Description
ROLE OF FILM AND TV INDUSTRY IN OUR ECONOMY
PROJECT REPORT
ON
ROLE OF FILM AND TV INDUSTRY IN OUR ECONOMY
Submitted to: Dr. Tapan Kumar Nayak Associate Chairperson PGDM (General) IMS C-238, Lal quan GT road, Ghaziabad- 201009
Submitted By:Gaurav Rastogi (076) Gaurav Sharma (077) Harshit Suri (078) Hemant Trivedi(079) Hina Gupta (080) Section – B, PGDM IIIrd
1
DECLARATION
We hereby declare that the Project entitled “Role of Film and TV Industry in our Economy” submitted to Dr. Tapan Kumar Naik (Faculty Member) Business and Economic Policies, IMS Ghaziabad in partial fulfillment for the award of the degree of PGDM and the project has not previously formed the basis for the award of any other degree, diploma, associate ship, fellowship or other title.
Gaurav Rastogi (BM-011076)
Gaurav Sharma (BM-011077)
Harshit Suri (BM-011078)
Hemant Trivedi (BM-011079)
Hina Gupta (BM-011080)
2
ACKNOWLEDGEMENT
With our sincere regards, we wish to acknowledge our indebtness and gratitude to the contributions of people who helped us at every stage of the project. We are very much like to express our gratitude and profoundest thanks to our project guide Dr. Tapan Kumar Nayak (Associate
Chairperson PGDM IMS, Ghaziabad) for their sustained guidance, invaluable suggestions and constant encouragement without which it would not have been possible for us to complete this project.
3
TABLE OF CONTENT
1. Introduction (a) Film industry in India (b) Regional Films in India (c) Brief history of Film industry in India (d) TV Industry in India 2. Objective of the study 3. Literature review 4. Role or Importance of Film industry in India 5. Prospects of Indian film Industry 6. Major problem of Indian film industry
4
INTRODUCTION
The film and industry consists of the technological and commercial institutions of filmmaking: i.e. film production companies, film
studios, cinematography, film
production, screenwriting, pre-
production, post production, film festivals, distribution; and actors, film directors and other film crew personnel. Though the expense involved in making movies almost immediately led film production to concentrate under the auspices of standing production companies, advances in affordable film making equipment, and expansion of opportunities to acquire investment capital from outside the film industry itself, have allowed independent film production to evolve.
Film Industry in India
? India is the largest producer of films in the world. ? In 2009, India produced a total of 2961 films on celluloid that include a staggering figure of 1288 feature films. ? Films are made in different 20 languages. ? With 3.3 billion tickets sold annually, India also has the highest number of theater admissions ? Indian film industry is multi-lingual and the largest in the world in terms of ticket sales and number of films produced.
5
? The industry is supported mainly by a vast film-going Indian public, and Indian films have been gaining increasing popularity in the rest of the world—notably in countries with large numbers of expatriate Indians. ? Largest film industry in India is the Hindi film industry mostly concentrated in Mumbai (Bombay), and is commonly referred to as "Bollywood", an amalgamation of Bombay and Hollywood. ? The other largest film industries are Tamil cinema and Telugu cinema which are located in Chennai and Hyderabad and are
commonly referred to as "Kollywood" and "Tollywood". ? The remaining majority portion is spread across northern, western, and southern India
(with Punjabi, Bengali, Marathi, Oriya, Malayalam, and Kannada). ? However, there are several smaller centers of Indian film industries in regional languages centered in the states those languages are spoken. Indian films are made filled with musicals, action, romance, comedy, and an increasing number of special effects.
6
Regional Flims in India
Mainstream Cinema in India is dominated by Hindi language film which typically makes up a significant portion of total box office collections. However, over the past few years, regional films have been growing popularity with releases in a great number of theaters both within and outside the Indian Territory. Within regional languages, south Indian segment is an important market in terms of number of film releases with the four southern states comprising Andhra Pradesh, Tamil Nadu, Karnataka and Kerala together accounting for a majority of the total number of film releases in India. Other regional language markets in India include films made in Bengali, Bhojpuri, Marathi, Punjabi etc. The total domestic box-office collections from regional language films in India are estimated to be about Rs. 1,508 crores.
