The Indian Bollywood Industry 2012

Ejvind Vøgg – Own Man in India

The Indian Bollywood Industry

DIBD – OMII Own Man In India May 2012

Indian Bollywood Industry

Introduction to the Indian Bollywood Industry

• Current market situation

• Revenue distribution

• Product placement in Bollywood movies

• Celebrity endorsement, management and brand ambassadors


Current market situation • Bollywood is the most well-known film

producer in India, and therefore the name is often used to describe the whole film industry in India even though the industry is divided into many regional areas. The Bollywood production takes place in Mumbai earlier referred to as Bombay, hence the name Bollywood. The name also reflects the American counterpart – Hollywood.

• Bollywood is the largest film producer in the world. They produce roughly 1000 movies a year. Hollywood only produces 500 and Japan produces 400 movies a year.

• The Bollywood industry had a revenue of US$ 3bn. in 2011, and has been growing at approx. 10,1% a year. The revenue is expected to reach US$ 4.5 bn. by 2016.


Current market situation • Bollywood films are not only watched by people

in India, also neighboring countries like Pakistan, Bangladesh, Nepal, Pakistan, Sri Lanka watch the movies. Moreover, countries with large groups of Hindi and Urdu speaking nationalities like Australia, UK, Africa and the US have many Bollywood fans. And lastly old trading partners like Russia and Japan are also buyers of Bollywood productions.

• The top five male actors receive between US$ 6 to 16 million a movie vs. female actresses that only receives about US$ 1 to 1.5 million a movie.

• Revenue generated from the ticket sales is only a small part of the industry. Celebrity endorsement and management have long been the major profit base for the industry as well as product placement that is becoming far more popular to integrate into the movies.


Revenue growth

Revenue in US$ bn

0

0,5

1

1,5

2

2,5

3

3,5

4

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12


Sources of revenue

Film Industry Revenue measured in percent

Domestic Theatrical 74 %

Overseas Theatrical 7 %

Home Video 3 %

Cable and Satellite Rights 11 %

Ancillary Revenue Streams 5 %

Total Industry Size 100 %


Key drivers

• Growing middle class income - 300 million out of a population of 1,1 billion,

• High return on investment

• Low costs of production

• Many Indians living abroad

• Increased importance of regional cinema

• Increased demand for multiplex theaters

• Indirect profits from product placements, celebrity endorsement etc

• Favorable demographic changes

• Higher quality and awareness of the films produced:

• ‘Slumdog Millionaire’; an International production has created a synergy

to Bollywood

• ‘Ra.One’ released in 2011; Price USD$ 30 million - most expensive

Bollywood production

• ‘Peepli Live’; nominated at the Sundance Film festival 2010 and

nominated for the 2011 Oscar nomination in the category of ‘Best

Foreign Language Film’


• Bollywood and it’s A-list actors have the same status in India as royalties, presidents, film and rock stars have in the West

• Bollywood and Hollywood are opening up to each other

• Bollywood to Hollywood

• Anil Kapoor in ‘Slum Dog Millionaire’ and later in ’24’

• Aishwarya Rai Bachchan in ’Pink Panther 2’ with

Steve Martin and ‘The Last Legion’ with Colin Firth

• Hollywood to Bollywood

• Ben Kingsley in Teen Patti (Three Cards)

• Sylvester Stallone in ‘Kambakht Ishq’

• Jennifer Chambers directed ‘Hiss’

Bollywood actors & actresses in Hollywood and vice-versa


• Reliance Big Entertainment signed a deal worth US$ 1.2 billion with Steven Spielberg’s ‘Dream Works SKG’ to produce 36 films for the next 6 years

• Reliance also acquired around 200 theatres in 28 locations in North America to screen Bollywood and other regional movies from India.

• Walt Disney has invested around US$ 324 million in a deal with Yash Raj Films.

• Ramesh Sippy Entertainment has collaborated with Warner Bros.

• Warner Bros has also signed a three movie deal with People Tree Films and a one film tie up with Tandav Films

Bollywood company tie-ups/collaborations


• Within the last ten years Bollywood has become more international and begun to focus much more on targeting the global audience and environment.

• Bollywood has realized the necessity to create an ambience and environment in the movies, so the movies are able to target both the Indian culture as well as a more international culture overseas.

• Many younger Indians in India and elsewhere are very aware of the Western culture, therefore Bollywood tries to catch this attention with product placement of Western products in the movies.

Product placement in the bollywood movies

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Product placement in the Bollywood movies

• ‘Audi Q7’ was placed in the major box office “Bodyguard

(2011)”. The goal was to create awareness of the newly

introduced car brand in the Indian market

• The prominence of ‘Starbucks’ in ‘Kabhi Alvida Na

Kehna (2006)’ where the target of the placement was

the audience outside India

• The box office ‘Om Shanti Om (2007) included many

different brands like Exide, Tag Heuer, Maybeline and

MTV

• Even real life matrimonial wedding sites gets mentioned.

In the movie ‘Namastey London’ (2007) the website of

the Bharatmatrimony.com is mentioned as having the

highest reliability in finding your new partner

• Other brands being product placed: Coca Cola, Pepsi,

Pizza Hut, Toyota, Mercedes, ESPN, Sony Vaio, Sony

Handycam, Nikon, Kawasaki, Nokia, Sony Erickson,

Calvin Klein, Goodyear, Castrol and many more


Endorsement, management and ambassadors

Priyanka Chopra - Vera Moda

SachinTendulkar – Royal Bank of Scotland

SachinTendulkar – Adidas

Priyanka Chopra - LEVIS

• Celebrity endorsement is not restricted to Bollywood, but highly used for anybody who makes India stand out; cricket players and other sport medalists •It is not rare that a brand ambassador is also endorsing a wide range of other diverse products •Celebrity management is not only commercial functions but does also include celebrities being present at private weddings, birthdays etc. – all functions has different rates

Shah Rukh Khan – Tag Heuer aishwarya rai bachchan –

L’Oreal Shah Rukh Khan- Hyundai

Mahendra Singh Dhoni – Reebok


Danish contact in India

• If you are interested to hear more about India and the rising bollywood industry’s possibilities do not hesitate to contact:

• EjvindVøgg – director of the DI office in India:

• E-mail: [email protected]

• Phone: +91 9930 562729/ +45 2728 0486

mailto:[email protected]

The Indian Bollywood Industry 2012

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