44822124 Bollywood Economy

8/8/2019 44822124 Bollywood Economy

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Bollywood Economy

ECONOMYCONOMY


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Group G5Anwar SadathJoshin Shaji C

Poulomi Das

Sachin C D

Sudeep Babu

SOP owner- Mr. Cris Abraham


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ContentBollywoodIndian economyEconomic aspects of BollywoodLeading players in the industry

Economic growth of the industry in the last 5yearsMovies that contributed to the growthComparison with other regional movie industriesImpact of Bollywood on other industries

Reason for the high rate of investment into theindustryImpact of recession on the industryBenefits to governmentConclusion


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BollywoodPopularly known as Hindi film industry. Based in Mumbai, Maharashtra.

Originated in 1913.

Term coined in 1970s, inspired byTollywood, the Bengali film industry.

Often used to refer to the whole Indian filmindustry.

Unlike Hollywood it does not have a physicalexistence.


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Entertainment industry inIndia

The ministry of information , broadcasting andmedia is managed by Ms Ambika Soni, MP.

Entertainment industry in India comprisestelevision industry, different film industries,theatre, music industry, etc.

An amount ofn103 crores has been allotted towards the development of the film industries by the government in Budget 2010-2011.


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Indian Economy


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Characteristics:

Mixed economy.

Both Govt. and private sector have

influence over the economy.Liberalized economy.

Labour intensive.

Low level of income and capital formation.

Low order of resource utilization.


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Considered as a low income country by World

Bank, with the Gross National Income of US$549.

Great inequality in the distribution of wealth:

the richest tenth of households hold 33% ofwealth, while the poorest tenth only hold 3%.

86% of the population lives under $2 per day;44% lives under $1 per day.


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Indias economic projections

Source: report from Federation of Indian Chamber of Commerce andIndustry, New Delhi dated September, 2010

2008 2009 2010

GDP

growth

7.30% 5.40% 7.60%

CPI growth 9.30% 5.50% 4.90%


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Economic aspects ofBollywood


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The Rs.130-billion ($2.85 billion) industry isone of the fast growing sectors in thecountry with expanding global reach.

Approximately 250 movies are producedeach year, ranging from budget of $2million to $50 million.

During the last decade, exports have grown

from Rs.100 million ($2.18 million) toRs.1.5 billion ($32.85 million).

The industry is expected to grow at the rate

of 19 percent and reach a turnover of overRs.260 billion ($5.7 billion) by 2011.

Provides em lo ment to more than 1,75,000


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In the year 2009 , 27% of the moneyinvested in the industry was from NRIsand it rose to 31% this year.

Recently, the Govt has diluted therestrictions regarding FDI into the mediaand entertainment, which allows theNRIs to pool in funds into Bollywood.

The industry makes an annual income ofmore than US$500 billion a yearapproximately.

The industry is growing at the rate of11.2% er ear.


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Leading Players in the

industry


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Yashraj filmsRed chillies productionEros internationalUTV Movies

Shree Ashtavinayak Cinevision Pvt. LtdSheemarooDharma productionsKaleidoscopePercept picturesBhandarkar productions


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Yashraj FilmsYash Chopra- MDAditya Chopra- CEO

Highest grosser in the entertainmentbusiness.

Collectively, 8 of the recent YRF productionshave grossed in excess of200 Million USDollars worldwide.

Produces almost 5 movies a year, budgetranging from

40 crores 90 crores.

Employs more than 35000 people ranging

from technicians to junior artist andflimstars.


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Red Chillies ProductionOwners Shah Rukh Khan and Gauri Khan.Recent collaboration with Dharma

productions.

Also into advertisement and television

industries.Produces 3 movies on an average per year,

ranging from 30 crores 75 crores.

Have earned a revenue of US$ 160 millionfrom USA, UK and UAE, in 2009-2010.

Employs nearly 19,000 people.


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Eros International

Owner - Komal Nahta

Have a strong hold on the overseas marketsof USA and UAE.

Produces 5 movies on an average each year,

10 crore 50 crore .

Have earned a revenue of US$ 135 millionfrom USA and UAE, in 2009-2010.

Employs nearly 14,000 people on temporarybasis.


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Eros International

Year

Class ofshares

Authorize-d capital

Issuedcapital

Paid upshares(no.)

