 47 109 72 - 228INDIAN LONG FILMS OTHER THAN FEATURE
- - - - -
FOREIGN LONG FILMS OTHER THAN FEATURE
- - - - -
TOTAL 1616 438 510 - 2564(Source: Central Board of Film Certification)
ENTERTAINMENT TAX
Films are a huge source of government receipts on account of the high rate of
entertainment tax which stands at an average of 25 per cent for the country as a whole. In fact, in Maharashtra,
it is as high as 60 per cent. Gujarat has an incidence of 100 per cent, while Madhya Pradesh has a tax rate of
75 percent. Andhra Pradesh has low tax rate of only12 percent.
Texemption for export earnings raised abroad according to Section 80HHF is 20%.
Tax benefits to multiplex construction companies :
46
50% of the profits and gains derived from the business of building, owning and operating multiplex theatres
are allowed as a tax deduction. In order to avail of this deduction, the theatre must have been constructed
during the period between April 1, 2002 and March 31, 2005 and must not be situated in Mumbai, Kolkatta,
Chennai and Delhi. The deduction is available for five (5) consecutive assessment years beginning from the
first assessment year.
(Section 80IB(7A) of the Income-tax Act, 1961). www.incometaxindia.gov.in
(V) TECHNOLOGY ENVIRONMENT
The Indian film industry is increasingly adopting digital technology in its processes. The cameras that
are being used in India are the same as those used in Hollywood today. Digital breakthroughs and digital
creation of scenes is increasingly becoming part of Indian cinema. There is marked improvement on the
technical side such as dolby sound, computerized editing, special effects etc. It is expected that digital
technology will bring a sea change in the film production.
Areas which need to be addressed are in the Digital Space are:
- Animation: Currently the global outsourcing in the animation space is being done in the Philippines, Taiwan
and Korea. There are more than 50,000 animation specialists working in this space. In India, there are just
four major studios and about 2,000 to 3,000 professionals are available. The scope for providing training in
Animation and creating opportunities for outsourcing from India is untapped and huge. Individuals with basic
drawing and visualization skills can be easily trained in animation.
- Special Effects: It requires very high capital investments. Large IT players have the opportunity to enter this
space and can also provide high-end consultancy.
- Digital Cinema: Infrastructure
47
FICCI has tied with NASSCOM which can be called as “ e-Entertainment Alliance”.
This Alliance will establish:
1. A forum to create ‘Human Capital’ from India in the creative and performing arts and related technologies,
provide young and budding entrepreneurs opportunities to compete globally in the technology space in
animation, special effects, digitization etc. and produce winners in the International arena. Training Programs
and workshops are to be organized for both IT as well as entertainment techies.
2. Every possible form of media will be covered in the e-entertainment space be it print, radio, TV,
electronic/internet based, films, sports, … … the opportunity lies in developing the abilities to digitize the
contents.
3. There is a need to Create an ‘Advanced Institute for Digital Arts ‘ (AIDA) in Mumbai.
4. The source of funding in the Hollywood film industry generally comes from Germany through the
“Completion guarantors” and not through the Venture Capital Funds at this point of time. Hence eE@ needs
to research and develop alternate sources of funding.
5. Better interaction with International Bodies like Motion Pictures Association, USA etc.
6. Leveraging the TiE network in bridging the gap between Hollywood & Bollywood and getting marketing
support from the Indian Community abroad.
7. Working closely with the Investor community in India and abroad.
8. Lobbying with the Govt. in technology related issues benefiting the entertainment industry.
PRODUCT
48
Have you ever had a hand in developing a product that was engineered for efficiency. Tested for performance.
Packaged for shipping. And had it sit on the shelf?
Today’s marketing ‘tude is about design as much as it is about product life cycle. A marketing attitude of
connecting people with people through a product and/or service is at the heart of every decision and process in
business. An attitude of identifying the audience/customers. An attitude of giving them more bang for their
buck. An attitude of getting their attention in a world of media clutter. An attitude of building value for your
company through smart business negotiations. All those choices and skills are elements of marketing.
A movie product consists of intellectual property than can be ported to a variety of deliverables: theatrical
exhibit, non-theatrical exhibit, video tapes, DVDs, CDs of the soundtrack, collectible editions, television and
cable broadcast, Internet-served, and then there is the split dimensions of domestic, foreign, and niche
markets. Not to mention ancillary products such as clothing, toys, games, posters and even restaurants for
successful franchises. Oh…and then there’s the franchise rights, endorsements, product placements…and a
host of offshoots that are bought and sold, leased and rented.
The digital cinema product is also a service. It’s a product that can be a valued collectible or a gift. It’s also
entertainment opportunities in a theater or in someone’s home. The movie biz is one of the most complex in
the communications industry because of its creativity, its diversity and its continual explosions of
technological delivery options.
Production value is a nice global term in product marketing of movies. Included in this catch-all basket are:
Strength of the story
Star power – promotional quality of actor, director and maybe, director of photography
Visual quality
Sound and Music quality
Deliverability: quality, on-budget, on-time and marketing materials
Marketing and Distribution Services
49
Based on the Test Marketing analysis, a plan is made looking at the sets of audiences whom the film appeals
the most, & accordingly marketing budgets are allocated & publicity campaign is planned and launched, e.g.
according to test data, the film is intended to appeal to Hindi-speaking, college-going groups, then marketing
& publicity campaigns are focused on such segments. The objective is to target the right audience & to derive
maximum mileage from promoting & exploiting the product.
Methodology
The plan also aims at advising how many prints have to be put in the market at the time of release of the film.
Estimates are given for allocating these prints, circuit-wise.
Further, plans can be drafted for exploitation of any language film simultaneously with the release of the film
in following languages:
English
Tamil
Kannada
Malayalam
Telugu
Sinhalese for Srilanka
Bengali for Western India & Bangladesh
Out of the total number of prints, one can have at least 50% prints dubbed in the above languages, which
ensures very high reach and acceptability.
The plan also covers cost estimates to various media with publicity budgets. Budgets are separately made for
TV & cable publicity, Newspaper publicity, direct promotions, Outdoors publicity, etc.
Based on the above, hype is created in the market & a well-established distributor line up is ensured for
acquiring rights. In this bargain the rights holder gets better value for the product & sells on his terms.
Pricing & Distribution review is based for each major circuits & appox minimum + maximum pricing
estimate. Further estimates shall be provided on sale of different rights (audio + theatrical + home video +
cable) in the neighboring countries like Pakistan, Srilanka, Bangladesh & estimates for such rights in Indian
territories.
Advantages:
50
Ensure that during the first 3-4 weeks, film is highly successful.
Create a cascading effect & get a better turnout at theatres.
Film is launched with right marketing appeal.
Getting better value of product.
Planning and implementing an expertly-drafted Promotion & Advertising plan can result in unexpected
profits, as in the case of Ek Chhotisi Love Story.
Intrinsic returns will increase with more yield on other rights such as satellite, television, etc.
Marketing a film· What films have you seen recently? What made you want to go and see
them?
Make a list of all the factors that influenced you and put them in order of
priority.
· Make a list of all the different ways in which you might hear about a film. Put
these in order as to which give you the most information. Now re-order them
to show which are the ones that make you really want to see a film. What
does this say about the way you personally make choices about your film
viewing? How does this compare with your friends?