7
Brief History of Film Industry in India
? 1896: First moving picture showed in India ? 1913: - first Indian-made feature film (3700 feet long) released ? 1931: India's first talkie, Alam Ara released dubbed into Hindi and Urdu ? 1930s and 1940s: i) Talkies addressing social differences of caste, class and the relations between the sexes were released ii) Radical cultural organizations led to the formation of All India Progressive Writers Association and the Indian People's Theatre Association (IPTA) ? 1950: Calcutta becomes the vanguard of the art cinema ? 1951: industry became the object of considerable moral scrutiny and criticism, and was subject to severe taxation ? 1960s: i) popular cinema had shifted its social concerns towards more romantic genres ii) The period is also notable for a more assertive Indian nationalism.
?
1970s: By the beginning of the year there existed above150 film societies all over India.
? 1980s: the films took a stronger stance on the social issues with an outpouring of the social conscience, and flowing of new images.
8
? 1990s: In the 1990s, video, national and satellite/cable television have resulted in the development of a prolonged crisis in India’s movie industry, where commercial and art films are equally at risk of failing at the box office.
9
TV Industry in India
? Television is one of the major mass media of India. ? India is the second-largest pay-TV market in the world, with 108 million subscribers and a reach of 48% of Indian households ? It is a huge industry which has thousands of programmes across Indian states ranging from national language to regional ones. ? The small screen has produced numerous celebrities of their own kind some even attaining national fame. ? Approximately half of all Indian households own a television. ? As of 2010, the country has a collection of free and subscription services over a variety of distribution media, through which there are over 515 channels and 150 are pay channels. ? According to Pioneer Invest corp, the Indian cable industry is worth 270 billion (US$ 5.94 billion) and is the third largest in the
world after China and the US. ? The number of TV homes in India grew from 120 million in 2007 to 148 million in 2011. ? Cable reaches 94 million homes with 88 million analog connections and 6 million digital ones, while DTH has commanded 41 million subscribers.
10
Objective of the Study
The main objectives of the study will be: 1. To know importance of Film and TV Industry with respect to Indian Economy. 2. To evaluate performance of Film and TV Industry. 3. To figure out the problems and issues related with Film and TV Industry. 4. How this industry is helping other Sectors of the Economy?
11
Role or Importance of Film and TV Industry in our Economy
Film and TV industry is one of the important contributors to the economy and plays a very important and critical role in economic development due to the following reasons: ? Contribution of Film and TV industry to the GDP was 0.532% ? The combined revenues of film and TV industry was around Rs. 50,000 crore (USD 10.00 billion) in the calendar year 2011. It is expected that it will be around Rs. 54,000 crore (USD 11.00 billion) in the calendar year 2012. ? The film and television industry in India is one of the world's largest markets in terms of number of consumers and offers significant growth potential. Over the past few years the industry has experienced rapid double-digit growth and it is expected that this trend will continue in future, resulting in increasing contribution to the Indian economy. ? The sector has a total output more than $20 billion (Rs 1,00,000 crore), contributing more to the Gross Domestic Product (GDP) of India than the advertising industry. ? Film and TV industry creates more than 2 million jobs (directly or indirectly) in the economy.
12
Prospects of Indian Film Industry
? Growth is expected to come from the expansion of multiplexes in smaller cities, investments by foreign studios in domestic and Regional productions, the growing popularity of niche movies and the emergence of digital and ancillary revenue streams. ? Rise of multiplexes: Multiplexes continue to gain prominences across major Indian cities and companies have lined up investments to accelerate multiplex penetration in smaller towns. The number of multiplex screens is expected to double in the next five years, from 900 to 1,775 screens. ? Digitization is providing scale and reducing piracy: Digital prints cost 80% less than conventional film prints, allowing producers to reach five times the number of screens at the same cost. This has significantly improved realization, as 60% of boxoffice collections are now earned within the first week of a movie’s release. Digital cinema allows companies to control exactly where movies are showing and how many times they are shown. It also expands the reach of releases, from large cities to remote towns and villages across India.
13
? Emergence of new sources of revenue: In the last few years, the window available to monetize a film’s revenues at the box office has shortened considerably. This is driving film studios to exploit ancillary streams of revenue such as pay-per-view, mobile, online gaming, and licensing and merchandising. The revenue from these ancillary streams and cable and satellite (C&S) rights are projected to grow at a CAGR of 16% from 2009 to 2014.79 The pre-sale of satellite and home video rights has also gained momentum. ? Regional-language cinema forms an integral part of India’s film industry: 60% of all movies produced in India are in the four South Indian languages of Telugu, Tamil, Kannada and Malayalam.80 This market is witnessing rising investments from Indian and foreign studios, with a gradual shift in favor of regional films as compared to Hindi films. Studios are also releasing dubbed versions of popular Hollywood films, while multiplexes are increasing their Screenings of regional movies. ? Outsourcing of film services: Services such as postproduction, animation, visual effects, and 2D to 3D conversion are being increasingly outsourced to India, driven by the availability of a skilled workforce and the low cost of services.
