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Breakthroughs (1/3)• 1902:The Electric Theatre, the first movie theatre built, by Thomas Lincoln Tally in downtown Los Angeles. Admission was 10 cents for a one-reel movie.• 1906:The first feature film ever made was The Story Of the Kelly Gang , an Australian film based on the infamous Ned Kelly• 1914: Charlie Chaplin makes his first movie, “Making a Living,” filmed on 35 mm in Los Angeles• 1927: Synchronized dialogue-The Jazz Singer• 1928: Mickey Mouse debuted in the first synchronized sound cartoon “Steamboat Willie” by the Disney Brothers Production Company.• 1933:The Writers Guild of America is formed from the Screen Writers Guild, formerly a social club, when the film industry tried to institute a pay cut.
Breakthroughs (2/3)• 1941:The first commercial (aka. sponsored) television broadcast is held by ten stations who received licenses from the FCC.• 1950:The Supreme Court ruled that movie studios could not own theatres and play only the movies of their studio and movie stars .• 1951:First commercial colour TV program airs. Hollywood responds to decreasing film sales with colour and wide-screen presentations.• 1952: Polarization 3-D System(Bwana Devil‘)• 1961:Regular in-flight movies begin with a TWA flight between NY and LA who showed “Love Possessed,” starring Lana Turner.• 1967 Clint Eastwood becomes the Man With No Name, one of the first anti-heroes, in “A Fistfull of Dollars.”
Breakthroughs (3/3)• 1973:George Lucas makes history by signing a deal with Fox for 40% of the merchandising rights on a little picture known as “Star Wars.” In 1977, Star Wars debuts to gross 200 million dollars and invents the blockbuster season.• 1991: Computer-Generated Imagery (“Terminator 2: Judgment Day” )• 1995: Computer Animation(“Toy Story” )• 2002: Digital Cinematography -Star Wars Episode II: Attack of the Clones• Live Animation-Tintin
Breakthroughs India Roadside RomeoRaja Harishchandra PVR Sheila Theatre First Indian 3DFirst Indian Feature First Modern Multiplex, First 70mm Theatre, Delhi Animation by YRF Film Delhi & Walt Disney 1913 1961 1997 2008 1931 1974 1998 Alam Ara Ek Anek Aur Anek Chota Chetan First indian Sound Animation movie on DD First Indian 3D Film for edu prurpose
Stakeholder Analysis: Users• Morning Show (Weekdays): School and College Students• Morning Show (Weekends): Middle class families; Movie enthusiast; friend groups• Animation and superhero films: Kids & Teenagers• English/ Hinglish Films: Big Metros and Tier 1 cities• Family Movies: 40+ or families together on weekends
Certified films by Language Source: Central Board of Film Certification.
Stakeholder Analysis: Genre• Pan-India Films These are the kind of films that are accepted by all the classes. Be it the big metropolitan city or the most rustic region of the country, people from both the places easily relate to such films.• Masses The films falling into this category sell well among the masses. They have elements of all emotions drama, comedy, actions etc. and hence these films are popularly known as Masala films. This is mainly escapist cinema and therefore is popular among the masses as it takes the audiences in a completely different world altogether.• Urban This is one category that has come up in recent times. These days many films are coming up that are based highly on the urban culture in the most advanced cities in the country.
• Film Festivals oriented This is a new category of films that has come up in the Indian cinema recently. Some of the films from this category are 15th Park Avenue, 13th Floor, Quest, Water, The Last Monk and Hope And A Little Sugar.• Low grade Sleazy films The low grade, soft porn films has always had a small but religious segment of target audiences. These films are mainly low budget, with hardly any focus of creativity as the basic aim is to just sell sex. But though they have low production value, these movies do make profits from smaller sectors and a select few theatres in urban areas, which are devoted to play only sleazy films.