· What cinemas are there in your local area? Are there any differences
between them? How do you find out details of what films are showing and
when? Visit the websites for several cinemas. How do the websites reflect the
different nature of the organisations?
FILM MARKETING STRATEGY
Via the implementation of a professional dedicated production team, the film story line will focus on a highly
targeted demography audience.
51
Successful independent films made by first and/or second-time producers are predominantly made for
“targeted audiences”. A Hispanic American “targeted film” will assured success in this
market, (please see Hispanic American market research at the end of the presentation). An independent film is
typically a small, character driven movie that plays at selected theaters in urban markets. After their run in
theaters these movies become widely available for rental or sale at video stores and are seen on national cable
networks such as Showtime or HBO. Examples of this kind of movies are:
My Family, Mi Familia, El Norte, Sugar Hill, Amore Perros, tu, Mama Tambien La, La Puta Vida, Water for
chocolate
Distributors
Companies that buy films and present them in movie theaters are called distributors. Most large distributors
have a sister company or division that deals specifically with independent films.
Fox Searchlight Twentieth Century Fox Corporation
We have already made contact with these distributors and are currently developing relationships with them for
the distribution and purchase of the “Vampira project. Our full intention is to create, produce, and ultimately
sell “Vampira” for a maximized profit. We feel, that while we love our project, ultimately, it is the exposure
and sale of the film that will generate the publicity and profit that we require to continuing making films.
Film Festivals
Known to the public as film festivals, these international movie-industry gatherings are actually open markets
and trade shows where hundreds of distributors look for new films.
52
Our intention is to enter our film in all the competitive festivals, simultaneously we will attend the major
markets in order to personally promote our film. These Film Festivals include:
The Sundance Film Festival
The American Film Market
The New York International Latino Film Festival
The Los Angeles Latino Film Festival and Market
The Miami Latino Film Festival
The New York Film Festival Uruguay International
Film Festival
The New Directors/New Film Series presented by the Film Society of Lincoln Center
The Film Festival of Punta del Este, (Uruguay)
As well as several South and central American Film Festivals.
We will put together an aggressive marketing plan of our product to be displayed at these venues. Vampirism
being a successful product in the film industry will guarantee a profit in the Hispanic market and the
international horror film market. We will attract attention to our film by directly approaching foreign and
domestic distributors and by winning awards. We expect our efforts to increase our chances of winning
awards and gain recognition.
ADVERTISING AND PROMOTION
The primary target market is the Hispanic American community.
The marketing communications activity will be focused on the Latino community to transact on the
“Vampira” film Hispanic will be reached through a broad based marketing channels:
Film Festivals
Trade Magazines and Print Publications
Media campaign: Radio and TV Promotion
On Line (Internet) Marketing
The primary target market is the Hispanic American community. The marketing communications activity will
53
be focused on the Latino community to transact on the “Vampira” film. Hispanics will be reached through a
broad based marketing channels:
Film Festivals
Trade Magazines and Print Publications
Media campaign: Radio and TV Promotion
On Line (Internet) Marketing
The nature of the storyline of “Vampira” will transcend to the Anglo market as well as Hispanic and the
vampirism/horror markets.
Budgeting Budgeting is the operation where each of the scenes of the script is broken down and analysed followed by a
financial assessment of the total cost of each scene. The total financial requirements for the film become the
sum of the budgets of each scene. This budget is used to attract finance and is scrutinised by investors. During
production, it is the yardstick whereby the producer, the crew and the investors can gauge the progress of the
productions and determine whether the shoot is on or behind budget.
AN INTRODUCTION TO FILM MARKETINGIn a crowded marketplace it is not easy to sell and promote a given film. In "An Introduction to Film
Marketing", Christian Kmiotek discusses some essential points of film marketing, shedding light on why it is
so very important, why film has to be considered as both art and product and why the film industry is a
product driven market. While acknowledging the uniqueness of each film, this introduction explains why and
how marketing can help to bring your film from script to screen and enhance its chances to be successful at
the box office.
Marketing & Promotion
54
In this glittering world of glamour, it is very important that a product is packaged well. Therefore, marketing
and promotion of a film has become a critical decision point for producers/distributors. In Hollywood, the
amount spent on the marketing and promotion of a film matches the skyrocketing film budgets. This same
practice is now more or less also being witnessed in Bollywood. Although on a relatively smaller scale
compared to Hollywood promotions, Bollywood's ad spends are also on the rise, along with the development
of a merchandising market (like caps, umbrellas and T-shirts) for "brand recall".
However, now with Bollywood aiming to globalize, marketing of the film/product will play a lead role. The
Indian film industry will have to lay emphasis on the need for proper marketing and its increasing
professionalization the world over. Distribution and marketing strategies are important and very different in
Hollywood. Bollywood will be required to play by the rules of the game in an overseas market to promote its
films. Be it either in Hollywood or Bollywood, the marketing and promotion of the film plays a very
important role in the creative awareness of a film.
Bollywood Marketing and promotion of a film in Bollywood takes place in the following
forms:
(a) Pre-Launch Publicity
The marketing process of a film starts approximately a month before the release of the music of the film. Pre-
launch publicity of the film plays a crucial role in the success of film at the box office. Distributors are usually
responsible for the marketing and advertising of the film, which includes outdoor advertising (hoardings),
trailer inserts, and advertisements through magazines, television and of late, the Internet.
(b) Music Release
The music of the film is generally released two months before the film itself is actually released. This way the
track of the film gets a chance to reach its peak without any bias whatsoever. Once the music gets released,
the music company spends money on the promotion of the film. The music companies generally buy spots on
channels in the beginning of the year itself. The idea at this stage is to create awareness about the film in the
public.
(c) Time of Release
55
The producers try to ensure that the film is released at a time when the audience is in a festive mood. For
instance, New Year, Diwali, and Christmas are considered to be good times in the year to release films.
Similarly, most Hollywood films are released during summer and Christmas.
(d) Coffee Table Books
Recently, Bollywood has developed a new trend of releasing coffee table books of films such as The Making
of Sholay, The Making of Asoka and most recently, The Making of K3G. This trend has, judging from the
sales, been quite a hit, as it has caught the fancy of many film-crazed fans. The Making of Sholay won the
National Award for Best Book on Indian Cinema, 2000 and sold nearly 3,000 copies.45 These books have also
found a ready market globally amongst non-resident Indians, as well as cross-over audiences.
Even with the average production cost of a studio film falling, the marketing and promotion costs of films in
Hollywood continue to be on the rise, with audiences paying even higher prices to see films. The average cost
of marketing films to the public in 2001 rose nearly 14% from the previous year to US $31 million. 46
According to the Motion Picture Association of America, about 25% of the advertising costs of typical
Hollywood studio films go to network TV and 17% to the local TV. Cable TV, radio and billboards take up
further 20% of a film's advertising costs.47, Despite much talk about harnessing the power of the Internet to
market films, only 1.3% of a film's advertising budget currently is spent online. Similarly, marketing
expenditure of films made by smaller subsidiaries of the big studios (Walt Disney Co's Miramax Films and
AOL Time Warner Inc.'s New Line Cinema), has skyrocketed nearly 54% to US $10 million per film.48
According to CMR/TNS Media Intelligence (formerly Competitive Media Reporting), the major studios spent
US $944.5 million, more than one-third of their media outlays, on network advertising in 2001.49 In the last
five years, Motion Pictures has been the top advertising category for new products contributing from 25-30%
of total advertisement spending for all new products.
