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Bollywood: Entertainment in Mumbai

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Jonathan Yan

on 9 October 2013

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Transcript of Bollywood: Entertainment in Mumbai

Bollywood: The Film Industry of Mumbai
The Development of Film Industry in Mumbai
The history of Indian Film Industry --- spans a century
PEST Analysis
The End
In conclusion, Bollywood has its strengths, but faces weaknesses as well
Must deal with issues such as copyright, profit issues, etc.
No denying its popularity
But still far away from Hollywood
SWOT analysis
By: The Indians
Porter’s Five Forces Analysis
Brief Introduction of India
In the world...
2nd most population
7th largest country in terms of area
10th largest economy in terms of nominal GDP
3rd largest economy in terms of GDP (PPP)
General Information & Figures About India
Mumbai (a.k.a. Bombay)
the capital city of the Indian state of Maharashtra
the most populous city and a financial and commercial capital in India
the 4th most populous city in the world
lies on the west coast of India
has a deep natural harbour
In 2009, Mumbai was named an alpha world city

Mumbai: Economy
Key sectors contributing to the
economy are:
Gems and jewelery, leather, IT and ITES, textiles, and entertainment

Financial institutions:
The Reserve Bank of India
The Bombay Stock Exchange
The National Stock Exchange of India
Mumbai: Culture & Religion
Home to many film studios:
e.g. Film City in Goregaon, Raj Kapoor's R.K. , studios in Chembur, Filmistan, Shashadhar and Mukherjee's Filmalaya, V Shantaram's

2 world heritage awards from UNESCO
Chhatrapati Shivaji Terminus
Elephanta Caves
The status of Film Industry in Mumbai
Bollywood-------A nickname of the film industry of Hindi films that located in Mumbai
"Bombay"+"Hollywood"="Bollywood"
The largest film producer in India and one of the largest centres of film production in the world.
Built in 1947,covering more than 600 hectares.
Produced more than 1,000 movies every year, twice as the output of Hollywood,sold tickets about 3.1 billisons per year.
Take up about 60%-70% of national film production
Mumbai Filmcity
Full name------Maharashtra Film, Stage & Cultural Development Corporation Ltd.
Established in 1977 by the Department of Cultural Affairs Government of Maharashtra
Covering about 500 acre,one of the most large film city in the world
Provided shooting locations for film company
Over 60% of Indian motion pictures, television serials and commercials are produced in Mumbai and Filmcity has share of 30% of above work related to film production.

The Current Situation and future of Film Industry
Now,nearly 100 film studio,13,000 cinema,over 500 film magezines,more than 300,000 practitioners
More than 30 billions audience per year.
Spread to whole world
Foreign invest up to 700 million dollars in 2008
In the next 5 years,the India film industry scale may grow from $ 2 billion to $ 3.6 billion.

Political
Movie Industry --- identified by the Government as one of the most important sectors for India’s export oriented growth
The Govt. Of India accorded Industry status to Bollywood in 2001
The Indian government needs to have a better long-term vision about how it wants to promote filmmaking in the global market.

Economy
Mumbai is the financial and commercial capital of the country as it generates 6.16% of the total GDP.
In 2008, the Globalization and World Cities Study Group has ranked Mumbai as an "Alpha world city".
The Bollywood industry had revenue of US$ 3 billion in 2011, and has been growing at approx. 10.1% a year. The revenue is expected to reach US$ 4.5 billion by 2016.
Indian box offices are expected to take over UK and Australian markets in the next few years
UTV Motion Pictures will be co-producing and distributing Disney films in India.

Social
Large English-Speaking workforce
High-quality software engineers
A large pool of creative talent
Bollywood gives employment to lots of people in Mumbai
However, almost 35% of India’s over 1 billion population is illiterate.
Television compared with movie is a highly popular medium as a source of information in the Indian countryside as it demands less of cognitive skills of audiences

Economy Cont'd
Walt Disney has invested around US$ 324 million in a deal with Yash Raj Films
Reliance Big Entertainment signed a deal worth US$ 1.2 billion with Steven Spielberg’s ‘Dream Works SKG’ to produce 36 films for the next 6 years
The cost of outsourcing one hour of movie work to India is estimated to be 30% to 40% of the corresponding costs in leading animation centres in Korea, Taiwan and the Philippines. Many multinational firms and production studios come to invest in India Movie Industry.

