Entertainment Industry
The words that come to our mind when we think of entertainment are
Pleasure, Fun and Relaxation. En...
Study titled "The Indian Entertainment Industry: Emerging Trends and
Opportunities", scheduled to be unveiled during FICCI...
Top 5 Media Companies By Net Profit
Sector
Rank
Company Net Profit (Rs Crore)
1 Zee Telefilms 87
2 Balaji Telefilms 57
3 P...
 Radio
Radio is a theater to the mind. Radio is also a mass medium. It is only an
audio medium. It is best suitable for l...
only for those lucky few, as everyone could not afford it. Now it’s become like a
necessity (common commodity), which has ...
Today cable TV has become so addictive that previously where women’s
were more toward their household work now its differe...
delivery media to the music listener. However, over the years, the industry has
undergone a transformation. Non-film genre...
BRIEF HISTORY OF INDIAN FILM INDUSTRY
 The Beginnings
In 1886 the Lumiere Brothers Cinematographe unveiled six soundless ...
and the more songs they had the better. In those days, the films made had upto
40 songs.
 The 1950s
By the start of the 1...
In addition, directors such as Raj Kapoor, Guru Dutt and Mehboob Khan, while
not directly involved with IPTA, created film...
The accepted turning point in the popular film was the
angry, violent Zanjeer/The Chain (Prakash Mehra; 1973),
which fed i...
The Art Cinema of the 80s
To counter this, the art cinema of the 1980s diversified from its Bengali
moorings of the earlie...
of film culture in Kerala, India's most literate state. In his films Gopalakrishnan
transformed the lush countryside, busy...
CURRENT SCENARIO
Film entertainment is the most popular form of entertainment and it is this
undiminished passion through ...
SIZE OF THE INDUSTRY
A FICCI report 2002 on the Indian Entertainment Industry prepared by
Arthur Andersen India Ltd. state...
COST-BASED APPROACH
This comprises artists’ remuneration, production expenses, technicians
expenses, marketing expenses, s...
revenues. Music rights include the domestic and international music rights of a
film, which are sold by the film producer ...
Corporate Sponsorships and Merchandising:
Corporates have also started marketing their products through films.
And in exch...
(I) POLITICAL ENVIRONMENT
SUPPORT AND PROMOTION BY DIFFERENT GOVERNMENT BODIES
 Films Division
The Ministry of Informatio...
Indian films, import of foreign films, import and distribution of raw stock,
construction of cinema theatres and developme...
The National Awards for films, known as state awards till 1966, were set
up in 1953, for promoting the country's film art ...
 Film and Television Institute of India
The Film and Television Institute of India ( FTII ) located at Pune,
imparts tech...
 Purchasing Power Parity (PPP) in India has increased from $300 in 1992
to $ 1600 in 1997 and from $ 1600 to $ 2660 in 20...
From hairstyles to costumes, from beliefs to lifestyle, from house
concepts to the toy in the hands of a kid, every thing ...
The laws have thereafter been subjected to certain changes. It was
Amending Act 65 of 1984 which specifically addressed th...
ii. The provisions of the Act were now specifically made applicable to video films
and compute programes;
iii. The produce...
The law protects cinematograph films as a distinct work, giving the producer of
the film the exclusive rights
i. to make a...
Due, Delhi, Goa, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir,
Karnataka, Kerala, Madhya Pradesh, Meghalaya, Orissa...
it has as much potential for evil as it has for good and has an equal potential to
instill or cultivate violent or good be...
 Enforcement
a. Introduction
1. The Central Board of Film Certification is responsible mainly for certifying
films. The e...
(d) exhibition of a film which was refused a certificate (or 'banned' in common
parlance)
(e) exhibition of uncensored fil...
In keeping with this responsibility, the Central Board of Film
Certification known till June 1, 1983 as the Central Board ...
1. The Cinematograph (Certification) Rules, 1983 have laid down the procedure
that a producer must go through to get his c...
5. Before any order prejudicially affecting the applicant of a film is passed by
the Board, he is given an opportunity to ...
Gujarat has an incidence of 100 per cent, while Madhya Pradesh has a tax
rate of 75 percent. Andhra Pradesh has low tax ra...