14
? Small-budget films go mainstream: Small-budget niche films with high-quality scripts have recently gained acceptability among mainstream audiences. Strong content and word-of-mouth marketing have helped studios to generate high returns from these films, thereby diversifying their risk from big-budget movies. ? Globalization of the Indian film industry: Indian producers are improving the international marketability of large budget Indian movies by building partnerships with international screenwriters, composers and technicians. International fi lm studios are also producing and distributing Hindi and regional movies. Of the top six international movie studios, four are involved in distributing or producing Indian movies. A number of Indian film studios and M&E companies are also expanding their international footprint by acquiring international theater chains and production studios.
15
Prospects of Indian Television Industry
? Increased fragmentation in viewership: Viewership, especially in the Hindi general entertainment genre, is increasingly getting fragmented as a result of a large number of such channels being broadcast in India. However, a few players continue to dominate the market, commanding a significant share of the industry segment revenues. ? Increased competition amongst broadcasters: With new channels being introduced at regular intervals, there is increased competition amongst broadcasters, for viewership and advertising revenue. This coupled with high content and marketing costs is expected to impact the profitability of broadcasters in the medium and long term. ? Increasing penetration of DTH (Direct-to-Home): There has been rapid growth of DTH subscribers in the last few years. This trend is expected to continue over the next few years. However, operating profits are still negative for the industry, due to high customer acquisition costs, and is expected to remain this way untill a critical mass of subscribers is reached. Major DTH service provider in India are : Dish TV, Airtel Digital, Reliance Digital, Videocon, Sun TV, Tata Sky.
16
Major Problem of Indian Film Industry
? Piracy is the Major or main problem of Indian Film Industry. ? India is becoming as one of the biggest hub of film piracy. ? India is ranked fourth in the world when it comes to Illegal downloads, behind US, UK and Canada. ? Indian film industry is losing nearly $1000 million (Rs 5000 Crore) in revenue on a yearly basis ? Indian film industry is losing nearly 6,00,000 jobs due to piracy ? Piracy of cinematographic works takes two principal forms, namely `video piracy' and `cable piracy’. ? Video piracy takes place when a film is produced in the form of video cassette without taking proper authorization from the right holder i.e. producer. ? Many times producers of films sell video rights to another party (generally after six weeks or more of release in theatres) who makes video cassettes for selling or lending. ? The video cassettes kept for sale are meant for home viewing only. Any commercial use of such cassettes like in video parlours or in cable networks amounts to copyright violation. ? Cable piracy is unauthorized transmission of films through cable network. As mentioned above, showing a film in a cable network requires acquisition of proper authorization from the right holder. ? But many a time, films , especially the new releases, are shown through cables without such authorization, which tantamount to piracy.
17
ANALYSIS
Contribution of Film Industry to the Economy
Direct Contribution to the Economy:
Gross Output Gross Value Added (GVA) Net Indirect Tax Employment
Rs. USD Rs. USD Rs. USD Lakh Crores Million Crores Million Crores Million Indian 12,312 2,709 Film Industry 2,132 469 800 176 1.4
18
Total Contribution to the Economy:
Gross Output Rs. Crores Direct Impact Indirect Impact Total Impact 12,312 8,154 20,467 USD Million 2,709 1,794 4,503
Contribution (GVA+NIT) Rs. Crores 2,932 3,914 6,846 USD Million 645 861 1,506
Employment Lakhs 1.4 2.8 4.2
GVA= Gross Value added, NIT= Net Indirect Tax
