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A Market Analysis of UTV Motion Pictures
A Market Analysis of UTV Motion Pictures
A Market Analysis of UTV Motion Pictures
A Market Analysis of UTV Motion Pictures
A Market Analysis of UTV Motion Pictures
A Market Analysis of UTV Motion Pictures
A Market Analysis of UTV Motion Pictures
A Market Analysis of UTV Motion Pictures
A Market Analysis of UTV Motion Pictures
A Market Analysis of UTV Motion Pictures
A Market Analysis of UTV Motion Pictures
A Market Analysis of UTV Motion Pictures
A Market Analysis of UTV Motion Pictures
A Market Analysis of UTV Motion Pictures
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A Market Analysis of UTV Motion Pictures

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I have analyzed the formation and growth of UTV Motion Pictures since its inception taking examples of the kind of movies they chose to produce & distribute and how they slowly became an international …

I have analyzed the formation and growth of UTV Motion Pictures since its inception taking examples of the kind of movies they chose to produce & distribute and how they slowly became an international player before selling off to Walt Disney.

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  • 1. UTV Motion Pictures A market analysis Submitted to Prof. Rajeev Roy Abhishek Chatterjee Roll No. : U112002 PGDM (BM) 2012-14
  • 2. Table of ContentsCompany Profile ............................................................................................................................. 3Introduction ..................................................................................................................................... 4Total Market Size of Indian Movie Industry .................................................................................. 6Future Growth ................................................................................................................................. 7Market Share of UTV ..................................................................................................................... 8Competitors ..................................................................................................................................... 8Market Profitability....................................................................................................................... 10Industry Cost Structures ................................................................................................................ 10Distribution Channels ................................................................................................................... 11Market Trends ............................................................................................................................... 12Key Success Factors ..................................................................................................................... 13Conclusion .................................................................................................................................... 14References ..................................................................................................................................... 14
  • 3. Company ProfileUTV Software Communications Ltd. is an Indian media and entertainment company. It isowned by The Walt Disney Company India Pvt. Ltd., a subsidiary of The Walt DisneyCompany.It started out as UTV Software Communications Pvt. Ltd. in 1990 as a producer of televisioncontent and ad films for Doordarshan, before becoming public in 1995 and renaming itself asUTV Software Communications Ltd. With the advent of Satellite television in India it startedproducing content for Zee Television. After venturing into in-flight entertainment programming,television post-production, special effects & animation, television broadcasting, it went intomovie production and distribution business under the name UTV Motion Pictures.Although the subsidiary was launched in 1996 and the first film was produced in 1997 (“Dil KeJharoke Mein”), the company actively started producing and distributing films only 2000onwards.In 2011, The Walt Disney Company bought out stakes held by public shareholders and otherpromoters of the company in a deal valued around Rs 2,000 crore making UTV a wholly ownedsubsidiary of the group.Today, the UTV Group looks into 5 verticals namely – Television Content Motion Pictures Games Content Broadcasting InteractiveIn the following market analysis we would be focusing only on the Motion Pictures vertical inIndia which contributes to over 50% of the company‟s total revenue.
  • 4. IntroductionThe UTV Group has pioneered the studio model in India. A studio model is a system where oneenters with a script, and once it is approved, everything from availing of production resources tofinal sales and distribution of the movie is taken care of by the creative personnel of thecompany.They have always supported novel story ideas and backed movies without a big start castwhich led to the development of a new breed of film making in the country. Some of these filmsare – „Dev D‟, „Oye Lucky Lucky Oye‟, „A Wednesday‟ and „Khosla Ka Ghosla‟. Thesemovies not only got critical acclaim but also did well commercially by sheer strength of content.In 2008, a special sub-division of the company- UTV Spotboy was launched to make movieswhich are low on budget and star cast, but high on content. Movies like „Aamir‟, „Welcome toSajjanpur‟ and „Paan Singh Tomar‟ are some of the movies produced by this sub-group. Thesuccess of these movies led other leading production houses in the country to adopt a similarmodel.Their business spans the integrated model of creative development, production, marketing,distribution, merchandising and syndication worldwide. UTV‟s portfolio includes Hindi Movies,Regional Movies, Animation Films, International productions and co productions, besides anexclusive distribution arrangement for India with The Walt Disney Company.One of the first Indian companies to produce and distribute movies abroad, UTV has co-production agreements with several international production houses like OverbrookEntertainment and Sony Pictures Entertainment.In 2008-2009, UTV Motion Pictures became the first Indian Studio to co-produce amainstream Hollywood movie - M. Night Shyamalans “The Happening”. Not only this, UTValso distributed Disneys productions – “Confessions of a Shopaholic” and “Bedtime Stories” inIndia. This coupled with innovative marketing initiatives and a concentrated campaign toleverage value across existing and new media platforms, further reinforced their stature as notonly the leading motion picture producers in India, but also the most innovative.