- Digital Cinema: Infrastructure
FICCI has tied with NASSCOM which can be called as “ e-Entertainment
Alliance”.
This Alli...
MICHAEL PORTER’S 5 FORCES
1. Threat of Subsititute:
There is no threat of substitute for film industry as no other sector ...
c. Theatres: For theatres, buyers are public who can not bargain for the
prices of tickets. But in many states, government...
R E V E N U E C O N T E N T A U D I E N C E C E R T I F I C A T I O N
P R O D U C T
C L A S S I F I C A T I O N
PRODUCTS
D...
PROCESS FLOWCHART
Output
Output
Output
Output
40
Dubbing
Backgroung Music
Sound Effects etc.
STORY WRITER
/SCRIPT
DIRECTOR...
PROCESS EXPLANATION
The story writer provides story to director. Initially only the concept of
the story is explained. The...
COMPONENTS
Producer Animal Suppliers Art Directors
Art Printers Artificial Plants Artists
Dubbing Artists Costume Supplier...
5 MAJOR COMPONENTS
1. Direction
The Director is responsible for executing the shooting process on the
floor. His responsib...
Though the tools are different yet the
end results have striking similarities.
Photography has it roots in science,
techno...
4. Acting & Presentation
In almost all Film and Television programmes there
is hardly any programme where no actor is invo...
CORPORATIZATION AND FINANCING
The film industry is one sector in India, operations of which have always
remained under clo...
Films Produced By Corporate Production Houses
Production House Film
Aamir Khan Productions Private Limited Lagaan
Zee Tele...
Industrial Development Bank of India was the first institution to make an
allocation of Rs 1 billion for the film industry...
INFRASTRUCTURE
The infrastructure for films comprises of production, post-production
and exhibition infrastructure. Produc...
here includes studio floors, film cities, laboratories and post-production
facilities. In 2002, India has 25 studios and t...
Post-production facilities have to keep pace with fast changing
technology. Avid Editing Suites are rapidly replacing the ...
Taiwan 7.62
Thailand 7.00
Source: FICCI Report 2002 - Indian Entertainment Industry
SCREENS
As compared to approximately 3...
development of multiplexes with as many as 200 multiplex screens planned in
the near future) and a sustained clampdown on ...
of taking insurance cover for film production. The importance of insurance
cover assumes significant importance in view of...
market is specially good for sentimental films, as well as China and the East
European countries like Hungary and Czechosl...
Another problem is that of income tax. Earlier, the film makers used to
get exemption for export earnings raised abroad un...
films is important and certain stars like Shah Rukh Khan, Salman Khan, Amir
Khan, Hrithik Roshan, Amitabh Bachchan and San...
industry. What sets this segment apart from the rest of the industry is its high
degree of discipline. The average time fo...
Productions of Chiranjeevi, Geeta Art Films of Alu Arvind, Annapurna Studio
Private Ltd of Nagarjuna and his father – the ...
films are similar to B and C class films in Hindi, Telegu or Tamil languages,
though their subject might be more social an...
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Entertainment industry

  1. 1. 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. 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 1
  2. 2. 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. Estimated Turnover of Entertainment Industry 19.200 22.608 26.945 31.634 36.690 42.300 0 10 20 30 40 50 2003 2004 2005 2006 2007 2008 Years (in crores) Estimated Turnover (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 Rank Company 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 161 (Source: Economictimes.com) 2
  3. 3. Top 5 Media Companies By Net Profit Sector Rank Company 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) Entertainment sector is divided into many segments. Some of the segments are as follows:  Amusement parks The roots of the amusement park industry go back to medieval Europe when pleasure gardens began to spring up on the outskirts of major European cities. These gardens were a forerunner of today's amusement parks, featuring live entertainment, fireworks, dancing, games, and even primitive amusement rides. Today the amusement park remains an international favorite. Many developing nations are experiencing the joys of the amusement park for the first time, while the older, more established amusement parks continue to search for new and different ways to keep their customers happy. Rides are taking advantage of technology to reach heights and speeds that thrill seekers only dreamt about not too long ago. www.napha.org/history.html Essel World: Essel World offers over thirty-four thrilling and scintillating rides, games and amusements, guaranteed to pep you up. Water Kingdom: The Water Kingdom is Asia's largest Theme Water Park. Set amidst an exotic jungle, complete with quaint sculptures, ruins and tropical vegetation, the Water Kingdom has several innovative attractions - the worlds biggest wave pool, activity pools, river adventure cruises and lots more. 3