EROS INTERNATIONAL PYRAMID SIAMIRAUTV SOFTWARE COMMUNICATION YASH RAJ FILMSPVR Ltd. INOX LEISUREMUKTA ARTS FAME INDIACINEMAX PRITISH NANDY COMMUNICATIONS 1% 3% 3% 5% 23% 7% 8% 9% 21% 20% Source: The Indian Media Business 2011 Edition
At a glance 2010 2015 CAGRMarket Size 1.94 3 9.3%Domestic box Office 1.36 2.2 10.1%Overseas Box Office 0.17 0.28 10.2% Figures in USD billion Average Ticket price(ATP) & Admissions Country ATP(USD) Admissions(millions) USA 7.89 1345 Canada 8.19 120 UK 8.96 166 China 4.34 345 India 0.69 2000 Source: PWC Global Entertainment & media outlook 2011-2015
Movie Distribution Process• The film upon its completion is sent to the studio. Producers can recover up to 30 per cent of the cost of the film by pre-selling it to distributors.• The studio makes a licensing agreement with a distribution company.• The distribution company determines how many copies (prints) of the film to make.• The distribution company shows the movie (screening) to prospective buyers representing the theatres and multiplexes. After the screening the prospective buyers estimate the commercial possibilities of the film and decide whether they will distribute the film or not.• The buyers negotiate with the distribution company on which movies they wish to lease and the terms of the lease agreement.• The prints are sent to the theatres and multiplexes a few days before the opening day.• The theatre and multiplexes shows the movie for a specified number of weeks (engagement).• The end user i.e. Viewers pay for a ticket and watch the movie. At the end of the engagement, the theatre and multiplexes send the print back to the distribution company and make payment on the lease agreement.
Movie Distribution• Given the levels of risk and contingency film distribution is in many ways a highly complex process .• India is divided into 11 distribution territories many of which are further divided into sub- territories. 1. Mumbai- Mumbai city, Gujarat, parts of Maharashtra, parts of Karnataka and Goa. 2. Delhi-U.P.: Delhi city, Uttar Pradesh, and Uttaranchal. 3. East Punjab: Punjab, Haryana, Chandigarh, Himachal Pradesh, and Jammu and Kashmir. 4. Eastern Circuit: West Bengal, Bihar, Jharkhand, Orissa, Assam and North eastern States, Andaman and Nicobar Island, and Nepal. 5. Central Province : Eastern Maharashtra, southern and western Madhya Pradesh, Chhattisgarh. 6. Central India: The rest of Madhya Pradesh. 7. Rajasthan 8. Nizam: Hyderabad city, parts of Andhra Pradesh, parts of Maharashtra. 9. Mysore: Bangalore city, parts of Karnataka. 10. Tamil Nadu: Tamil Nadu, Kerala. 11. Andhra: Parts of Andhra Pradesh.
Movie Distribution 2010 Source: FICCI KPMG Report 2011
Andhra Pradesh 21% Tamil nadu 24% Kerela Karnataka8% 19% Maharashtra 9% Uttar Pradesh 9% 10% Other Source: Cinema owners & Exhibitors Association of India
Hindi Marathi 16% 17%8% Telegu Bengali 9%11% Tamil Kannada 14% 16% 9% Malayallam Others Source: Film and Television Producers Guild of India
• In terms of revenue generated, south Indian movies dominate Bollywood. Films made in Tamil, Telugu, Kannada and Malayalam are said to generate about Rs 1700 crore. This amount is about three-fourth of the total Indian film revenue. In addition to that, Telugu film industry alone churns more number of movies than Bollywood. Last year about 230 films were released in Telugu.• Income generated: South Indian Movies Vs. Bollywood
Revenue sharing• June 6 2009-film producers are to get half of the revenue for the first week of releases and a smaller share for each subsequent week: 42 percent for the second week, 37 for the third and 32 for the fourth. Distributors and producers will earn bonuses for films that do exceptionally well but will have to pay rebates for movies that do very poorly.• Under the previous movie-by-movie negotiation system, producers and distributors said that they often got less than 50 percent of revenue and that theatre owners would collectively dictate terms to distributors. The theatre owners denied that they had colluded and said producers and distributors often received the majority of revenue from successful movies.
Ways of Movie Distribution• Standard release: This routine for a movie is regulated by a business model called "release windows". The release windows system was first conceived in the early 80s, on the brink of the home entertainment market, as a strategy to keep different instances of a movie from competing with each other, allowing the movie to take advantage of different markets at different times. In the standard drill, a movie is first released through movie theatres “theatrical window”, then, after approximately few weeks, it is released to DVD “video window”. After an additional number of months it is released to Pay TV and VOD services and approximately a year after its theatrical release date, it is made available for free-to-air TV. I. Wide release is a term used for a motion picture that is playing nationally. Specifically, a movie is considered to be in wide release when it is on 600 screens or more in the United States and other countries. Source: FICCI KPMG Report 2011
II. Roadshow theatrical release is when a film is opened in a limited number of theatres in large cities for a specific period of time before the nationwide general release. Such releases were shown only once or twice a day. Although variants of roadshow releases occasionally still exist, the practice mostly ended in the early 1970s. III.Limited release is played in a select few theatres across the country. It is often used to gauge the appeal of specialty films (documentaries, independent films and art films). A common practice by major film studios is to give highly anticipated and critically acclaimed films a limited release.• Simultaneous release: It takes place when a movie is made available on many media at the same time or with very little difference in timing. Simultaneous releases bear great advantages to both consumers, who can chose the medium that most suits their needs, and production studios that only have to run one marketing campaign for all releases. The flip side, though, is that such distribution efforts are often regarded as experimental and thus, do not receive substantial investment or promotion.• Straight to video: Such release occurs when a movie is released on home video formats (such as VHS, DVD, etc.) without being released in theatres first, thereby not taking into consideration the "theatrical window". As a result of strong DVD sales, STV releases also achieved higher success and have become a profitable market lately, especially for independent moviemakers and companies in mature markets.