A big Hollywood film would normally require to gross more than US $100 million to be considered a hit. But
as budgets and marketing costs continue to skyrocket, crossing that threshold does not guarantee profitability.
Road to Perdition, Minority Report and Red Dragon grossed a collective US $330 million, but due to steep
56
profit, production budgets and profits divided among stars, producers and directors, the three films together
are not expected to make much, if anything, for the studios
Despite the large amount of revenue that a successful film is likely to bring in, the making of a film is in and
of itself an expensive art, requiring coordination and cooperation amongst numerous people through the
several stages of production. In this chapter, we have briefly explained the process of film production and
have outlined certain basic differences in the processes followed in Bollywood and Hollywood.
Procuring Finance
Finances for a Bollywood film, as it stands presently, comes from the following sources:
(a) Private financiers
These people mostly comprise of diamond merchants, brokers and builders who have a lot of liquid cash they
can spare. An established, well-known producer with a good track record can raise money at about 2% interest
per month. For the less fortunate, interest rates could be as high as 4% per month.
(b) Pre-sales
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Pre-sales are the advance sales of distribution rights in various media and territories. A pre-sale may take a
variety of forms like theatrical, music or satellite rights, which are in turn given to distributors, record
companies and satellite channels, respectively.
For the purposes of the distribution of the theatrical rights of an Indian film, the market is divided into
different geographical territories (including the overseas market). The rights for each territory are normally
sold separately. The producer usually gives the distribution rights of a particular territory for a particular
period to the distributor upon receipt of an advance credit from the distributors. Generally, for well-known
producers, distributors book films in advance. Under this system, the distributor pays the producer a portion of
the cost up front (approximately 40%) and the balance (60%) upon receiving the final print.
(c) Self-Finance
Unlike Hollywood, where the producer seldom finances his own film, in Bollywood, it is not uncommon to
find a producer financing his own film. This practice, however, is typical of large production houses. This
method of finance enables such production houses to leverage and sell the rights in the film at a premium, just
short of the film's release. However, in recent times, the practice of the producer investing his own money in a
film is comparatively decreasing. Also, with bank finance being an option to raise funds, the producer usually
prefers not to take the risk of investing a substantial amount of money in the film.
(d) Black Money
Leaving aside private financiers, who are an extremely costly option, funds are not easily available for
producers and therefore, producers tend to fall prey to black money. A number of the payments made in the
course of production of a film, including the payments to and from the financiers, transactions with the
distributors, music companies, the star cast, etc., have an element of unaccounted money in them. Five years
ago the Financial Times noted 'Bombay's thriving film industry has long had connection with organized
crime, largely through the laundering of 'black' money used to finance many of the films.38 However, due to
the recent attacks on prominent Bollywood producers, and with the government's move to provide a boost to
the Indian film industry, this mode of finance is becoming increasingly unpopular. Further, with the move
towards the corporatization of Bollywood, other formal sources of financing are also opening up.
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(e) Bank Finance/Corporate Finance
Pursuant to the film sector being accorded "industry" status, bank financing is now permitted in the film
industry. The IDBI is the first bank that initiated the process of financing films. Similarly, the Bank of India
also expressed its intention to follow suit. This source of finance is discussed in detail in Chapter III.
Recently, the new trend that has emerged is the production and financing of films by corporate houses. Most
of the well-known corporates like the Tatas, Birlas, and Reliance have set up separate divisions/companies
and are investing in this space. Even though they may not know too much about films, they do know about
professional management and processes, which is what Bollywood needs most today. Bankers, too, are
getting into the film business. A classic example is that of Idream Production Private Limited, an offshoot of
SSKI Finance. Idream has distributed cross-over films like Monsoon Wedding, Bend it Like Beckham and
Bollywood Hollywood, creating an altogether new demand for this niche market of specialized films.
(a) Primary Sources of Finance
Finances for films in Hollywood comes from the following four main sources:
(i) Studio houses;
(ii) Joint Ventures;
(iii) Equity/Investor Financing; and
(iv) Loan Financing.
A completion guarantee and appropriate insurance are two of the most important requirements for the
financier (whether private investor, distributor or bank) of a film (as described in Chapter III).
For a film financed by a studio, a typical agreement is the production-financing-distribution agreement ("PFD
Agreement"). It addresses issues that relate to elements of both creativity and finance. The production
company, in order to obtain the financing necessary to produce its film, either secures a direct monetary
investment and assumes responsibility for all other production aspects, as well as negotiation of distribution
59
arrangements. Or, it may negotiate an agreement with a studio or another production or distribution company
to provide the financing, production facilities, and distribution arrangements.
If the production company has gathered the essential production elements, it may try to finance the picture
through pre-sales. The production company may also go to various distributors for pre-production
commitments to distribute the film after it is made. In order to work effectively, such commitments must
include monetary advances, which may cover all or some of the production costs. The strength of the
production company's reputation and the package of the director, performers and story determine whether the
distributor's reluctance to take such risks will be overcome.
(b) Secondary Sources of Finance
Hollywood films are also funded to an extent through a secondary source of finance , also known as “support
finance.” The various means of support finance are:
(i) Gap Financing;
(ii) Merchandising;
(iii) Corporate Endorsements / Product Placement; and
(iv)Facility Arrangements.
The aforementioned are discussed in greater detail in Chapter III.
In Hollywood too, although there are no statistics to back it up, there is a significant amount of unaccounted
money that is pumped into the filmmaking process. This forms an unofficial source of finance and deserves a
passing mention.
Apart from the above, there are many other ways Hollywood film makers fund their film, such as grants from
foundations (especially for documentaries and educational films/videos), individual and/or corporate
investors, and, very often, financing out of their own meager pockets.
(c) Security Lien
A film has various underlying intellectual property rights such as the film itself, musical works, sound
recordings, artwork and still photography, all of which can be used as security to raise finance. As part of the
process of acquiring a completed film, a Hollywood financier takes various precautions and employs certain
60
procedures to ascertain the status of the production company's rights and its ability to confer distribution
rights. The two most common forms of lien are the following:
(i) Lab Lien
All production companies make arrangements with a film-processing laboratory for film processing needs. A
financier usually lends money to a producer upon obtaining a laboratory lien. This is dealt with under "Post
Production" in Chapter II .
(ii) Bank Lien
It is normal for finances to be routed through a production bank account designated specifically for
production. The production company is not permitted to withdraw funds from the production account except
for the purpose of applying them towards the production of the film in accordance with the agreement. The
financier will normally require a form of acknowledgment from the bank at which the production account is to
be maintained. This ensures that the bank will not exercise any right of set-off it may have in respect of debts
incurred by the production company in its own right against funds maintained in the production account.
Music
Music is considered an integral part of the seamless web of word, image and sound the stuff that cinematic
magic is made of Music,42 in Indian films, forms one of the most important ingredients that contribute to the
success of a film, thereby ensuring a steady inflow of revenue for the producer. India is the second largest
producer of music, a crucial selling point for Bollywood films. Currently, film music constitutes a major
chunk of the Indian music industry. However, since the past year the Indian music industry is facing
substantial losses due to falling sales, fewer hits, and higher taxes. The Indian Music Industry (IMI), which is
the apex body of music companies, estimates that owing to piracy and high taxes, the legitimate industry has
shrunk by 27% in volume and 38% in value over the last two years.43
There are various types of contracts that the producer can have with the music company. The music rights are
nothing but just another option that the producer can sell to get money. One way it is done is through an
outright sale of the music rights of the film to the music company.