Paid upface value

Paid upcapital

2009-2010

Equityshares

125.00 71.41 7,14,07,000

10.00 71.41


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UTV Movies

Chairman Naresh ChandraConcentrates on only small and medium

budget films, ranging from .2 5 crores 10crores .

Popular mostly in south- east Asia and UAE.Have earned a revenue of US$ 105 million

from overseas trade, in 2009-2010.

Employs nearly 9,000 people .


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Shree AshtavinayakCinevision Pvt. Ltd

Chairman & MD- Dhilin H. MehtaBoard of directors Ms.Seema D. Kar, Mr.

Amit A. Behl, Mr. Kiran B. Mistry.

Dont have a strong hold on the overseas

markets . Popular mostly in south- eastAsia.

Produces 5 movies on an average each year,

10 crores 45 crores.Have earned a revenue of US$ 95 million

from overseas trade, in 2009-2010.

Employs nearly 11,000 people on temporarybasis.


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Growth of the industry in thelast 5 years, 2005-2010


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Year No. of filmsproduced

FDI in%

Annualinvestmentin n

crore

Revenueearned in m

crore2006 284 11 960 1305

2007 249 17 840 1700

2008 273 20 875 1585

2009 241 27 985 23552010 235 31 1060 ---------

-Source report from Research institute of media planning and, management August 2010


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.

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Year


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%

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Years


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Re

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Fastest growing industry in India.

Contributes 29% to the growth of Indianeconomy.

Expected to be the largest contributors ofgrowth in India.

Industry is attracting more and more FDI.

Annual investment is increasing at a rapid

rate.


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Recent movies that added to

the revenue of the industry

Top five highest grossing


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Top five highest-grossingBollywood films in India

Rank Movie Year Studio(s) Net Gross

(accordingto BOI)

Net Gross

(accordingto IBOS)

1 3 Idiots 2009 Vinod Chopra ProductionsRs.2,02,57,00,000

Rs.1,89,38,74,7292 Dabangg 2010 Arbaaz

KhanProductions

Rs.

1,40,00,00,000

Rs.

1,42,48,31,0003 Ghajini 2008 Geetha ArtsRs.

1,14,67,00,000

Rs.1,17,48,22,7564 Raajneeti 2010 Prakash

JhaProductions/UTV Motion Pictures

Rs.

92,93,00,000

Rs.

94,89,66,316

5 Rab Ne Bana Di Jodi2008 Yash Raj FilmsRs.86,78,00,000

Rs.73,52,37,848
http://en.wikipedia.org/wiki/Vinod_Chopra_Productionshttp://en.wikipedia.org/wiki/Vinod_Chopra_Productionshttp://en.wikipedia.org/wiki/3_Idiotshttp://en.wikipedia.org/wiki/Vinod_Chopra_Productionshttp://en.wikipedia.org/wiki/Vinod_Chopra_Productionshttp://en.wikipedia.org/wiki/Vinod_Chopra_Productionshttp://en.wikipedia.org/wiki/Dabangghttp://en.wikipedia.org/wiki/Geetha_Artshttp://en.wikipedia.org/wiki/Geetha_Artshttp://en.wikipedia.org/wiki/Ghajini_(2008_film)http://en.wikipedia.org/wiki/Geetha_Artshttp://en.wikipedia.org/wiki/Geetha_Artshttp://en.wikipedia.org/wiki/Raajneetihttp://en.wikipedia.org/wiki/Yash_Raj_Filmshttp://en.wikipedia.org/wiki/UTV_Motion_Pictureshttp://en.wikipedia.org/wiki/Rab_Ne_Bana_Di_Jodihttp://en.wikipedia.org/wiki/Rab_Ne_Bana_Di_Jodihttp://en.wikipedia.org/wiki/Yash_Raj_Filmshttp://en.wikipedia.org/wiki/Yash_Raj_Filmshttp://en.wikipedia.org/wiki/Yash_Raj_Filmshttp://en.wikipedia.org/wiki/Rab_Ne_Bana_Di_Jodihttp://en.wikipedia.org/wiki/UTV_Motion_Pictureshttp://en.wikipedia.org/wiki/Raajneetihttp://en.wikipedia.org/wiki/Geetha_Artshttp://en.wikipedia.org/wiki/Ghajini_(2008_film)http://en.wikipedia.org/wiki/Dabangghttp://en.wikipedia.org/wiki/Vinod_Chopra_Productionshttp://en.wikipedia.org/wiki/3_Idiots