  4. 4.  Radio Radio is a theater to the mind. Radio is also a mass medium. It is only an audio medium. It is best suitable for local advertising followed by spot and then by network. Unlike print media, a radio set can accommodate a group of individuals all at the same time. Listening does, however, usually compel all or almost all the individual's attention. No doubt housewives turn to radio and listen. Some household jobs or activities can be combined satisfactorily with radio listening. Radio had great response in the beginning but with the higher penetration of television, the radios was out shadowed in other words people preferred tantalizing both their senses. Just a few 3 - 4 years back listening to the radio was not looked upon. Thanks to the revolution brought about in 2001 with the entry of lots of private radio stations and cheap handsets in the metros number of people harping on radio as a source of entertainment has zoomed up again. Radio covers 90% of India and entertains about 98.81% of population through programmes broadcasted by AIR. Many private players are now plunging into this industry giving the listeners a world of choices namely Radio City, Radio Mirchi, Go, Win and RED. These five players in Mumbai spent an estimated Rs 500 million last year; the aggregate revenues did not amount to more than Rs 260 million. The high licenses, that came into effect after a blistering bidding process three years ago, are killing the fledgling private FM players. www.indiantelevision.com/headlines/y2k3/may/may211.htm The temporary closure of Win 94.6 due to alleged non-payment of license fees for the current year is bad news for the entire radio industry. The growth rate of private FM is directly proportional to the number of stations in a city. Disruptions and closures will only add to the woes of the industry and not help matters.www.studio-systems.com/hotnews/audionews/mayjune2003/audio61.htm  Televisions Unlike radio TV was a great source of entertainment right from the beginning. This aspect is now changing. Apart from being entertaining it is also a great source of information now as well as a source of education. Earlier it was 4
  5. 5. only for those lucky few, as everyone could not afford it. Now it’s become like a necessity (common commodity), which has grabbed the attention of all age groups. Television is broadcast and electronic medium. Television combines three attributes like sound, picture and motion. Television broadcasts audio-visual programmes. Television is a theatre of the home. Receiving a television set is a glamorous family medium. No other medium can compare with television for its great penetration of the market. Print media like newspapers and magazines are hard on the eyes to read and understand. The problem of illiteracy is also there. The readers have to put in a lot of effort on reading and understanding the message. In case of television broadcasting it is just enough if the viewer keeps his or her eyes open. Commercials are broadcast only during breaks, and cuts are usually only for a few seconds and require no efforts to view. It is an entertainment and information mass medium possessing all the qualities essential for a mass medium. Television was introduced in India, as an experimental service in September 1959, with a limited transmission three days a week. There have been two ignition points: the first in the eighties when colour TV was introduced by state-owned broadcaster Doordarshan (DD) during the 1982 Asian Games. It then proceeded to install transmitters nationwide rapidly for terrestrial broadcasting. In this period no private enterprise was allowed to set up TV stations or to transmit TV signals. The second spark came in the early nineties with the broadcast of satellite TV by foreign programmers like CNN followed by Star TV and a little later by domestic channels such as Zee TV and Sun TV into Indian homes. Prior to this, Indian viewers had to make do with DD's chosen fare which was dull, non-commercial in nature, directed towards only education and socio-economic development. www.indiantelevision.com/indianbrodcast/history/historyoftele.htm The initial success of the channels had a snowball effect: more foreign programmers and Indian entrepreneurs flagged off their own versions. From two channels prior to 1991, Indian viewers were exposed to more than 90 channels by 2002. 5
  6. 6. Today cable TV has become so addictive that previously where women’s were more toward their household work now its different, they now make sure they complete their chores before their favorite serial starts and they can relax. Two main revenue streams of TV are Advertisement (A) and Subscription (S) revenues. Cable penetration has increased in leaps and bounds. Cable connectivity is provided by small and unorganized as well as large, corporate players. Cable operations are regulated by Cable Televisions Networks (Regulation) Act, 1995.  Sports What entertains one the most playing a particular sport or watching a particular sport? Well the answer is obvious, watching. Earlier in India we had sports like gulli danda and kabadi but now there is cricket, hockey, football, etc. Adventure sports: Sports generates a win and loose relationship where as adventure sports generates a win and win relationship. India Offers a wide range of adventure sports for tourists. Trekking and Skiing in the Himalayas, White Water Rafting on the Ganges and Beas, Camel and Jeep safaris in the deserts of Rajasthan, Paragliding in Himachal, are just some of the options available to the adventure seeking tourists. The perennial challenge of the Himalayas for mountaineers. Coniferous forests and flower meadows welcome the trekker. And the rapids of snow-fed rivers are ideal for white water rafting. Lakshadweep offers excellent wind surfing, snorkelling and scuba diving in the crystal clear waters of the lagoons which surround each island. This particular source of entertainment is gaining momentum because of the changing outlook of the people and even because of the safety facilities provided with each adventure sport.  Music Until the 1990s, the Indian music industry was synonymous with Indian film music. Music cassettes and radio (run by All India Radio) were the only 6