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In the case of a big banner, or when the producer is confident of the success of the music, the music rights are
not sold on an outright basis. Instead, a minimum guarantee is taken by the producer, over and above which a
royalty is also paid to the producer.
Besides paying for the musical rights of the film and the royalty, music companies also spend time and money
promoting the music on various media fronts. The amount to be spent on promotion is decided jointly by the
music company and the producer.
Recently, with the slump in the music industry, music companies are offering more of royalty-based deals, as
opposed to minimum-guarantee deals. Royalty deals vary depending on the requirements of the film
producers and music companies. If the upfront payment towards the promotion of the film is borne by the
music company, the royalty rates vary from 8% to 12% on sales. However, if the deal is such that the
producer gets the money only upon the music company recouping its costs, the royalty may go up to 15% or
20%. 44
Distribution
There are primarily two stages at which the distributors come in the picture for the distribution of the film.
Pre-completion
While the film is in progress, the producer is often in need of finances to complete the film. At this stage, the
producer begins to negotiate terms and conditions with various distributors.
Post-completion
Once the film has been completed and the producer wants to launch a film, he needs a person who can market
the same.
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Typically, in Bollywood, a distributor buys the distribution rights of a film for a particular territory and
recovers his costs from the exhibition of the film. For the purpose of domestic film distribution, the country is
divided into eight circuits.51
The distributor usually bears the downside and shares with the producer the upside of the film's eventual
popularity. The distributors buy the rights based on their perceptions of the film's box office chances. The
distributorship pattern does not follow a rigid format. The price at which the rights are sold for each territory
are expressed as a percentage of the rates at which they are sold for the Mumbai circuit.
(a) Distribution Deals
Distributors enter into mainly three types of deals with the producers:
(i) Outright Sale: The distributor purchases from the producer certain or all distribution rights in the film on
an outright basis for a fixed sum and a specified period.
(ii) Minimum Guarantee (plus royalty): Minimum Guarantee ("MG") is the minimum downpayment made by
a distributor to the producer for distribution rights in the film. This amount is usually based on the track
record of the producer, the star cast and budget of the film. The MG is paid to the producer, either as a lump
sum or in parts, from the pre-production stage until the release of the film. The producer may also, based on
the agreement with the distributor, get royalty overflow, meaning he would also, if the film makes profits
(after deducting distributor's costs and commission), share the upside with the distributor. Similarly, the
distributor may also enter into an advance contract with the producer, which is similar to MG, except that the
distributor has the right to, in the case the film does not do well, take back his advance from the producer.
(iii) Commission: Here, the distributor only charges a commission on the collections of the film. Thus, in this
method, the distributor pays no initial amount to the producer. He only acts as an agent.
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(b) Overseas Distribution
In the case of overseas distribution, the rights are usually sold on an outright basis. The producer might
contract with a single distributor for complete overseas distribution, or might divide them into further
territories. The overseas distributors have their offices in India and approach the producers in a similar way as
the local distributors. Besides geographical territory rights, there are other rights which are given out by the
producer, i.e. music rights (domestic and overseas), cable satellite rights, Internet rights, VCD/DVD rights,
etc.
(c) Agreements
Usually, all the agreements for the licensing and assignment of theatrical (cinema) rights are essentially fixed-
length contracts. The rights for a film are customarily sold to distributors for an initial period of five to seven
years. At the end of that term, the distributor has the right of first refusal on a renewal that can extend the
contract for another five years. At the end of this stipulated period, the producer gets back the licensed copy of
the film from the distributor. He can then give the same territory rights to other distributors.
In Hollywood, the type of rights that are granted to distributors are either primary or
secondary rights. Primary rights are usually the audiovisual exhibition and transmission rights in a film or
television production whereas secondary rights, which are also known as ancillary rights, give the right to sell
merchandise and publish novelizations of the screenplay.
In Hollywood, “negative pickupfunding” is a popular method followed for distribution deals. Negative pickup
means a sale or grant of distribution rights made prior to completion of the film with the distributor as a
means of obtaining financing for the film. The negative pickup method is used to secure a loan from a third
party, including a bank. Thus, the producer would normally have to satisfy the requirements of both, the
distribution and financial source.
From the distributor's viewpoint, the advantage of this arrangement is that the distributor obtains a complete
film containing certain agreed upon elements such as specific cast members, directors, length and rating for a
fixed sum of money payable only upon completion and delivery of the film. The distributor runs no risk of the
film going over budget, this being the producer's responsibility (which may in turn be passed along to the
completion guarantor). Any advance upon signing and/or during pre-production and production is usually so
nominal in comparison to the payment required upon delivery, that the distributor runs very little financial risk
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if the film is not delivered as and when promised. Most negative funders are established film finance
companies and have weekly checks to ensure all is according to the schedule.
Exhibition
Theater owners are the last link in the distribution chain. For a theatrical film, the principal method of
distribution is the exhibition of the film in cinema halls across the country.
In India, exhibition centers are available in various forms and sizes, ranging from open-air
facilities to thatched-roof rooms to air-conditioned and modern multiplexes. Most theatres in the country
possess only the basic facilities. Only a few theaters in major cities like Mumbai and Delhi possess
sophisticated equipment and sound systems. Amenities like canteens, parking lots and decent restrooms are
found only at a few select, well-run theaters.
The distributors enter into contracts with the theater owners/exhibitors for screening the film. The different
contracts entered into between them are as follows:
a) Theater Hire
The distributor pays the theater owner a fixed charge for screening the film on a weekly basis and earns his
revenue through ticket sales. In this type of arrangement, the distributor bears all the risk.
b) Fixed Hire
Under this method, the theater owner pays the distributor a fixed sum of money per week. Unlike theater hire,
here the risk is borne entirely by the theater owner. Irrespective of the film's performance, the theater owner
pays a fixed amount to the distributor.
c) MG + Royalty
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Here, the theater owner guarantees a certain amount to the distributor for screening the film. In the event the
film makes a profit (after the theater owner deducts his cost and payment of MG), the same is shared between
the distributor and theater owner in a pre-decided ratio.
d) Profit Share
The theater owner and the distributor share an equal risk, as the amount earned by the theater by way of ticket
sales is shared with the distributor in a fixed ratio.
Studios are the major distributors and have their distribution channels worldwide. They can
commit substantial sums of money towards prints and the advertising of a film compared to a smaller,
independent distributor who may be operating on a limited financial basis.
While many of the major film production companies have their own distribution arms to distribute their
product, both domestically and internationally, there are a number of independent film distribution companies
that engage in film distribution in various media and/or territories. Since most independents do not have their
own distribution arms, some distribute through companies, which have distribution facilities in certain states
or territories. Others book directly with exhibitors without using sub-distributors. The advantage of having the
security of committed distribution arrangements prior to commencement of production must be weighed
against the potentially larger sums of money, which may be obtained later if the completed picture appears to
have the potential of becoming a hit.