  • 5. Along with production, UTV successfully distributes its movies in more than 45 countriesaround the world on the same day as their theatrical release in India. UTV Motion Picturesaccomplished the feat of being among the Top 20 Distributors in North America and is thefirst Indian film studio ever to have crossed the US $5 million revenue mark in the first half of ayear, thus redefining the scope of overseas distribution of Indian films.
  • 6. Total Market Size of Indian Movie IndustryThe size of the Indian film industry is estimated at Rs 13000 crores growing at a CAGR of 11.5per cent. Out of Rs 13000 crores, the domestic box-office collections account for Rs 9877 croreswith overseas box-office, ancillary rights and home video making up the balance.This growth is primarily attributable to the growth in average ticket prices, increasing from Rs 25(USD 55 cents) in 2008 to Rs 40 (USD 88 cents) in 2012. The Indian Film Industry Domestic Box-office Overseas Box-officeFactors leading to growth in the Industry: 1. The growth in India‟s per captia income has led to a large part of the population willing to spend on discretionary items. 2. India produces the largest number of movies in the world. Growing International market and their interest in India has also led to a variety of content available to people over here. 3. Hollywood and other international players have been trying to consolidate their position in India through joint productions. Some of the major companies in this race are the Warner Brothers, Sony Motion Pictures and Twentieth Century Fox. 4. Improved exhibition facilities through the advent of multiplexes in the country.
  • 7. Future GrowthThe industry is growing at a CAGR of 11.5 %. Around 70% of the revenue still comes fromtheatre viewership. DVD, VHS, cable, satellite and pay-per-view make up for the rest of therevenue. The theatrical revenues continue to grow at 17 % while the satellite revenues aregrowing at 22%. With improved digital technology and stringent laws to curb piracy andadditional 600 crores INR may get added to the revenue.The estimated market size is expected to be Rs.17000 crores by the end of 2014 with Rs.12400crores coming from domestic Box-office collections alone. The Overseas box-office is supposedto grow up to 1450 crores INR.One look at the growth rate of the Hindi Film Industry (Bollywood) alone over the past fewyears show that such figures are well within reach.
  • 8. Market Share of UTVIf we consider the entire Indian market then UTV would have a market share of around 5%. Acountry which makes over 900 films in a year with Independent Producers still forming a largechunk, this is an adorable market presence.CompetitorsThe major competitors for the company in Hindi Film Segment are 1. Yash Raj Films 2. Dharma Productions 3. Viacom 18 4. Mukta Arts Ltd. 5. Excel Entertainment 6. Aamir Khan Productions 7. Red Chilies Entertainment 8. Tips 9. Venus 10. PVR 11. Reliance Entertainment 12. Balaji Telefilms 13. Eros EntertainmentIn the regional film domain the major competitors are 1. Prasad Art Pictures 2. Padmalaya Studios 3. Geetha Arts 4. Sri Venkateswara Creations 5. Madras Talkies 6. Bharat Bala Productions
  • 9. 7. Gemini StudiosIf we look at the language wise distribution of the number of films made in India we will realizethat the regional film production houses (especially the ones in Southern part of India) are asmuch a competition to them as the ones in Hindi film segment.However, unlike its counterparts in Hindi Film industry UTV has been one of the first productionhouses to realize the importance of regional film market and has already started making films inSouth Indian and Marathi languages. Some of the regional films produced by UTV in the recentpast are Harishchandrachi Factory (Marathi), Vettai, Kanaamochi Yenada (both Tamil) andEanadu (Telugu)UTV has also realized the importance of collaboration in creative business and continuously ties-up with major production houses in making and distributing movies. Some of the companies ithas frequently collaborated with are Dharma Productions, Aamir Khan Productions and ExcelEntertainment.