Classification Of Distributors Yash raj P.P. Associates, Bobby ArtsDistributors handling more than 6-8 films per International , Mukta Shakti Combines , Ginni year. Arts Eurasia Visuals , Honey Enterprises, Jyoti Distributors handling 2-3 films per year. Films, Competent Films, Magnum Films, Ekta Films Pooja Enterprises (films by Vishnu Bhagnani), Eagle Films Pvt. Ltd. (F.C. Mehra), Ajit Distributors handling films for particular Films (Gulshan Rai) Shivangi/ Sunny Film producers Network (Deol Family) Rajshri Films (Barjatya Family)Distributors handling mainly older repeat run Chand Pictures, Charu Films, VIP Filmfilms (rights for the film usually bought from Distributors, Deepak Arts, Sultan Pictures the above three categories of distributors) Distributors handling mainly B Grade Pankaj Raj Movies, Saraswati Pictures, Devi Foreign/Soft Porn Films Shakti Films, Raj Karan Movies
Financial sources for distribution• Distribution of film needs huge amount of funds. Most distributors invest money from their own funds, which circulates in the distribution business. Distributors also borrow money from different private financiers (including black money from the underworld).• Reputed distribution companies like Yash Raj productions and UTV borrows money from Banks on the strength of their balance sheet. They also collect funds from IPOs like PNC or go to individual high net worth individuals or companies to put in money as equity.• Distributors also get financial support from theatre owners who are eager to exhibit a particular film at their theatre. The lack of institutional finance is the biggest problem for regional film industry.
Major problems confronted by Distributers• Financial : The cost of distribution is very high in India. Cost of making one print works out to be about $1200, the cost of its releasing more than 500 prints can be almost $ 600 thousand (close to 30% of the average cost of making movie)• Problems with theatres : Sometimes distributors face problem in fixing up terms of agreement with the exhibitors. The holdover figures are often fixed too high and it is inflated quite often. after a few weeks, even if the film has not reached the holdover limit, they play tricks to show the holdover has reached on a particular day and stop screening the film before it has completely exploited the market. In areas where the number of theatres is few, there is a problem of getting theatres on time for films. Another complaint is that the theatres do not reveal the correct accounts of collections to the distributor.• Piracy : Piracy is one of the major problems affecting trade in this segment. At present, there is no uniform method of estimating the contribution of core copyright industry to the GDP and the potential loss of revenue due to piracy. According to the Film Federation of India, the film industry is loosing approximately US$ 76 million per annum in revenue due to piracy.
International Distribution• Historically Indian films are very popular in Asian countries, Arab countries, Russia and African countries.• Bollywood films have huge fans in Iran, Pakistan, Bangladesh, Sri Lanka and Nepal.• Bollywood also has a strong hold in South East Asia in countries such as China, Indonesia and Malaysia. The fascination of Bollywood came to light in China during the Dilip Kumar era.• Bollywood is hugely popular in Africa with over 60% of African Nations becoming a commercial success for Bollywood.• After liberalization some of the domestic film production giants started to explore the possibilities of international market.• Film exports have grown from more than US$ 48.4 million in1998 (198 titles) to around US$ 111 million in 2001. Presently Indian films are exported to around 95 countries world wide. Among them the US and Canada accounted for 30% of the total exports (by volume of prints0 in the year 2000, followed by the UK (25%)• According to FICCI FRAMES Conference annual growth rate (CAGR) of 18% which is higher than the CAGR of the domestic box office at 16%.Source: Audio-visual Policies and International Trade: The Case of India, HWWA-Report, Hamburg Institute of International Economics
Entertainment Tax• Exhibition of cinema films by cinema halls or theatres having valid licence for exhibition under the Cinematograph Act, 1952 (Central Act 37 of 1952) and under the Goa, Daman and Diu Cinematograph Rules, 1965:• (a) On payment for admission not exceeding Rs. 50/-. Nil. (b)On payment for admission exceeding Rs. 50/- 25 %of the amount paid for admissionNote: For tickets exceeding denomination of Rs. 50/-, the entertainment tax should be charged separately in the ticket.
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