The following are the various ways in which a film in Hollywood can be released.52
Saturation Release
This is solely done by the major studios, which have the massive printing and advertising ("P&A") money to
book a screen in at least 1 out of 2 multiplexes in each city. This results in release of anywhere from 1,500-
2,500 prints..53 In 2002, 32 films opened in ultrawide release (more than 3,000 theaters) and 139 films opened
in wide release (more than 1,000 theaters).54 Spider-Man was released on 7,200 screens in 3,615 theaters and
Harry Potter was released on 8,200 screens..55 Considering the total 35,506 screens in 2002 in the US, these
films played in one out of every four-five screens. Such saturation releases can shut-out many smaller films
that rely on word-of-mouth.
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Limited Release
This is when a film opens in just a select few theaters in the major markets like New York, Los Angeles and
Chicago Then, if it is well received at the box office, it makes its way into a smaller scale of a platform
release.57
Market-by-Market Release
Usually the ideal candidate is a good-to-excellent small film that a mid-size distributor has picked up the
rights to but does not have the capital for a Saturation Release of 1,500-2,500 prints. This distributor will
make 20-40 prints and play it in one region after another over 12 months until the territory of North America
(USA/ Canada) is eventually saturated.58
Art House Release
Foreign films and small film noirs (like a film made by Merchant-Ivory) are in the classification distributed
via art houses. In every large city there are 1 -2 art houses (small old cinemas) seating 100-200 people.59
Four Walling
This occurs when a producer circumvents a distributor and literally goes from town-to-town renting, the 4
walls of the theater directly from the theater owner, bringing his own print, placing his own ads, and sitting in
the box office collecting every penny (if any) for himself, thereby cutting out the middlemen.
Non-Theatrical
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This category comprises films that go directly to video, foreign sale, cable, hotel/motel, pay-per-view,
broadcasting (TV), foreign television, multi media, web, and net markets for revenues.
Profit Definitions & Deals
(a) Profit Definitions
In Hollywood, terms such as "gross profits" or "net profits" are commonly used and carefully defined. Studios
and major distributors have definitions of "net profits" which go on for pages. The definitions will vary from
studio to studio. The terms only have meaning in connection with the specific definition. These are essentially
contract definitions, not any standard accounting term, and do not by any means indicate that the "profit
participant" will indeed see a profit, even if it appears to the public that the film is very successful, and even if
the studio appears to have made significant sums of money on the film.
The arrangements between distributor and exhibitors tends to be a percentage arrangement, with floors and
ceilings. These arrangements cushion the blow of a film that does not do well and allows for advantages for
the exhibitors if it does well.
Typically, the split between distributor and exhibitor may be up to 90% to the distributor after the exhibitor
has taken care of its overhead figure ("nut"). The percentage may initially be much lower. The popcorn and
snack concession is the profit center for the theater.60
(b) Deals
Predominantly, there are two kinds of arrangements in practice for the sharing of revenues in Hollywood:
(i) Gross deals
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Usually the first sums earned by a film are from box office receipts. The distributor and exhibitor of the film
enter into an agreement which makes reference to the 'Exhibitor's Gross,' i.e. 100% of all the sums received at
the box office. From the Exhibitor's Gross, a deduction, which is the 'Exhibitor's Percentage' (usually an
amount subject to negotiation between the exhibitor and the distributor) is made. The sum, which is then paid
by the exhibitor to the distributor, is the 'Distributor's Gross'. The eventual division of the Distributor's Gross
between the distributor and producer depends on the deal between them.
In a gross deal, the distributor deducts a commission based on the Distributor's Gross, out of which the
distributor also deducts all his expenses. A gross deal guarantees a flow of income from the first receipts but
the percentage due back to the producer is relatively low.
(ii) Net Deals
In a net deal, the distributor deducts his expenses from the Distributor's Gross and usually splits the remaining
in a 50:50 ratio with the producer. Sometimes, the distributor deducts the distribution commission based on
the Distributor's Gross and deducts its expenses from the producer's share of the Distributor's Gross before
sending the balance to the producer.
(c) Illustration
Today, as a practice, when one buys a film ticket at a box office, around for example, US $8, the theater (the
Exhibitor) immediately takes about 60% of this amount ("Box Office Gross") and turns over the remaining
US $3.20 to the studio/distributor who released the film. The theater is fully or partially, directly or indirectly,
owned by the studio/distributor. The studio/distributor charges its "distribution fee" of about 33% against this
US $3.20 leaving US $2.14 from the US$8 ticket sale.
The studio/distributor then reimburses itself out of this US $2.14 for anything it spent on P&A, and all other
expenses relating to distribution of the film. If the said expenses amount to 20%, which is charged against this
US $2.14, a mere US $1.71 would be all that's left. This means that from the US $8 ticket sale, US $1.71 is
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now available to turn over to the producer, provided the studio/distributor does not also have participation
rights in this sum as well, reducing such cash flow to zero.
This US $0.00 to US $1.71 is what is known as "points" or, in certain circumstances, known as "producer's
net." The producer now has to split the US $1.71 with its film production investors, usually 50-50 leaving US
$.86 for all the producers/ writers/ directors talent/ development investors and a mere US $.86 for all the
production investors, from that original US $8.00 ticket!61
New Trends
Be it Hollywood or Bollywood, 2002 was the year of the niche-buster. Films such as Bowling for Columbine,
One Hour Photo, Monsoon Wedding, My Big Fat Greek Wedding, (which was the highest-grossing
independent film ever with US $228 million in box office receipts, taking only US $5 million to produce),
Empire, Y Tu Mamá También" (This Mexican film unfortunately lost out against El Crimen Del Padre Amaro
for a chance of Oscar nomination in the foreign film category due to the controversial practice of the
Academy to include only one nominated film per country) made 2002 one of the most successful years ever
for specialized fare and has given studios the financial incentive to make and distribute more small-budget
films.
Of course, the year's blockbusters, like Spiderman, The Lord of the Rings: The Two Towers and Star Wars:
Episode II -- Attack of the Clones, were the dominant players at the box office, and no one expects
Hollywood to retreat from its heavy reliance on sequels and big-budget films.
In 2002, specialized films62 accounted for nearly 7% of the market a 3% increase from 2001. While Greek
Wedding accounted for most of that jump, each of the top 10 specialized films grossed more than US $10
million. Despite their modest size or "indie" style, most of the year's successful, specialized films each had a
big studio behind them. The diverse array of potential audiences is what prompted the studios to form their
specialty divisions in the first place.63
The film industry is also taking advantage of the proliferation of cable-TV outlets to reach niche audiences.
Audiences are now going to see more of the higher-concept-marketable-lower-budget-niche films being made.
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MGM's Barbershop, which cost only US $12 million to make and an additional US $10 million to market,
made more than US $75 million. Universal, along with its Latino specialty arm, Arenas Entertainment, made
a bundle on the urban drama Empire, which cost US $650,000 to acquire and has gone on to make more than
US $15 million.64
As Jeff Blake65 said, "If they are made at the right cost, then that is a very good business and a satisfying
business to be in.”
Similarly, Bollywood also has been witnessing the rise of non-mainstream cinema with Mira Nair's Monsoon
Wedding grossing about US $14 million in North America. Gurinder Chaddha's Bend it like Beckham
emerged as the event picture of the year and continues to run in theaters to date, with audiences and critics
being bowled over with this winning film's charm. Worldwide, Bend it like Beckham grossed US $25million.