19
Contribution of Television Industry to the Economy
Direct Contribution to the Economy
Gross output EBITDA Wages Gross Value added(GVA) = EBITDA+Wages USD million 40 975 415 1,429
Rs. USD Rs. USD Rs. USD Rs. Crore million Crore million Crore million Crore TV Production 1,500 330 3,363 5,668 9,361 120 3,057 (149) 3,028 26 673 -33 666 60 1,375 2,033 3,469 13 303 447 763 180 4,432 1,885 6,497
TV 15,283 Broadcasting TV Distribution Total 26,763 42,545
20
Total Contribution to the Economy
Gross Output
Contribution (GVA+NIT) Rs. Crore 7,348 13,525 20,873 USD million 1,617 2,976 4,592
Employment
Rs. Crore Direct Impact Indirect Impact Total Impact 42,545 28,178 70,723
USD million 9,361 6,200 15,561
Lakh 4.24 9.62 13.86
21
Revenues of Film and TV Industry
(Rs in Crore)
Year 2008 2009 2010 2011 2012* 2013*
Film Industry 24,470 26,750 29,800 33,200 37,200 42,000
TV Industry 10,700 11,800 13,200 14,700 15,900 18,500
Total 35,170 38,550 43,000 47,900 53,100 60,500
* =Expected
22
Revenues of Film and TV Industry (in Rs. Crores)
70000
60000
50000
40000
TV Industry Film Industry
30000
20000
10000
0
2008 2009 2010 2011 2012E 2013E
23
Revenue Breakdown of Indian Film Industry
Revenue Breakdown
9% 8% Domestic Box Office 6% 2% Ad Revenue Cable and Satellite rights Home Video Overseas box office 75%
24
Indian Film Industry Domestic Box office Collections
14000
12000
10000
8000 13233 6000 10890 9825 4000 8125 8775 11550
2000
0 2008 2009 2010 2011 Column1 2012 Column2 2013 Domestic Box Office (Rs. Crore)
Domestic box office collections are projected to increase to Rs. 13,000 crores (USD 2.8 billion) by the year 2013, growing at a CAGR of 10%. This growth is primarily attributable to the growth in average ticket prices, projected to increase from Rs. 25 (USD 55 cents) in 2008 to Rs. 40 (USD 88 cents) by 2013.
25
Indian Television Industry Revenue
45000 40000 35000 30000 25000 20000 15000 24470 10000 5000 0
2008 2009 2010 2011 2012E 2013E
42000
37200 26750
29800
33200
Overall Television Revenue (in Rs Crore)
As per estimates, it is expected that revenue will be around 42,000 crore by 2013.
26
FINDINGS
? Lakhs of people are getting employment from both the Industries (directly or indirectly) ? Digitalization has helped a lot the industry in getting revenue from new sources. ? Piracy is a major or main problem of the film industry. ? People are losing lakhs of jobs due the piracy of movies. ? Penetration of Television in household is increasing day by day. ? Local cable operators are dominating the market. ? Direct to home service has helped a lot the Television industry. ? Foreign entertainment companies such as Fox, Disney etc. are also interested in Indian film industry. These companies are also investing crores of rupees in India.
27
CONCLUSIONS
? On the basis of study, we can conclude that Film and TV industry is one the major important sector of the economy. ? Lakhs of people of different background getting employment in different fields of the Industry. ? Digitalization has helped a lot the Industry.
28
APPENDIX
29
GLOSSARY
? Gross Output: This represents the total value of goods and supplied by the entities in the industry. This is measured by the aggregate revenues of all companies in the industry.
Note: Gross Output as a measure, is different from the total consumer spend in the industry, and may vary based on the industry structure. However, the measures of "Gross Value Added", "Net Indirect Taxes" and "Employment" would remain the same, irrespective of industry structure. This has been further explained in the methodology section of this report. ? Gross Value Added ("GVA"): This factor measures the returns to labour and capital, i.e. the value of output generated by the entity's factors of production. This measure, along with the Net Indirect Taxes indicates the industry's contribution to the economy. ? Net Indirect Taxes ("NIT"): Indirect taxes (net of subsidies) paid by the industry. ? Employment: This measures the number of workers that are employed in the industry.