  • 10. Market ProfitabilityThe total profits before tax (PBT) generated by UTV motion pictures in a single year is over Rs.500 crores (it was Rs. 524 crores in 2010). The following profit comes through total revenuegenerated through theatrical release, satellite distribution, music, home video sales, filmmerchandise and internet downloads.Industry Cost StructuresThe total cost of production of a film, including its publicity cost, can vary from 5 crores to 50crores depending on the content and star cast. UTV follows the Hollywood model of productionand reserves as much as 40% of the film budget for publicity alone.An experimental film like „Paan Singh Tomar‟ based on the true life story of an athlete-turned-dacoit may cost only Rs. 6 crore while a film like „Guzaarish‟ having an A-list star cast(Hrithik Roshan and Aishwarya Rai) may cost up to Rs. 70 crore.Usually if the content is not mass friendly, the production houses try to curtail the productioncosts of the film and spend as much as possible on the publicity campaign of the film. Usuallysuch films turn out to be greater revenue generators than the usual run-of-the-mill stuff.Films like „A Wednesday‟, „Dev D‟ which was produced by UTV with minimalistic budgetended up generating over 100% profit on their budget.While UTV distributes its own films and later on releases it on its own broadcasting network, itis difficult to gauge how it goes about generating revenues when it comes to distribution andsatellite rights of films produced by other production houses.Such reports are kept confidential. However it is known that a big budget film sells at 1.5 to 2crore INR on an average in each territory as far as theatrical distribution is concerned.Similarly the satellite rights are priced can be anything between 10 crores to 30 crores INRdepending upon the performance at the box office. The music and home video rights are sold ata combined value of 10 crores INR on an average.
  • 11. Distribution ChannelsOnce the film is made, it is bought by distributors who take it to various territories in India suchas Central India (M.P., Chattisgarh), Nizam Region (Hyderabad and areas in South india whereHindi is prevalent), Northern Belt, Southern India etc. The distributors in turn sell it toexhibitors (single screen and multiplex) who give them a cut in the share only when the filmgenerates profit for them. The revenue generated from parking of vehicles and food items arekept by exhibitors.The overseas theatrical distribution is usually done by the same distribution company that does itin India. However certain movies cater to niche market. So they are distributed accordingly inselect art house theatres. Such distributors usually come on board when the film is taken toInternational Film Festivals.The film premiers on television after a considerable run at the theatres. It can be viewed ondirect-to-home television service also on a pay-per-view basis.People with broadband connection can also watch the movies online on channels such asYoutube who buy the rights of most of the films.
  • 12. Market TrendsMovie making is a very unpredictable business. While the content in the 80s was primarilytowards pleasing the masses, there started a gradual change in the content towards the late 90s.With the advent of Satellite television, the viewers were becoming increasingly aware of thequality of movies abroad. Success of films likes „Hyderabad Blues‟ and „Satya‟ (1998) pavedthe way for similar movies in times to come.The multiplex theatres which brought along with them neat and clean viewing space, good foodservice and air-conditioned movie hall, became a regular place for family outing for the urbanaudience. They were willing to pay more for greater comfort and variety in content.The success of „Dil Chahta Hai‟ (2001) started a new wave of cinema in Bollywood whichcatered to urban milieu.UTV was quick to foresee the change and backed anybody who had a different story to tell. Itknew that if they kept the budget low, the revenue generated from multiplex would help thembreak even.The results were unprecedented. These movies started giving them over 100% profit. The size ofthe niche market was not limited to multiplex going audience alone, but rubbed its effect ininteriors of the country as well.However, since the last few years, the success of mass-friendly films like „Wanted‟ and„Bodyguard‟, most of which are remakes of South Indian films has shifted the market trend backto the kind of films that were being made in the 80s.
  • 13. Key Success FactorsAs we saw the movie business is unpredictable and no one can judge which film might work.However, the following factors may help in earning profits for a film:- 1. Knowing your audience well: Each film has a target audience. Hence the distribution and marketing of film needs to be done accordingly. A Hollywood exhibited in India needs to be dubbed in regional language if it‟s shown in Tier B and Tier C cities. 2. Budgeting the film smartly: If the content of the film is something which will alienate the masses then it needs to be kept low on costs. However if a film requires lavish production values and it is guaranteed that it will enhance the viewing quality of the film then the producers must not compromise on the budget. 3. Good promotional campaign: The first look and songs of the film help create a great impression in the minds of the people who have too many films to choose from these days. Apart from that generating visibility through social networking sites also adds to awareness about the film.
  • 14. ConclusionUTV has always been a frontrunner when it comes to innovation in movie business. It pioneereda specific kind of films in India, started a new trend in movie production and distribution andmost importantly brought discipline in an otherwise disorganized industry. Hopefully, with theworld waking up to the talent that lies in India and potential of India as a market for moviebusiness, we will be seeing UTV spearheading the movement in putting India on the world mapin the film business through more international collaborations in the future.ReferencesSources: http://en.wikipedia.org/wiki/UTV_Software_Communications http://en.wikipedia.org/wiki/UTV_Motion_Pictures http://www.boxofficeindia.co.in/size-and-contribution-of-the-indian-film-industry/ http://www.scribd.com/doc/2438171/Indian-Entertainment-Industry-Focus-2010 http://www.utvgroup.com/investors/pdf/utv-earnings-release-2q-fy-2010.pdf http://www.slideshare.net/arveen/indian-film-industry

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