Similarly, Deepa Mehta's English film Bollywood Hollywood caught the attention of mainstream audiences
and the mainstream media in Canada and the film grossed an impressive US $1.2 million on about 40 screens
in four weeks and grossed US $250,000 in the United States.66
WELCOME TO MARKETING YOUR MOVIE
MARKETING: The process of identifying and reaching specific segments of a population for the purposes of
selling them a product or service
The hardest part of being a film maker is getting the world (or your neighborhood) to see your film. We
understand your pain and are here to help you. On these pages, you will find useful ideas, brainstorms and
ramblings to help you market your movie and draw attention to it. All of the tips come from professional
movie marketers who have been there, so you know what you read is coming from the trenches and have
worked. People ask Film Baby all the time why their film is not selling. That is the million dollar question and
the reason we went out and put together this page.
FILM IN THE CAN: Distribution and a Side of Fries
71
If you are looking for home video distribution, there are a couple of companies out there that can help you.
Below is a list and links of ones that we know about. We have never worked with any of these companies
personally, these are not our recommendations, just a list:
--> Ingram Entertainment
--> Baker and Taylor
--> Anchor Bay Entertainment
--> Moving Images Distribution (Canada)
--> Canadian Filmmakers Distribution Centre (Canada)
--> Canyon Cinema
--> First Look Media
FILM IN THE CAN: Replication and the DIY Way
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The best thing about making a movie is having people see it. Well what is the best way to do that? You have
two options when it comes to putting your finished product onto DVD, each with their own pros and cons. So
enough of the small talk, lets get started.
DVD REPLICATION
--> Lets get this out of the way. Who to use? This is who WE recommend you use!
PROS:
--> Amazing quality and a finished product that is retail ready and that is important. The best part, your
looking at a cost of less then $2.00 per disc. Once replicated, if you put your film next to any film in
Blockbuster, Best Buy or Wal-Mart , no one is going to tell the difference between your DVD product and
Sony's project. And at the end of the day, that could be the deciding factor for someone to buy your film, the
packaging.
--> No Hassles with burning one off DVD's. If some store wants 100 copies to sell, your not up all night
burning and printing and cutting. Need more hassles: dealing with labels, printer ink, red fingers, the DVD-R
look, driving to the store to buy supplies,
-->Better creative options. Make inserts, put holograms on your DVD, custom packaging, and more.
--> Sell your first run, just pick up the phone and have more made! Some one in China loved the film,
orders 10,000, just pick up the phone and have more made. The replication house will always have your work
on file and can be replicated in a jiffy.
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--> Don't need to know anything about making chapters, transfer or anything, they handle it for you!
CONS:
--> A lot of money up front. Your talking $2K before you even see a DVD.
--> You lose a bit of indie. Replicated DVD's make your film official and retail ready and in a way, a little
more corporate. I must admit, I love the DVD-R some times and I will tell you why below!
-->Might be stuck with 1000 DVD's in your garage. Truth is, if you don't do anything to get the word out
there about your film, you will have 10 boxes of DVD's sitting in the corner of your basement, garage or
kitchen. Harsh, I know, but it is a con!
DOIN IT DIY @ HOME (DVD-R)
PROS:
-->Technology is getting GOOOOOOOOOD. Need evidence? Enter Lightscribe!
-->Keep ALL the creative control over your product. Because everyone is hand made, each one will have
its own flavor to it. Some people call them errors, others call them collectibles
-->You believe in the film, but have no money! You know this film is going to be big, but you need to start
small. Sit at home and get it going. Just please, please, please, DO NOT USE A SHARPIE on your DVD-
R!!!! PLEASE! A QUICK NOTE: DVD-R's are not as cheap as CD-R's and the machines are at least $200
for a decent one. You could spend a lot of money getting your DVD-R system set up. Figure out your costs
ahead of time
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-->Down Right Independent! What better to say your film is truly independent then by hand making them
yourself. Call them what you want: rare, limited edition, signed, custom created, you name it! Make the
people who are buying them feel special that they are getting a DVD-R.
-->As IBM says It's an on-demand world.
CONS:
--> Burning DVD's SUCKS! I used to do trade shows every week all over the country. In every region we
had different musical acts we were showcasing. So for each conference I had to sit at my computer and burn
100 CD's each week. IT SUCKED. There is nothing you can do while it is going on. Your computer seems to
take EVERY bit of memory to do one simple task. Then I had to put the label on them, put them in jewel
cases. NO NO NO NO NO. Sorry, I will take some meds now.
--> If it smells like poo, looks like poo, then it is poo Your film could be Independence Day, but if it is on a
DVD-R, you might have put it on laser disc to some people. DVD-R makes people squeem. Like the feeling
when a band handed you their tape on a maxell. Plus, if it does not play in their player, well you lost a chance
to have people talk about your film.
-->You are going to work twice as hard to get recognition When sending a DVD-R out to press,
distribution companies, video stores, you need to have an amazing product or you are not going to be taken
seriously. It is just a matter of fact. They are looking for a nice finished product. So make yours nice!
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COMPONENTS
Producer Animal Suppliers Art Directors
Art Printers Artificial Plants Artists
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Dubbing Artists Costume Suppliers Singers
Actors Auditorium Cameramen
Cine Equipment Editing Rooms/Editors Colour Film Processing
Costume Designers Satellite Televisions Dance Directors
Directors Distributors Preview Theatres
Story Writers Gun & Bomb Suppliers Hair Dressers
Home & Mini Theatres Light & Light Fittings Lyricists
Graphics & Special Effects Stunt Artists Make-up Artists/Materials
Video Cassette ConversionMusic
Composers/DirectorsStunt Directors
Orchestras Outdoor units Public Relation Officer
Raw Film Suppliers Film Training Institutions Rain & Fog Machines
Shooting Houses &
Locations
Recording Studio
Equipment
Sound & Light Equipment
- Rentals
Film Trade Bodies &
Associations
Projection & Sound
EquipmentProduction Managers etc.
(Source: www.filmplusindia.com/categ.html)
5 MAJOR COMPONENTS
1. Direction
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The Director is responsible for executing the shooting process on the floor. His responsibility does not
begin or end with shooting. He is responsible for converting the ideas which are in the
form of words into visuals. The storywriter and the screenplay writer may be different
persons but the Director must be good in this department as well. The director is
chiefly responsible for shot-taking which he executes through his cameraman, thus
making it imperative for the director to have basic knowledge of camera, lighting and the visuals in general.
The actors are made to perform in front of the camera and with the help of body language and
dialogues, reveal the story to the audience. The director learns the art of handling the actors. The whole story
shot in bits and pieces are assembled together in accordance with the syntax of the film grammar with the help
of the editor.
In the selection of sound and music, the director has to make some conscious decisions and hence his
knowledge of these are essential too. The director brings out everyone’s talent and puts them together to make
a worthwhile programme.
The field of Direction is vast. It ranges from Directing Documentary films, News & Current Affair
programmes, educational and instructional films, advertisement and corporate films, entertainment, fictions,
soap operas and of course, feature films too.
2. Camera & Lighting Technique
The painter paints his canvas and his tools are pigments and
brushes. The cinematographer paints his canvas with lights and
records on film or video. Though the tools are different yet the end
results have striking similarities. Photography has it roots in
science, technology, art and aesthetics. Physics, chemistry,
engineering technology are the means to achieve the end, that is,
the aesthetics. Such a subject needs serious studies to achieve
high-end results.
The Film and Television technology is growing rapidly and every other day a new equipment is
released in the field. Therefore, people with camera should be prepared for latest developments in the field.