30
BIBLIOGRAPHY
1. "Economic Contribution of Indian film and Television industry", prepared by PricewaterhouseCoopers, March 2010. 2. "Spotlight on India's Entertainment economy", prepared by Ernst & Young, October 2011. 3.http://www.indiaglitz.com/channels/hindi/article/55508.html 4http://ibnlive.in.com/news/media-sector-added-6-bn-to-indianeconomy/111750-7.html 5.http://www.financialexpress.com/news/piracy-a-serious-threat-to-indianfilm-industry/592752/ 6.http://copyright.gov.in/Documents/STUDY ON COPYRIGHT PI RACY%20IN%20INDIA.pdf 7.http://en.wikipedia.org/wiki/Film_industry 8.http://en.wikipedia.org/wiki/Television_in_India 9.http://www.wipo.int/ip-development/en/creative_industry/pdf/ecostudy-
canada.pdf
31
doc_940529024.docx
ROLE OF FILM AND TV INDUSTRY IN OUR ECONOMY
PROJECT REPORT
ON
ROLE OF FILM AND TV INDUSTRY IN OUR ECONOMY
Submitted to: Dr. Tapan Kumar Nayak Associate Chairperson PGDM (General) IMS C-238, Lal quan GT road, Ghaziabad- 201009
Submitted By:Gaurav Rastogi (076) Gaurav Sharma (077) Harshit Suri (078) Hemant Trivedi(079) Hina Gupta (080) Section – B, PGDM IIIrd
1
DECLARATION
We hereby declare that the Project entitled “Role of Film and TV Industry in our Economy” submitted to Dr. Tapan Kumar Naik (Faculty Member) Business and Economic Policies, IMS Ghaziabad in partial fulfillment for the award of the degree of PGDM and the project has not previously formed the basis for the award of any other degree, diploma, associate ship, fellowship or other title.
Gaurav Rastogi (BM-011076)
Gaurav Sharma (BM-011077)
Harshit Suri (BM-011078)
Hemant Trivedi (BM-011079)
Hina Gupta (BM-011080)
2
ACKNOWLEDGEMENT
With our sincere regards, we wish to acknowledge our indebtness and gratitude to the contributions of people who helped us at every stage of the project. We are very much like to express our gratitude and profoundest thanks to our project guide Dr. Tapan Kumar Nayak (Associate
Chairperson PGDM IMS, Ghaziabad) for their sustained guidance, invaluable suggestions and constant encouragement without which it would not have been possible for us to complete this project.
3
TABLE OF CONTENT
1. Introduction (a) Film industry in India (b) Regional Films in India (c) Brief history of Film industry in India (d) TV Industry in India 2. Objective of the study 3. Literature review 4. Role or Importance of Film industry in India 5. Prospects of Indian film Industry 6. Major problem of Indian film industry
4
INTRODUCTION
The film and industry consists of the technological and commercial institutions of filmmaking: i.e. film production companies, film
studios, cinematography, film
production, screenwriting, pre-
production, post production, film festivals, distribution; and actors, film directors and other film crew personnel. Though the expense involved in making movies almost immediately led film production to concentrate under the auspices of standing production companies, advances in affordable film making equipment, and expansion of opportunities to acquire investment capital from outside the film industry itself, have allowed independent film production to evolve.
Film Industry in India
? India is the largest producer of films in the world. ? In 2009, India produced a total of 2961 films on celluloid that include a staggering figure of 1288 feature films. ? Films are made in different 20 languages. ? With 3.3 billion tickets sold annually, India also has the highest number of theater admissions ? Indian film industry is multi-lingual and the largest in the world in terms of ticket sales and number of films produced.
5
? The industry is supported mainly by a vast film-going Indian public, and Indian films have been gaining increasing popularity in the rest of the world—notably in countries with large numbers of expatriate Indians. ? Largest film industry in India is the Hindi film industry mostly concentrated in Mumbai (Bombay), and is commonly referred to as "Bollywood", an amalgamation of Bombay and Hollywood. ? The other largest film industries are Tamil cinema and Telugu cinema which are located in Chennai and Hyderabad and are
commonly referred to as "Kollywood" and "Tollywood". ? The remaining majority portion is spread across northern, western, and southern India
(with Punjabi, Bengali, Marathi, Oriya, Malayalam, and Kannada). ? However, there are several smaller centers of Indian film industries in regional languages centered in the states those languages are spoken. Indian films are made filled with musicals, action, romance, comedy, and an increasing number of special effects.
6
Regional Flims in India
Mainstream Cinema in India is dominated by Hindi language film which typically makes up a significant portion of total box office collections. However, over the past few years, regional films have been growing popularity with releases in a great number of theaters both within and outside the Indian Territory. Within regional languages, south Indian segment is an important market in terms of number of film releases with the four southern states comprising Andhra Pradesh, Tamil Nadu, Karnataka and Kerala together accounting for a majority of the total number of film releases in India. Other regional language markets in India include films made in Bengali, Bhojpuri, Marathi, Punjabi etc. The total domestic box-office collections from regional language films in India are estimated to be about Rs. 1,508 crores.
