good old ameture thinking of film business and infilm advertising ... (2004)

1. Cost structure
Break up of cost for typical movie is as under
Production Expenses 40 %
Technical Remuneration 17%
Artist Remuneration 22%
Advertisement & Publicity 15%
Personal Cost 1%
Fixed cost 5%
Let's consider two types of costs which are of critical importance.
1. Production expenses:
This constitutes the sizeable part of the total structure and becomes
critical. There is ample scope to reduce the cost of the producing a film
thus break even cost gets reduced.
2. Advertising and promotional expenses:
Typically in India this cost is 15 % of the total budget but in Hollywood
this may go upto 25 -30 %.

2.  Promotional time spots on television
 Participation in various shows
 News paper advertisements
 Outdoor- hoarding, bus shelters, posters etc.
Proper media planning and buying will ensure the maximum mileage out of
these expenses.
Distribution:
This another crucial area of the business let's take an overview of the
existing avenues for distribution.
Theatres
In early 90's domestic theatrical rights use to constitute 90 % of the
total revenue but late 90's showed us that this percentage has come
down to 33% for few big movies. Whatever the new avenues may be still
this channel would be in a commanding position.
State No. of theatres (%)
Andhra Pradesh 2,759 21.4
Tamil Nadu 2,466 19.1
Kerala 1,338 10.4
Karnataka 1,220 9.5
Maharashtra 1,148 8.9
Uttar Pradesh 1,018 7.9
Others 2,951 22.9
Total 12,900 100.0
(Source: Film Federation of India)
Television:
In FY 2000 satellite channels are reported to have purchased rights
about 1500 movies at a total cost of Rs.250 Cr that means Rs. 16 Lakhs
per screening of a movie.
Infilm Advertising:
This form of advertising is comparatively new started just before three
years. Taal is the landmark and due to Coca-Cola advertisements this
form got noticed.

3. Producers raise revenue to produce a film through following avenues
1. Distributors
2. Music rights
3. Overseas rights
4. Television rights
5. Infilm advertising
Barriers:
The one and only barrier for gaining revenue by this avenue is the trust
of the advertiser. Producers like Mukta films have no problem in assuring
the returns for the every advertising money spend.
Advertisers are skeptical about the new producers in following manners
A. The way the product should be handled.
B. Uncertainty of the numbers i. e. reach
Probable Solutions:
These both the things can be address separately
a. Handling of the product:
Client's requirement should gel with the storyline and characters in the
movie. Image of the product must coincide with the image being
portrayed. If clients falling under this category are contacted then it will
be easy to convince them as well as get the best out of the available.
For e.g. suppose the movie is all about the college going people then all
the products like motorbikes (lifestyle product), perfumes etc can be
advertised effectively.
In this way client can be assured of certain degree of mileage.
b. Money for every single penny in terms of reach:
As we have already discussed, for established producers this is really not
a problem. But for newcomer this is the problem. Advertisers trust is
the vital point.
So as to break this cloud of suspicion we may practice the term called
CPRP (Cost per rating points) in television industry. Instead of selling just
a time slot and space we would attach the CPRP to that.

4. Cost incurred by the advertisers will depend on the number of people who
will view the footage.
E.g. supposing advertiser is suspicious about the number of people getting
exposed to the Infilm advertising i.e. collection at box office.
We may offer him the proposal considering following things.
a. Sell cost pet thousand (CPT) costs to be incurred would be based on
the box office collections.
b. We will book the spaces on the television channels for promotions and
that number can be added to the proposal to assure the exposures.
c. If the song is branded then in pre launch promotions we can assure
the airing of the song on various channels as a promotion as well as
normal airing on music channels.
d. There are agencies like 'lintertainment" which are part of the big
advertising agencies we may contact them and explore the
opportunities to advertise the products of their clients.
All these things can be included in the proposal to give the weight to it.