  7. 7. delivery media to the music listener. However, over the years, the industry has undergone a transformation. Non-film genres, such as international music, Indi- pop and regional music have become significant despite the continuing dominance of film music. International music has gained popularity owing to the promotional effects of satellite music television and the entry of global music majors like Sony Music and Universal. Besides, old genres of Indian music such as classical and devotional music have received renewed focus and commercial attention. This metamorphosis of the industry has been in tandem with changes such as the retail revolution in music distribution (with the emergence of music retailing outlets), increasing penetration of Compact Discs (CDs), and emerging distribution channels such as the Internet. These factors, coupled with the increased affordability of quality music hardware.www.screenindia.com/20010413/mcover.html 7
  8. 8. 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 8
  9. 9. and the more songs they had the better. In those days, the films made had upto 40 songs.  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. 9
  10. 10. 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 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. 10
  11. 11. 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 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. 11
  12. 12. 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.  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 12
  13. 13. 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.  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 13
  14. 14. CURRENT SCENARIO 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. 14
  15. 15. 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 Net Revenues INR Total Costs INR Hindi mainstream 75 16.5 6.4 10.1 12.8 Cross-over Hindi 15 0.9 0.4 0.5 0.4 Foreign movies 15 0.8 0.4 0.4 NA Malayalam 93 3.7 1.8 1.9 2.3 Tamil mainstream 84 5.9 2.8 3.1 3.3 Telegu mainstream 74 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.) 15
  16. 16. 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. 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 16
  17. 17. 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 Producer Cost (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 Universal Sanjay Leela Bhansali 120 Devdas (Source: FICCI Report 2002 - Indian Entertainment Industry) 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. 17
  18. 18. 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 EXTERNAL ENVIRONMENT OF FILM INDUSTRY 18 Domestic theatrical sales Overseas theatrical rights Music rights Telecasting and video rights Corporate Sponsorship/ Merchandising
  19. 19. (I) POLITICAL ENVIRONMENT SUPPORT AND PROMOTION BY DIFFERENT GOVERNMENT BODIES  Films Division 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 19
  20. 20. 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 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 20
  21. 21. 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. 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. 21
  22. 22.  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 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 22
  23. 23.  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. 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. 23
  24. 24. 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 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. 24
  25. 25. 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 of Rs. 50,000/-.; An enhanced punishment in the case of second and subsequent convictions was also provided for; 25
  26. 26. 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. 26
  27. 27. The law protects cinematograph films as a distinct work, giving the producer of the film the exclusive rights 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 & 27
  28. 28. 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 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, 28
  29. 29. 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 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. 29
  30. 30.  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. 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. 30
  31. 31. (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. 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.  Who Does Film Censorship? 31
  32. 32. 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 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 32
  33. 33. 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 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. 33