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Comparison with otherregional

movie industries


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Other film industries in IndiaTollywood (Bengali)Tollywood (Telugu)Mollywood (Kerala)Lolywood (Lucknow)Ollywood (Orissa)

Kollywood (Tamil Nadu)Sandalwood (Karnataka)Bhojpuri film industryMarathi film industryPunjabi film industryGujrathi film industryAssamese film industry


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Tollywood

The Bengali film industry.

Approximately 160 movies are producedeach year, ranging from budget of $20,000

to $3,00,000.

Provides employment to more than 65,000people. Has employment generatingcapacity of nearly 1500 per year.

There has not been any contribution to the

industry through FDI.


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The industry makes an annual income ofmore than

US$60 million a year approximately.

The industry is growing at the rate of 7.2%per year.

Annual income of the industry adds to only4% of the growth of Indian economy.


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Mollywood

The Malayalam film industry.

Approximately 90 movies are produced eachyear, ranging from budget of $200,000 to$5,000,000.

Provides employment to more than 35,000people. Has employment generatingcapacity of nearly 1100 per year.

There has been contribution to the industry


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The industry makes an annualincome of more than US$110 million a year

approximately.




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Telugu film industry

Approximately 100 movies are

produced each year, ranging from budget of$70,000 to $9,00,000.

Provides employment to more than 30,000people. Has employment generatingcapacity of nearly 1000 per yearapproximately.

There has been 11% contribution to the

industry through FDI.


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The industry is growing at the rate of 7.8%

per year.



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Bhojpuri film industry

Approximately 75 movies are produced each year, ranging from budget of $30,000 to

$2,00,000.

Provides employment to more than 32,000people. Has employment generating capacityof nearly 1700 per year approximately.

There has been no contribution to the industrythrough FDI.


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The industry makes an annual income of

more than US$15 million a year approximately.




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Ollywood

Approximately 60 movies are produced each year, ranging from budget of $60,000 to

$2,00,000.

Provides employment to more than 15,000people. Has employment generating capacity

of nearly 2000 per year approximately.

There has been no contribution to the industrythrough FDI.


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The industry is growing at the rate of 5.2%

per year.

Annual income of the industry adds to only1.7% of the growth of Indian economy.


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Comparison with Bollywood

No. of filmsproduced Growth rateof theindustry in%

Annual FDIin % % ofincomeadded toIndianeconomy

(approx.)

Bollywood 250 11.2 31 9.2

Tollywood 160 7.2 No 4

Ollywood 60 4.7 No 2

Telugu film

industry

100 7.8 11 3

Bhojpuri 75 5.2 No 1.7

Mollywood 90 6.4 Yes 7


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Impact of Bollywood on otherindustries


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Music industry

Almost 70% of the Indian music industrydepends on Bollywood.

Bollywood is responsible for pooling in almost75% of revenue earned annually.

The potential of the Indian music industry can

be better understood from its size estimatedat around US$ 182.9 million in 2010, up fromUS$ 160.9 million in 2008, portraying a growth

of 14 per cent during the reporting period. It isexpected to grow at a CAGR of 16 % over2010-14 to reach US$ 379.1 million.

Some of the leading music companies are T-

Series, HMV, Sa Re Ga Ma.


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Media and advertisement

The Indian Media and advertisement (M&A)

industry stood at US$ 12.9 billion in 2009registering a 1.4 per cent growth over lastyear.

According to a joint report by KPMG and anindustry chamber. Over the next five years,the industry is projected to grow at acompound annual growth rate (CAGR) of 13% to reach the size of US$ 24.04 billion by

2014.The report stated. Additionally, the M&Asegment is expected to be the fastestgrowing sector. The sector showed a 22%growth in 2009 and is expected to grow ata CAGR of 32 % to reach US$ 705.2 millionby 2014.


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Other Industries

Apparels industry

Disc producing

Prop industry

Tourism industry

Recreational industry

Television industry


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Less regulations in Foreign DirectInvestment.

Increased demand for the Bollywoodmovies in India as well as in abroad.