7
Brief History of Film Industry in India
? 1896: First moving picture showed in India ? 1913: - first Indian-made feature film (3700 feet long) released ? 1931: India's first talkie, Alam Ara released dubbed into Hindi and Urdu ? 1930s and 1940s: i) Talkies addressing social differences of caste, class and the relations between the sexes were released ii) Radical cultural organizations led to the formation of All India Progressive Writers Association and the Indian People's Theatre Association (IPTA) ? 1950: Calcutta becomes the vanguard of the art cinema ? 1951: industry became the object of considerable moral scrutiny and criticism, and was subject to severe taxation ? 1960s: i) popular cinema had shifted its social concerns towards more romantic genres ii) The period is also notable for a more assertive Indian nationalism.
?
1970s: By the beginning of the year there existed above150 film societies all over India.
? 1980s: the films took a stronger stance on the social issues with an outpouring of the social conscience, and flowing of new images.
8
? 1990s: In the 1990s, video, national and satellite/cable television have resulted in the development of a prolonged crisis in India’s movie industry, where commercial and art films are equally at risk of failing at the box office.
9
TV Industry in India
? Television is one of the major mass media of India. ? India is the second-largest pay-TV market in the world, with 108 million subscribers and a reach of 48% of Indian households ? It is a huge industry which has thousands of programmes across Indian states ranging from national language to regional ones. ? The small screen has produced numerous celebrities of their own kind some even attaining national fame. ? Approximately half of all Indian households own a television. ? As of 2010, the country has a collection of free and subscription services over a variety of distribution media, through which there are over 515 channels and 150 are pay channels. ? According to Pioneer Invest corp, the Indian cable industry is worth 270 billion (US$ 5.94 billion) and is the third largest in the
world after China and the US. ? The number of TV homes in India grew from 120 million in 2007 to 148 million in 2011. ? Cable reaches 94 million homes with 88 million analog connections and 6 million digital ones, while DTH has commanded 41 million subscribers.
10
Objective of the Study
The main objectives of the study will be: 1. To know importance of Film and TV Industry with respect to Indian Economy. 2. To evaluate performance of Film and TV Industry. 3. To figure out the problems and issues related with Film and TV Industry. 4. How this industry is helping other Sectors of the Economy?
11
Role or Importance of Film and TV Industry in our Economy
Film and TV industry is one of the important contributors to the economy and plays a very important and critical role in economic development due to the following reasons: ? Contribution of Film and TV industry to the GDP was 0.532% ? The combined revenues of film and TV industry was around Rs. 50,000 crore (USD 10.00 billion) in the calendar year 2011. It is expected that it will be around Rs. 54,000 crore (USD 11.00 billion) in the calendar year 2012. ? The film and television industry in India is one of the world's largest markets in terms of number of consumers and offers significant growth potential. Over the past few years the industry has experienced rapid double-digit growth and it is expected that this trend will continue in future, resulting in increasing contribution to the Indian economy. ? The sector has a total output more than $20 billion (Rs 1,00,000 crore), contributing more to the Gross Domestic Product (GDP) of India than the advertising industry. ? Film and TV industry creates more than 2 million jobs (directly or indirectly) in the economy.
12
Prospects of Indian Film Industry
? Growth is expected to come from the expansion of multiplexes in smaller cities, investments by foreign studios in domestic and Regional productions, the growing popularity of niche movies and the emergence of digital and ancillary revenue streams. ? Rise of multiplexes: Multiplexes continue to gain prominences across major Indian cities and companies have lined up investments to accelerate multiplex penetration in smaller towns. The number of multiplex screens is expected to double in the next five years, from 900 to 1,775 screens. ? Digitization is providing scale and reducing piracy: Digital prints cost 80% less than conventional film prints, allowing producers to reach five times the number of screens at the same cost. This has significantly improved realization, as 60% of boxoffice collections are now earned within the first week of a movie’s release. Digital cinema allows companies to control exactly where movies are showing and how many times they are shown. It also expands the reach of releases, from large cities to remote towns and villages across India.
13
? Emergence of new sources of revenue: In the last few years, the window available to monetize a film’s revenues at the box office has shortened considerably. This is driving film studios to exploit ancillary streams of revenue such as pay-per-view, mobile, online gaming, and licensing and merchandising. The revenue from these ancillary streams and cable and satellite (C&S) rights are projected to grow at a CAGR of 16% from 2009 to 2014.79 The pre-sale of satellite and home video rights has also gained momentum. ? Regional-language cinema forms an integral part of India’s film industry: 60% of all movies produced in India are in the four South Indian languages of Telugu, Tamil, Kannada and Malayalam.80 This market is witnessing rising investments from Indian and foreign studios, with a gradual shift in favor of regional films as compared to Hindi films. Studios are also releasing dubbed versions of popular Hollywood films, while multiplexes are increasing their Screenings of regional movies. ? Outsourcing of film services: Services such as postproduction, animation, visual effects, and 2D to 3D conversion are being increasingly outsourced to India, driven by the availability of a skilled workforce and the low cost of services.