  34. 34. 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. www.cbfcindia.tn.nic.in AN OVERVIEW OF FILMS CERTIFIED (From 1.1.2003 to 31.12.2003) U UA A S TOTAL INDIAN FEATURE FILMS 479 198 200 - 877 FOREIGN FEATURE FILMS 34 67 181 - 282 INDIAN SHORT FILMS 1056 64 57 - 1177 FOREIGN SHORT FILMS 47 109 72 - 228 INDIAN 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. 34
  35. 35. 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 : 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. 35
  36. 36. - Digital Cinema: Infrastructure 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. FICCI Report 2002- Indian Entertainment Industry 36
  37. 37. MICHAEL PORTER’S 5 FORCES 1. Threat of Subsititute: There is no threat of substitute for film industry as no other sector can give entermainment to people in a way film industry provides. But inside the film industry there can be threat of new advanced technology, in near future, which will eliminate the work of film processing units. In USA and UK, experiments on new technology have been started. 2. Threat of New Entrant: For an industry threat can be sport like cricket world cup which comes once in 4 years. During world cup theatres incurs the loss of many unsold seats. But this threat is temporary one. Inside the industry one threat can be an entry of prevailing international players into the Indian market with the concepts like Spider man, Anaconda etc. which are totally different from Indian movies. 3. Bargaining Power of Buyers: a. Producers: For film producers, buyers are distributors. In case of reputed film producers like Yashraj Films, Dharma Production, Sanjay Leela Bhanshali etc. who have a track record of delivering successful films, bargaining power of distributors is very less. So there is less bargaining power of distributors. Distributors have to buy the rights of film at high price as said by the company. Where in case of other films distributors have high bargaining power and films are sold at low price or below the expectation level of the producers. b. Distributors: For distributors theatres are buyers. There is less amount of bargaining as prices are generally fixed and more or less same depending upon the contract and the mutual understanding. 37
  38. 38. c. Theatres: For theatres, buyers are public who can not bargain for the prices of tickets. But in many states, government has put some restriction on the prices of tickets. 4. Bargaining Power of Supplier: Big suppliers like film-processing units, camera and equipments suppliers, actors etc. generally have the fixed rate in the market. So less bargaining prevails. 5. Intensity of Competition: Film industry faces competition from other entertainment segments like amusement parks sports, television etc. In order to compete with them industry has come up with Video Games Section, Art Gallery, Music Station and Trendy Cafeterias inside the theatres which provides a complete family entertainment. And inside the industry the intensity of competition among producers is less but high in case of directors, actors, film processing units etc. 38
  39. 39. R E V E N U E C O N T E N T A U D I E N C E C E R T I F I C A T I O N P R O D U C T C L A S S I F I C A T I O N PRODUCTS Domestic Sales Overseas Sales Music Rights Telecasting and Video Rights Corporate Sponsorships and Merchandising Romantic Comedy Social Thriller Horror Patriotic Science Fiction Animation Kids Youth Family Niche Market Universal Adult Universal Adult Specified Audience 39
  40. 40. PROCESS FLOWCHART Output Output Output Output 40 Dubbing Backgroung Music Sound Effects etc. STORY WRITER /SCRIPT DIRECTOR PRODUCER HIRING OF TECHNICIANS, ACTORS, ACTRESS ETC. SHOOTING EXPOSED NEGATIVE FILM LABORATORY FINAL NEGATIVE CUTTING POSITIVE / RUSH PRINT RE-CORDING FINAL POSITIVEEDITING MIXED SOUND NEGATIVE RELEASE PRINTS FILM CERTIFICATION MARKETING DISTRIBUTORS CINEMA HALLS
  41. 41. PROCESS EXPLANATION The story writer provides story to director. Initially only the concept of the story is explained. Then director approaches the producer to finance the film. The making of film starts as soon as producer gets ready to finance. Story writer and director sit together to prepare the script which is made up of number of scenes. Sometimes it also happens that the same person acts as a story writer and a director. At the same time the director and the producer hire the actors, actress, technicians etc. And Shooting starts. After the completion of shooting, film roll is sent to film laboratory. The film roll undergoes a series of processes in the lab. The lab develops exposed negative along with rush print which is also called as positive. This positive is then delivered to editor but the negative is kept in the lab only. Editor also receives sound negative from sound recordist and assembles it with positive. And then he starts his work of sorting, cutting and editing the positive. He makes the film of two and half hours from 4 to 5 hours. And now final positive is ready. This final positive is sent to the lab for final negative cutting. Then the works of dubbing, background music and sound effects start. Re-corder mixes all sound effects and develops mixed sound negative which is also sent to the lab. The lab liaises with sound correction and editing positive resulting in the final or release print for the film. This film is then pre-viewed in a pre-view theatre as a form of quality check. One release print is then sent to the Central Board of Film Certification (also called the Central Board of Film Censors) in order to get film certificate. Then duplicate prints are made in lab. Side by side promotion activities are carried on by producer. The duplicate release prints are then passed on to distributors and from distributors to cinema halls at the time of launch of the film. 41