Awesome turnovers from the recentmovies.

Withdrawal of recession.

R e a so n fo r th e h ig h ra te o f

in v e stm e n t in to th e in d u stry

Eff t f i th


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Effect of recession on theindustry

The total revenue that Bollywood earnedin 2008 was R10,900 crore with anoverseas collection ofr977 crore.

The overseas box office also saw a major

drop of 30 % with a cut down in the filmgoing audience.

KPMG has estimated that the domesticbox office revenue in 2009 will bearound R7,880 crore as compared to m8.020 crore in 2008, thus bearing a lossof about a 100 crore


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Consumer preferences

Multiplex 36% of public like to see movies inmultiplexes, considering it to be a treat ofsophistication, as the services availed hereare higher and price is almost 5 times to thatof in theaters.

Theater 64% of public who prefer to seecopyrighted movies in theaters since the priceof tickets are comparatively less compared tomultiplexes.

Home viewing- DTH services & DVD, CDscopyright

Internet , Pirated CDs- 23% of the revenue of

Bollywood was being consumed by piracy in2008 and 26% in 2009.


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Government s benefits from

Bollywood


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Entertainment tax

One of the highest revenue earning sectorsfrom tax in entertainment industry iscinema.

The entertainment tax department collectsthe tax from the sponsors and deposit it tothe Government of India.

Entertainment tax in all states of India is

15%-20%, except Maharashtra and UP,where it is 25%-30%.

The government receives 37% of the totalentertainment tax from Bollywood.

Corporate tax from the


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Corporate tax from theproduction houses

Indian government receives a corporate tax

of 30% from the industry.

If the taxable income is more than 1 million,a surcharge of 10% of income tax is leviedon the company.

Contribution to GDP


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Contribution to GDP

The present GDP rate is 7.60% and wants toattain 9% by 2010.

The Bollywood industry added to 19% of the

total GDP of the country in 2009 and isexpected to contribute 22% of the GDP in2010.


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Other benefits

Public awareness

Development of tourism industry

Improvement of infrastructure


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Expectations this Diwali

More than n230 crore of the annual

investment of 2010 is at stake this Diwaliseason with upcoming movies like

Golmaal-3, Guzarish, Action Replay.


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CONCLUSION


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Reference

http://www.sebi.gov.in/dp/ashtadraft.pdfhttp://www.moneycontrol.com/financials/shreeashtahttp://www.bollywoodhungama.com/features/2008/http://filmistan.mywebdunia.com/2009/02/07/no_rehttp://business.mapsofindia.com/india-tax/corporathttp://www.economywatch.com/foreign-direct-inveshttp://www.zorsebol.com/movies/bollywood-movies/http://www.whereincity.com/movies/http://indiabudget.nic.in/ub2010-11/eb/sbe59.pdf
http://www.sebi.gov.in/dp/ashtadraft.pdfhttp://www.moneycontrol.com/financials/shreeashtavinayakcinevision/balance-sheet/SAC03http://www.bollywoodhungama.com/features/2008/11/14/4503/index.htmlhttp://filmistan.mywebdunia.com/2009/02/07/no_recession_in_bollywood.htmlhttp://business.mapsofindia.com/india-tax/corporate-rate.htmlhttp://www.economywatch.com/foreign-direct-investment/http://www.zorsebol.com/movies/bollywood-movies/bollywood-movies-of-2010-explore-whats-in-store/http://www.whereincity.com/movies/http://indiabudget.nic.in/ub2010-11/eb/sbe59.pdfhttp://indiabudget.nic.in/ub2010-11/eb/sbe59.pdfhttp://www.whereincity.com/movies/http://www.zorsebol.com/movies/bollywood-movies/bollywood-movies-of-2010-explore-whats-in-store/http://www.economywatch.com/foreign-direct-investment/http://business.mapsofindia.com/india-tax/corporate-rate.htmlhttp://filmistan.mywebdunia.com/2009/02/07/no_recession_in_bollywood.htmlhttp://www.bollywoodhungama.com/features/2008/11/14/4503/index.htmlhttp://www.moneycontrol.com/financials/shreeashtavinayakcinevision/balance-sheet/SAC03http://www.sebi.gov.in/dp/ashtadraft.pdf


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QUERIES


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44822124 Bollywood Economy

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