14
? Small-budget films go mainstream: Small-budget niche films with high-quality scripts have recently gained acceptability among mainstream audiences. Strong content and word-of-mouth marketing have helped studios to generate high returns from these films, thereby diversifying their risk from big-budget movies. ? Globalization of the Indian film industry: Indian producers are improving the international marketability of large budget Indian movies by building partnerships with international screenwriters, composers and technicians. International fi lm studios are also producing and distributing Hindi and regional movies. Of the top six international movie studios, four are involved in distributing or producing Indian movies. A number of Indian film studios and M&E companies are also expanding their international footprint by acquiring international theater chains and production studios.
15
Prospects of Indian Television Industry
? Increased fragmentation in viewership: Viewership, especially in the Hindi general entertainment genre, is increasingly getting fragmented as a result of a large number of such channels being broadcast in India. However, a few players continue to dominate the market, commanding a significant share of the industry segment revenues. ? Increased competition amongst broadcasters: With new channels being introduced at regular intervals, there is increased competition amongst broadcasters, for viewership and advertising revenue. This coupled with high content and marketing costs is expected to impact the profitability of broadcasters in the medium and long term. ? Increasing penetration of DTH (Direct-to-Home): There has been rapid growth of DTH subscribers in the last few years. This trend is expected to continue over the next few years. However, operating profits are still negative for the industry, due to high customer acquisition costs, and is expected to remain this way untill a critical mass of subscribers is reached. Major DTH service provider in India are : Dish TV, Airtel Digital, Reliance Digital, Videocon, Sun TV, Tata Sky.
16
Major Problem of Indian Film Industry
? Piracy is the Major or main problem of Indian Film Industry. ? India is becoming as one of the biggest hub of film piracy. ? India is ranked fourth in the world when it comes to Illegal downloads, behind US, UK and Canada. ? Indian film industry is losing nearly $1000 million (Rs 5000 Crore) in revenue on a yearly basis ? Indian film industry is losing nearly 6,00,000 jobs due to piracy ? Piracy of cinematographic works takes two principal forms, namely `video piracy' and `cable piracy’. ? Video piracy takes place when a film is produced in the form of video cassette without taking proper authorization from the right holder i.e. producer. ? Many times producers of films sell video rights to another party (generally after six weeks or more of release in theatres) who makes video cassettes for selling or lending. ? The video cassettes kept for sale are meant for home viewing only. Any commercial use of such cassettes like in video parlours or in cable networks amounts to copyright violation. ? Cable piracy is unauthorized transmission of films through cable network. As mentioned above, showing a film in a cable network requires acquisition of proper authorization from the right holder. ? But many a time, films , especially the new releases, are shown through cables without such authorization, which tantamount to piracy.
17
ANALYSIS
Contribution of Film Industry to the Economy
Direct Contribution to the Economy:
Gross Output Gross Value Added (GVA) Net Indirect Tax Employment
Rs. USD Rs. USD Rs. USD Lakh Crores Million Crores Million Crores Million Indian 12,312 2,709 Film Industry 2,132 469 800 176 1.4
18
Total Contribution to the Economy:
Gross Output Rs. Crores Direct Impact Indirect Impact Total Impact 12,312 8,154 20,467 USD Million 2,709 1,794 4,503
Contribution (GVA+NIT) Rs. Crores 2,932 3,914 6,846 USD Million 645 861 1,506
Employment Lakhs 1.4 2.8 4.2
GVA= Gross Value added, NIT= Net Indirect Tax
19
Contribution of Television Industry to the Economy
Direct Contribution to the Economy
Gross output EBITDA Wages Gross Value added(GVA) = EBITDA+Wages USD million 40 975 415 1,429
Rs. USD Rs. USD Rs. USD Rs. Crore million Crore million Crore million Crore TV Production 1,500 330 3,363 5,668 9,361 120 3,057 (149) 3,028 26 673 -33 666 60 1,375 2,033 3,469 13 303 447 763 180 4,432 1,885 6,497
TV 15,283 Broadcasting TV Distribution Total 26,763 42,545
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Total Contribution to the Economy