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The purpose of artistic lighting expands beyond merely illuminating the subject for exposure level. A good
lighting can make the subject appear better than what it meets the eye and good subject may look ordinary if
the lighting lacks aesthetics.
3. Video Editing & Sound Recording
The word Editor must not necessarily to taken as
reference to the technician working in a cutting room. It
simply refers to the person who is responsible for the
particular editing decision being discussed. The process of
editing is usually a far wide responsibility involving the
syntax of the film and television grammar. Editing is not
merely cutting and joining. In fact, the shoot material which
are shot in pieces needs to be put in order and joined together
abiding by the rules of the film and television grammar to convey the visual and aural message to the viewer
authentically.
4. Acting & Presentation
In almost all Film and Television programmes there is hardly any
programme where no actor is involved. It is through the actors the director conveys
his message or idea to the audience. The role of an actor cannot be
underestimated at any cost. Observation, imagination, body language, emoting
capabilities, verbal and non-verbal communications are the tools of an actor, which is more important than the
superficial beauty and glamour.
Acting for Film and Television is highly technical. The actor doesn’t perform in isolation and is
directly bonded to the camera, lights and microphone. Besides, his time and pace criteria are totally related to
the editing parameters. This makes it compulsory for a Film & Television performer to have the basic
knowledge of cinematography, editing and the Film grammar. It is this technology that makes Film and
Television acting so different from theatre. http://www.filminstituteindia.com/
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CORPORATIZATION AND FINANCING The film industry is one sector in India, operations of which have always remained under cloud,
mystery and suspicion. While producers dependence on underworld and hawala money (money transferred
unofficially) for financing has always been a known fact, it’s a different story that all Hindi films ultimately
end with the victory of “Good” and enemies of the nation, “Evil”, destroyed! The Film Industry on the whole
has always worked like small scale industries in the unorganized sector. For over five decades of its existence,
the industry did not produce any “Corporate Entity” worth its name.
While the bosses at the film industry have kept demanding more support from the government, policy
& regulatory framework and clean money from institutions for financing, they did little work in cleaning up
their balance sheets, income tax returns, disclosures and above all, incorporating their businesses. But the last
few years have seen some change.
The famed actor, Amitabh Bachchan called the Big B who promoted Amitabh Bachchan Corporation
Limited (ABCL) took the lead towards Corporatization of film industry in India. Though still an unlisted
company with shareholders and whatever its fate may be, ABCL set the example for others in film industry,
that things can be done in a little more organized way. Globalization, Software technology, TV programming
and the Music boom in India have since prompted several traditional players and industry majors to make
their operations more transparent and hence CORPORATIZE.
Scores of film producers, financers, distributors and associates, have now converted their businesses
into “Companies” under law. Some have already raised capital from the public and are now listed at major
stock exchanges, while several others propose to do the same.
Besides Zee Telefilms, some others who have successfully corporatized includes music leader Tips
Industries, Jitendra promoted Balaji Telefilms, Dheeraj Kumar’s Creative Eye, Sri Adhikari Brothers, RPG’s
Saregama, Pritish Nandi Communications and of course Subhash Ghai’s Mukta Arts.
Films Produced By Corporate Production HousesProduction House Film
Aamir Khan Productions Private Limited Lagaan
Zee Telefilms Limited The Hero
Balaji Telefilms Limited Krishna Cottage
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Mukta Arts Limited Yaadein
Yashraj Films Private Limited Dhoom
Padmalaya Telefilms Limited Suryavansh
Tips Industries Limited Fida
Venus Tapes & Cassettes Private Limited Josh
Devgan Entertainment Private Limited Raju Chacha
(Source: FICCI Report 2002 - Indian Entertainment Industry)
Still not many Film companies have availed finance from these sources. This is because corporate
structure in place is a pre requisite for such a venture. This means that the company has to clearly define the
following:
Documented scripts in place
Legally enforceable contracts with the artists and technicians
The entire time schedule documented
The producer has to make sure the filming activity is completed in time and there are no time and cost
overruns.
Apart from these corporatised players and a few reputed film producers who have a track record of
delivering successful films, other film-makers have to rely heavily on arranging financing for their films from
the unorganised market comprising “friends”, “relatives” and “private financiers” which is also difficult and
involves high cost of interest.
LONG TERM PROSPECTS
The long term prospects for the industry look bright. Though nascent at this stage, companies
promoted by serious promoters will also command a good valuation at the market. While domestic and
international investors have got an opportunity to invest in the sector, strong and positive signals have been
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sent to banks and financial institutions that the industry is changing. CII & CRISIL are also working at
developing a financing model that would enable the banks to weigh the risks in this industry.
It is now hoped that the ensuing restructuring and corporatization will usher in a new era in corporate
India and industry will flourish by producing quality products for its audience. The Indo-Italian Chamber of Commerce and Industry
INFRASTRUCTURE The infrastructure for films comprises of production, post-production and exhibition infrastructure.
Production & Post-Production Infrastructure here includes studio floors, film cities, laboratories and post-
production facilities. In 2002, India has 25 studios and three film cities. Studios are enclosed structures where
sets can be built for shooting. A studio floor should have the necessary dimensions to allow building of these
sets and provide the necessary acoustics for shooting. Mumbai being the hub of film production in the country
has the maximum number of studios.
However, most of the studios are not maintained due to lack of funds. Many like Famous Studios at
Andheri and Ranjeet Studio at Dadar in Mumbai have closed down. Besides, the studio floors are very small
and do not allow building of huge sets. For example, an average studio floor size in India is 100 feet by 150
feet versus the international standard of 220 feet by 350 feet. An Indian studio is spread over 5 acres and has
one or two studio floors whereas an
international studio is spread over a minimum of 500 acres and has more than 6-10 studio floors and hundreds
of locations. In fact, an international studio is akin to a film city in India.
Indian films cities do not come even close to international ones. For example, the Mumbai and Noida
film cities are spread over barely 40-50 acres of land and have only 20 locations each.
Perhaps the only international grade studio in the country is the Ramoji Rao Studio in Hyderabad, with
six studio floors. The film city is spread over 2,800 acres, of which 1,500 acres is developed and has over 100
shooting locations.
Post-production infrastructure like editing and dubbing suites are given as part of the overall package
to the production houses. Till recently, most of the equipment used in India was largely outdated. Now,
several specialised post-production studios like Empire Studio, Crest Communications, CMM and Pentamedia
Graphics have been set up which offer modern technology to producers. Players like Ramoji Rao and Rama
Naidu have already set up or are in the process of setting or investing in post-production facilities. They are
positioning themselves as end-to-end providers, wherein a producer can just come with a script and can take
away a readymade film from the studio, which is how it is done internationally.
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Post-production facilities have to keep pace with fast changing technology. Avid Editing Suites are
rapidly replacing the old Steinbeck editing systems. In fact, even Avid Suites are becoming obsolete and are
being replaced by computer-based editing suites like Adobe Premier.
Exhibition Infrastructure:
The number of theatres has not increased with a speed it should be increased in the last three years.
This is due to the high degree of piracy, low ticket rates, high incidence of taxes and levies, low collections of
theatre owners which prevent them from spending on renovation. Alternative profitable options for real estate
like retailing has led many theatres in Mumbai to be converted into shopping complexes and departmental
stores.
Another reason for the poor infrastructure is the high incidence of entertainment tax, which stands at
an average of 25 per cent for the country as a whole. In fact, in Maharashtra, it is as high as 60 per cent.