  42. 42. COMPONENTS Producer Animal Suppliers Art Directors Art Printers Artificial Plants Artists 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 Conversion Music Composers/Directors Stunt 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 Equipment Production Managers etc. (Source: www.filmplusindia.com/categ.html) 42
  43. 43. 5 MAJOR COMPONENTS 1. Direction 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. 43
  44. 44. 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. 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. 44
  45. 45. 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/ 45
  46. 46. 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. 46
  47. 47. Films Produced By Corporate Production Houses Production House Film Aamir Khan Productions Private Limited Lagaan Zee Telefilms Limited The Hero Balaji Telefilms Limited Krishna Cottage 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. BANK FINANCING FOR INDIAN FILMS Earlier, banks were wary of funding films, and producers borrowed money from private investors at interest rates as high as 25 to 35 %. The scenario has now changed, and financial institutions are more than willing to lend to film projects at the much lower rate of 16 to 17 percent. 47
  48. 48. Industrial Development Bank of India was the first institution to make an allocation of Rs 1 billion for the film industry for 2001-2002 and it sanctioned film financing to the tune of Rs 635 million in 2001 spread over seven projects floated by the likes of Crest Communication, Padimini Telemedia, VR Projects and D. Raama Naidu, which rose to Rs. 995 million in 2002. FILM PRODUCERS SANCTIONED BY IDBI Producer Amount sanctioned (Rs mn) Suresh Production 40 Crest Communications 200 Rajshree Productions 200 V.R. Pictures 70 F.K. Films 50 Alu Entertainment 25 Padmini Telemedia 50 (Source: IDBI) For instance, Canara Bank, which had earlier funded Gayab, is also bankrolling K Sera Sera Production’ forthcoming venture James. The movie has a budget of about Rs. 7 crore, 80% of which was funded by the bank. 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 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 48
  49. 49. INFRASTRUCTURE The infrastructure for films comprises of production, post-production and exhibition infrastructure. Production & Post-Production Infrastructure 49
  50. 50. 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. 50
  51. 51. 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 51
  52. 52. Taiwan 7.62 Thailand 7.00 Source: FICCI Report 2002 - Indian Entertainment Industry 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 52
  53. 53. 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. 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. FILM INSURANCE Most of the developmental work that has happened in the introduction of insurance cover for Indian films is attributable to Mr. Ajit Gupta, Development Officer of United India Insurance (UII), who is credited with pioneering this concept in the India film industry. The credit is also due to film makers like Subhash Ghai and Bobby Bedi, who have been the forerunners and proponents 53
  54. 54. of taking insurance cover for film production. The importance of insurance cover assumes significant importance in view of the concerns of institutional lenders, who want to mitigate risks associated with the film production process from multiple entities. Taal (1998) was the first Indian film to be insured for covering risks associated with the film during the production period. Since then, United India Insurance has insured more than 20 films with total production outlay in excess of Rs 1 billion. Till date, UII has settled four claims out of the films insured by it. The first claim was from Yash Raj Films India Ltd. for a month’s delay in the completion of its film, Mohabattein, due to postponement of shooting caused by an injury to the heroine, Aishwarya Rai. Other films that have received compensation for production delays include Dil Chahta Hai (unseasonal rains in Australia), Saathiyaan (camera malfunctioning) and Badhai Ho Badhai (Anil Kapoor had to hospitalised due to a leg injury). The Economic Times Entertainment Report 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. 54
  55. 55. 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. 55
  56. 56. 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 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 56
  57. 57. 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 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 57
  58. 58. 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. 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 58
  59. 59. 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. 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 59
  60. 60. 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 CASE STUDY : ADLABS FILMS LTD. The promoters of the Company, Mr. Manmohan Shetty and Mr. Vasanji Mamania, formed a partnership firm, M/s Adlabs in 1978 for processing of films. Initially, they concentrated on processing of advertisement and 60

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