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Discuss Bollywood within the Understanding Cinema forums, part of the BMM Paradise for Bachelors in Mass Media Forum category; Filmed entertainment is the most popular form of entertainment in India. It is this undiminished passion through the decades that ...

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Sunanda K. Chavan
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Bollywood - September 3rd, 2010

Filmed entertainment is the most popular form of entertainment in India. It is this undiminished passion through the decades that has driven us 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 industry has taken several strides on the path of progress since the 1930s.

From film shooting to post-production to creation and projection of image and
sound track, it has developed into a sophisticated state-of-the-art process, with the industry increasingly adopting digital technology.

Indian films are nowadays regularly screened at International film festivals and several films have won awards; Devdas, the latest Indian film which was in the running for the Oscar nomination, bears testimony to Indian expertise.

Breakthroughs have been made in film insurance and film financing with films being accorded industry status by the Government of India (GOI). The setting up of multiplexes has created a revolution in film exhibition, spurring growth in admissions.

However, the industry is still largely unorganised, non- transparent, and centred around individuals rather than corporate entities. It is also grappling with regulatory problems such as high entertainment tax, high piracy levels and restrictions on ticket pricing.

An American university offers Indian films as a subject for post-graduate studies. Retrospectives and seminars on Indian films are a regular occurrence on the international cultural calendar.

Indian entertainment is truly a global phenomenon today. With a population of over 1.1 billion, every sixth person in the world is an Indian. It is not surprising that there are about 25 million people of Indian origin spread across 120 countries in the world and 40 million from the sub-continent – all ardent fans of Indian entertainment.

Many of these migrants have strong familial links with their motherland but
almost all of them have at least a few tenuous roots in their ancestral home. These roots invariably go back to their food, language On a per screen average, Indian, especially Hindi, films feature in the Weekly Top 10 list in all these markets.

From a mere 20 prints a decade ago, big films release upward of 400 prints in the overseas market today. Whether cinema reinforces regressive social mores or merely reflects popular tastes is a moot point.

Many film makers like Yash Chopra, Subhash Ghai, Karan Johar and Sooraj Barjatya, conscious of the large overseas market for Indian films, have been replicating the celluloid dream world in film after film with huge success.

It is difficult to accurately determine the size of the industry because unlike in the developed economies such as the US and the UK, 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 based approach

This comprises artists’ remuneration, production expenses, technicians’ expenses, marketing expenses, studio charges and other fixed costs. According to industry experts, the total costs of the industry in 2001 was estimated at Rs25 billion for the production of 1,013 films. This represents a 16% increase over the total costs in 2000 for 855 films. The cost per film in 2001 has remained more or less the same as in 2000, barring other regional films, where the cost per film increased substantially by 50% from Rs5 million to Rs7.5 million.

Revenues-based approach

The industry gets revenues from domestic theatrical sales, sale of overseas rights, sale of music rights, sale of television and video rights, corporate sponsorships and merchandising. As per industry experts, the total revenues of the industry from these sources are estimated at Rs 45bn.

To understand the Box Office flow in the industry, one has to be cognizant of the three essential parties that are involved in the commercial screenings of a film in India. They are: the producer, the distributor, and the exhibitor.

1. The Producer - The producer is the individual or entity who finances and organizes the logistics of the entire film project. He is responsible for raising the funds and making the necessary investments into the cast, crew and equipment that are integral to the making of the film.

2. The Distributor - Once the film is complete, the producer sells the theater screening rights to his film to a distributor in one or more territories of the Indian market. A big chunk of the producer's revenue comes from the price he is able to sell his film at to the distributor.

3. The Exhibitor - Once a distributor has the rights to a film for a given territory, he needs to get the prints out to individual theater halls in that territory, so that the film can be screened to the audiences. This is where the exhibitor comes in. The exhibitor is the person who controls cinema hall(s) in a territory. The exhibitor buys the prints from the distributors, usually using a Minimum Guarantee (MG), meaning the exhibitor agrees to pay the distributor a certain GUARANTEEED amount regardless of how the film fares. Obviously the higher the minimum guarantee, the safer it is for the distributor and the riskier it is for the exhibitor, but usually the minimum guarantees are standard rates across the board.

To get his film to reach out to us, producers need distributors and exhibitors. Distributors are the link between the producers and the exhibitors. They acquire films from producers and and screen them in different theatres. Except Rajshri Films, Yash Chopra & Subhash Ghai no production house has a chain of distribution.
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