Gujarat has an incidence of 100 per cent, while Madhya Pradesh has a tax rate of 75 percent. If one were to
reduce the entertainment tax, one would easily see the improvement in exhibition infrastructure. Andhra
Pradesh is such an example. With 12 percent average entertainment tax rate, the state has the highest number
of theatres and a very flourishing film industry notes Uday Singh, Managing Director, Colombia Tristar Films
of India. Even a country like China, which has a highly regulated market and produces far less films than
India, has 65,000 theatres.
Entertainment Tax Rates In Asian Countries
Country Percentage
Honk Kong 0.00
Indonesia 25 – 30
Japan 3.00
Korea 16.60
Malasia 30.90
Phillipines 33.00
Singapore 3.00
Taiwan 7.62
Thailand 7.00
Source: FICCI Report 2002 - Indian Entertainment Industry
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SCREENS
As compared to approximately 36,000 screens in the U.S., there are around 13,000 cinema screens in
India. Most of the cinema halls in India operate in an unorganised environment and are owned by individual
businessmen. More than 95 per cent theatres are single screen and stand-alone. However, the industry has
recently seen the entry of organised corporate players.
Priya Village Roadshow Ltd., a joint venture between the New Delhi based Bijli Group and Australian
media and entertainment conglomerate, Village Roadshow Ltd., was the first organised corporate player in
this space. E-City Entertainment India Limted, Inox Leisure Ltd. and Adlabs Ltd. are other corporates who
have ventured into this space in 2001.
Till 1997, the concept of housing more than two screens in one theatre was non existent in India. Priya
Village Roadshow Ltd. pioneered the concept of world class multiple screen cinema halls in India by opening
their flagship property, Anupam-PVR, in New Delhi in 1997.
In the last two years, the state governments of Gujarat, Rajasthan, West Bengal and Maharashtra have
announced entertainment tax exemptions on new multiplexes which has resulted in an increase in the
development of multiplexes in these states.
With a population totalling more than 1 billion, 13,000 screens translates into a measly 13 screens per
million of the population. This is far below global averages.
India has witnessed a sharp decline in cinema attendance in the last 10-15 years due to three reasons,
namely poor cinema content, poor film exhibition infrastructure and rampant piracy.
However, the film exhibition industry in India is expected to grow rapidly over the coming years due
to continuous positive developments in the area of film content (which is improving), film exhibition space
(which is witnessing development of multiplexes with as many as 200 multiplex screens planned in the near
future) and a sustained clampdown on piracy (which is likely to result in a decline in the frequency of
watching films in homes through alternative media platforms). These three factors are likely to lead to higher
cinema
attendance in India.
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OVERSEAS MARKET
Mr. Supran Sen, Secretary, Film Federation of India speaking about the export market for Indian films
says that the U.S. and Canada are major markets for Indian films accounting for 30 per cent of exports,
followed by the U.K. accounting for 25 per cent, Mauritius for 10 per cent, Dubai for 10 per cent and other
countries accounting for the remaining 25 per cent. The U.S. market is specially good for sentimental films, as
well as China and the East European countries like Hungary and Czechoslovakia. Russia is another major
market for Indian films.
Co-production is also an important new feature of the industry with a few U.S. companies showing
interest in co-production as well as the U.K., Canada and Singapore.
Speaking about the export market, an important aspect of the internationalisation of the Indian film
industry, Mr. Nandkumar Bele, Secretary of the Indian Film Exporters Association, says that exports started
way back in the early sixties and the Association was set up in 1963 to facilitate exports. The major exporters
he named, are Eros Multimedia which is the biggest exporter of Hindi films followed by CA Corporation, Fair
Deal International Pvt Ltd. and other exporters like Venus Records and Tapes PL, Tips Exporters and Yash
Raj Films. The bulk market is in the U.S. the U.K. and Canada and films are also regularly exported to
Mauritius, Fiji, New Zealand, Australia, Malaysia, Indonesia, Singapore, Hongkong, Dubai, Tanzania and
Kenya. Some exporters such as Eros, Yash Raj Films and Fair Deal have offices abroad.
Rajnikant is a super hero in Japan and his film, Muthu was a super hit in Japan and was subtitled in
Japanese. The Chinese market is also an interested market and the Chinese who have a strict censorship board
are mainly interested in family films and romantic films.
The South African film makers are interested in co-producing with Indian film producers and the
South African Government is offering various facilities for shooting of Indian films in that country.
There are two problems faced by exporters which come in the way of Internationalization. A major
problem is piracy with the emergence of the latest technology tools like Digital Versatile Discs (DVD). For
instance 30,000 copies of DVDs appeared in the American market barely a week after the theatrical release of
the film Devdas there. Similarly, pirated cassettes of Indian films appear in the Pakistani market barely 2 or 3
days after they are released internationally. Malaysia is another big centre for piracy of Indian films. This
phenomenon is a major dent in export revenues for film exporters.
Another problem is that of income tax. Earlier, the film makers used to get exemption for export
earnings raised abroad under Section 80 HHC of the Income Tax Act of 1960. An interpretation put forward
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by an Income Tax Officer that this exemption does not apply to exports of films because the rights of the
films are given on lease and thus they are not outright sales (this section applies to sales) and since the rights
in the film assigned are intangible and not on a par with other foods or merchandise, was made the basis of the
removal of this exemption since 1995. Assessed and completed cases were thus opened up and many
exporters had to pay income tax for 5 to 7 years along with penalties. This was a major setback for several
exporters whose liability was high as well as for small exporters who were badly hit by this interpretation.
After representation by the industry to the Government, while this provision was no longer made
applicable, the new provision under Section 80HHF introduced and allowed tax exemption of 100 per cent in
1999-2000, 80 per cent in 2000-2001, 60 per cent in 2001-2002, 40 per cent in 2002-2003 and 20 per cent in
2003-2004.
While the Government on the one hand wants to encourage exports of Indian films, on the other hand
it wants to tax it heavily. The concessions for instance given to the IT industry are not given to the film
industry, even though the Government has recently given it industry status.
Mr. Mohan Chhabria, Director, Fair Deal Exports Pvt. Ltd., a leading exporter of Hindi films says in
the last three to four years there have been two developments that have helped with the internationalisation
and exports of films. One is that the Indian industry has technically reached the standards of America and
secondly content wise, the films are now getting into subjects which are universally liked.
Mr. Chhabria states that if you have a good product, the middlemen and importers in the business,
mostly people of Indian origin settled abroad approach the exporters themselves. Recently, Australian TV
approached Fair Deal for buying the films Dil Chatha Hai and Hum Dil Chuke Sanam.
Sometimes the suppliers meet the buyers at festivals. New markets are also often opened up by
participating in festivals. However, the cast of the films is important and certain stars like Shah Rukh Khan,
Salman Khan, Amir Khan, Hrithik Roshan, Amitabh Bachchan and Sanjay Dutt are more in demand abroad. The Indo-Italian Chamber of Commerce and Industry
According to Pravinder Bhatia, assistant vice - president, corporate finance, Ernst & Young, the
overseas market is more lucrative than the Indian one. For instant, Kal Ho Na Ho grossed nearly Rs 20,000
crores and Lakshya about Rs 8 crores in ticket sales alone in the UK & US. And then there is the additional
revenue generated by the sale of audio & video CDs. Times of India
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