Gross Output
Contribution (GVA+NIT) Rs. Crore 7,348 13,525 20,873 USD million 1,617 2,976 4,592
Employment
Rs. Crore Direct Impact Indirect Impact Total Impact 42,545 28,178 70,723
USD million 9,361 6,200 15,561
Lakh 4.24 9.62 13.86
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Revenues of Film and TV Industry
(Rs in Crore)
Year 2008 2009 2010 2011 2012* 2013*
Film Industry 24,470 26,750 29,800 33,200 37,200 42,000
TV Industry 10,700 11,800 13,200 14,700 15,900 18,500
Total 35,170 38,550 43,000 47,900 53,100 60,500
* =Expected
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Revenues of Film and TV Industry (in Rs. Crores)
70000
60000
50000
40000
TV Industry Film Industry
30000
20000
10000
0
2008 2009 2010 2011 2012E 2013E
23
Revenue Breakdown of Indian Film Industry
Revenue Breakdown
9% 8% Domestic Box Office 6% 2% Ad Revenue Cable and Satellite rights Home Video Overseas box office 75%
24
Indian Film Industry Domestic Box office Collections
14000
12000
10000
8000 13233 6000 10890 9825 4000 8125 8775 11550
2000
0 2008 2009 2010 2011 Column1 2012 Column2 2013 Domestic Box Office (Rs. Crore)
Domestic box office collections are projected to increase to Rs. 13,000 crores (USD 2.8 billion) by the year 2013, growing at a CAGR of 10%. This growth is primarily attributable to the growth in average ticket prices, projected to increase from Rs. 25 (USD 55 cents) in 2008 to Rs. 40 (USD 88 cents) by 2013.
25
Indian Television Industry Revenue
45000 40000 35000 30000 25000 20000 15000 24470 10000 5000 0
2008 2009 2010 2011 2012E 2013E
42000
37200 26750
29800
33200
Overall Television Revenue (in Rs Crore)
As per estimates, it is expected that revenue will be around 42,000 crore by 2013.
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FINDINGS
? Lakhs of people are getting employment from both the Industries (directly or indirectly) ? Digitalization has helped a lot the industry in getting revenue from new sources. ? Piracy is a major or main problem of the film industry. ? People are losing lakhs of jobs due the piracy of movies. ? Penetration of Television in household is increasing day by day. ? Local cable operators are dominating the market. ? Direct to home service has helped a lot the Television industry. ? Foreign entertainment companies such as Fox, Disney etc. are also interested in Indian film industry. These companies are also investing crores of rupees in India.
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CONCLUSIONS
? On the basis of study, we can conclude that Film and TV industry is one the major important sector of the economy. ? Lakhs of people of different background getting employment in different fields of the Industry. ? Digitalization has helped a lot the Industry.
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APPENDIX
29
GLOSSARY
? Gross Output: This represents the total value of goods and supplied by the entities in the industry. This is measured by the aggregate revenues of all companies in the industry.
Note: Gross Output as a measure, is different from the total consumer spend in the industry, and may vary based on the industry structure. However, the measures of "Gross Value Added", "Net Indirect Taxes" and "Employment" would remain the same, irrespective of industry structure. This has been further explained in the methodology section of this report. ? Gross Value Added ("GVA"): This factor measures the returns to labour and capital, i.e. the value of output generated by the entity's factors of production. This measure, along with the Net Indirect Taxes indicates the industry's contribution to the economy. ? Net Indirect Taxes ("NIT"): Indirect taxes (net of subsidies) paid by the industry. ? Employment: This measures the number of workers that are employed in the industry.
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BIBLIOGRAPHY
1. "Economic Contribution of Indian film and Television industry", prepared by PricewaterhouseCoopers, March 2010. 2. "Spotlight on India's Entertainment economy", prepared by Ernst & Young, October 2011. 3.http://www.indiaglitz.com/channels/hindi/article/55508.html 4http://ibnlive.in.com/news/media-sector-added-6-bn-to-indianeconomy/111750-7.html 5.http://www.financialexpress.com/news/piracy-a-serious-threat-to-indianfilm-industry/592752/ 6.http://copyright.gov.in/Documents/STUDY ON COPYRIGHT PI RACY%20IN%20INDIA.pdf 7.http://en.wikipedia.org/wiki/Film_industry 8.http://en.wikipedia.org/wiki/Television_in_India 9.http://www.wipo.int/ip-development/en/creative_industry/pdf/ecostudy-
canada.pdf
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