Technological
Although Indian companies carry out the technological animation work; character design, and storyboarding are outsourced abroad
India is yet to become a successful player in concept creation, the high value-adding segment of the industrywhich remains a preserve of western firms
India’s advantages of low costs in this industry will be too short-lived, and sooner the country will have to start developing new technologies
booming animation outsourcingindustry is constantly demanding new skills and fresh infusion of new talent into the industry
Skills required inthe animation field can be clubbed under two broad categories,mainly technical skills and soft skills. (Programming expertise,analytical ability, and proficiency on the software are basicrequirements for technical skills.)
Strengths
* Bollywood is no more a ‘Made in India’ brand -- become an international brand

* Produces > 1000 films per year and has more than 14,000,000 viewers who visit theatres daily to watch Bollywood movies all over the world.

* Bollywood movies compete with Hollywood movies for their slots in theatres

* The volume of Bollywood movies released worldwide has become TWICE the number of Hollywood movies

* Gives employment to lots of people around the world

* Low budget movies have generated more revenues in box office hit
Weaknesses
* Has more volume of movies released every year but very few movies get back their return on investments

* Many movies fail to make even a little impact to the audience as the movie release per month is very high

* Repetition of story script and duplication of music tracks makes people lose interest for movies

* Bollywood movies spoil the rich Indian values and sentiments and inflict wrong culture in younger generation’s mind by influencing western practice and lifestyle

* Small producers cannot shell out more money for their movie promotions and advertisements
Opportunities
* Viewers for Bollywood movie are increasing every year

* International brands like L’Oreal prefer Indian celebrities to be their brand ambassadors for their global market.

* Reliance Big entertainment has signed deals with production companies of Brad Pitt, George Clooney, Tom Hanks, Nicholas Cage, and Jim Carrey, etc.

* The overall Indian movie market is expected to grow at a rate of 14% YOY.

* Ficci-KPMG report has mentioned in its report that the revenues from Media and Entertainment (M&E) would reach INR 1.3 Trillion by the year 2015.
Threats
* Government and sensor board regulations are becoming high due to the increase of adulthood and violence scenes in movies

* Pirated CDs and DVDs impose a major threat to this industry

* Movies are watched and shared across internet

* Many movies face legal issues and threats from political parties during their releases

* Negative reviews on websites and social media are major threats
Threat of New Entrants
Low
Consists of few large studios
Cost of films are expensive, creating high barrier to entry
Indian banks and financial institutions are legally forbidden to fund movies

Threat of Substitutes
Medium
Bollywood is a staple in the Indian film industry
Major Problem - Copyright Infringement
Pirated DVDs appear on the market in a short amount of time a films are shown in theatres
This problem can be (and is usually) resolved by selling ancillary rights

Bargaining Power of Consumers
Bargaining Power of Suppliers
Low
Film Industry: Suppliers = Actors/Film Crew
Employs people from all over India
An abundance of aspiring actors/actresses
Aside from “Big Name Stars”, others are paid minimal

Competitive Rivalry
Low
Bollywood is only one part of the Indian film industry (Mumbai)
By far the largest film producer
One of the largest centers of film production in the world
In a class of its own

Porter’s Five Forces Summary
Medium
Pirated DVDs are available on the market
For high quality films only available in theatres or through official Bollywood streams
For those who are quality conscious, official routes may be the only option
Movie Industry in the U.S.
Statistics
In 2012, the entertainment sector as a whole has generated nearly 500 billion USD in revenue
Forecasts predict that the entertainment industry will grow to over 632 billion USD in next five years
Annual ticket sales remains at a high level of $10billion USD on average

Hollywood vs Bollywood
Similarities and Differences
Similarities
Strengths: Target international market; Increase exports
Opportunities: Global demand keep on increasing/ Expansion
Threats: More regulations/ Pirated DVDs / internet
Hollywood Porter's Five Forces
Hollywood SWOT Analysis
Hollywood, has had a profound effect on cinema across the world since the early 20th century
Since the 1920s, the American film industry has grossed more money every year than that of any other country

High global demand for movies
U.S.’s second largest export

International expansion (Latin America)
Different programming (sports, plays, musicals)
Tap into niche markets (independent films, film festivals)
Decreasing theatre attendance rate
Saturated market

Online movies
Free downloads
Increasing competition (e.g. China/ HK)

Intensity of Rivalry
Medium to High
4 main competing firms
Same ticket prices
Same products/ services

Bargaining Power of suppliers
Medium to High
Suppliers = Movie Studios
Can charge basically whatever they want for new movies

New Entrants
Low threat
Established market
High Entry Cost
Bargaining Power of buyers
Low
Mainly consumers aged 12-24
Multiple options (AMC, Regal etc)
Low switching costs


Threat of substitute Products
Medium to High
Can be hard to re-create the “experience”
Growth of home theater systems
Weaknesses: Quantity vs Quality / Revenue
Cultural factors: different themes
Bollywood
-> upbeat and optimistic in nature, featuring strong family values with very little sex or violence
-> Mainly joyous spectacle of community, religion, family, music, dance, and love
Hollywood
-> Famous for action movies
Full transcript