PROJECT REPORT

ON

ROLE OF FILM AND TV INDUSTRY IN OUR ECONOMY

Submitted to: - Submitted By:-Dr. Tapan Kumar Nayak Gaurav Rastogi (076)Associate Chairperson Gaurav Sharma (077)PGDM (General) Harshit Suri (078)

IMS C-238, Lal quan Hemant Trivedi(079)

GT road, Ghaziabad- 201009 Hina Gupta (080)

Section – B, PGDM IIIrd

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DECLARATION

We hereby declare that the Project entitled “Role of Film and TV Industry

in our Economy” submitted to Dr. Tapan Kumar Naik (Faculty Member)

Business and Economic Policies, IMS Ghaziabad in partial fulfillment for

the award of the degree of PGDM and the project has not previously

formed the basis for the award of any other degree, diploma, associate

ship, fellowship or other title.

Gaurav Rastogi Gaurav Sharma Harshit Suri

(BM-011076) (BM-011077) (BM-011078)

Hemant Trivedi Hina Gupta (BM-011079) (BM-011080)

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ACKNOWLEDGEMENT

With our sincere regards, we wish to acknowledge our indebtness and

gratitude to the contributions of people who helped us at every stage of the

project.

We are very much like to express our gratitude and profoundest

thanks to our project guide Dr. Tapan Kumar Nayak (Associate

Chairperson PGDM IMS, Ghaziabad) for their sustained guidance,

invaluable suggestions and constant encouragement without which it would

not have been possible for us to complete this project.

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TABLE OF CONTENT

1. Introduction (a) Film industry in India(b) Regional Films in India(c) Brief history of Film industry in India(d) TV Industry in India

2. Objective of the study3. Literature review 4. Role or Importance of Film industry in India5. Prospects of Indian film Industry6. Major problem of Indian film industry

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INTRODUCTION

The film and industry consists of the technological and commercial

institutions of filmmaking: i.e. film production companies, film

studios, cinematography, film production, screenwriting, pre-

production, post production, film festivals, distribution; and actors, film

directors and other film crew personnel.

Though the expense involved in making movies almost immediately led film

production to concentrate under the auspices of standing production

companies, advances in affordable film making equipment, and expansion

of opportunities to acquire investment capital from outside the film industry

itself, have allowed independent film production to evolve.

Film Industry in India

India is the largest producer of films in the world.

 In 2009, India produced a total of 2961 films on celluloid that include

a staggering figure of 1288 feature films. 

Films are made in different 20 languages.

With 3.3 billion tickets sold annually, India also has the highest

number of theater admissions

Indian film industry is multi-lingual and the largest in the world in

terms of ticket sales and number of films produced.

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The industry is supported mainly by a vast film-going Indian public,

and Indian films have been gaining increasing popularity in the rest

of the world—notably in countries with large numbers of expatriate

Indians.

Largest film industry in India is the Hindi film industry mostly

concentrated in Mumbai (Bombay), and is commonly referred to as

"Bollywood", an amalgamation of Bombay and Hollywood.

The other largest film industries are Tamil cinema and Telugu

cinema which are located in Chennai and Hyderabad and are

commonly referred to as "Kollywood" and "Tollywood".

The remaining majority portion is spread across northern, western,

and southern India

(with Punjabi, Bengali, Marathi, Oriya, Malayalam, and Kannada).

However, there are several smaller centers of Indian film industries

in regional languages centered in the states those languages are

spoken. Indian films are made filled with musicals, action, romance,

comedy, and an increasing number of special effects.

Regional Flims in India

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Mainstream Cinema in India is dominated by Hindi language film which

typically makes up a significant portion of total box office collections.

However, over the past few years, regional films have been growing

popularity with releases in a great number of theaters both within and

outside the Indian Territory.

Within regional languages, south Indian segment is an important market in

terms of number of film releases with the four southern states comprising

Andhra Pradesh, Tamil Nadu, Karnataka and Kerala together accounting

for a majority of the total number of film releases in India. Other regional

language markets in India include films made in Bengali, Bhojpuri, Marathi,

Punjabi etc. The total domestic box-office collections from regional

language films in India are estimated to be about Rs. 1,508 crores.

Brief History of Film Industry in India7

1896: First moving picture showed in India

1913: - first Indian-made feature film (3700 feet long) released

1931: India's first talkie, Alam Ara released dubbed into Hindi and

Urdu

1930s and 1940s:i) Talkies addressing social differences of caste, class and the

relations between the sexes were released

ii) Radical cultural organizations led to the formation of All India Progressive Writers Association and the Indian People's Theatre Association (IPTA)

1950: Calcutta becomes the vanguard of the art cinema

1951: industry became the object of considerable moral scrutiny and

criticism, and was subject to severe taxation

1960s:

i) popular cinema had shifted its social concerns towards more

romantic genres

ii) The period is also notable for a more assertive Indian

nationalism.

1970s: By the beginning of the year there existed above150 film

societies all over India.

1980s: the films took a stronger stance on the social issues with an

outpouring of the social conscience, and flowing of new images.

1990s: In the 1990s, video, national and satellite/cable television have

resulted in the development of a prolonged crisis in India’s movie

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industry, where commercial and art films are equally at risk of failing

at the box office.

TV Industry in India

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Television is one of the major mass media of India.

India is the second-largest pay-TV market in the world, with 108

million subscribers and a reach of 48% of Indian households

It is a huge industry which has thousands of programmes across

Indian states ranging from national language to regional ones.

The small screen has produced numerous celebrities of their own

kind some even attaining national fame.

Approximately half of all Indian households own a television. 

As of 2010, the country has a collection of free and subscription

services over a variety of distribution media, through which there are

over 515 channels and 150 are pay channels.

 According to Pioneer Invest corp, the Indian cable industry is

worth    270 billion (US$ 5.94 billion) and is the third largest in the

world after China and the US.

The number of TV homes in India grew from 120 million in 2007 to

148 million in 2011.

Cable reaches 94 million homes with 88 million analog connections

and 6 million digital ones, while DTH has commanded 41 million

subscribers.

Objective of the StudyThe main objectives of the study will be:

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1. To know importance of Film and TV Industry with respect to Indian

Economy.

2. To evaluate performance of Film and TV Industry.

3. To figure out the problems and issues related with Film and TV

Industry.

4. How this industry is helping other Sectors of the Economy?

Role or Importance of Film and TV Industry in our Economy

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Film and TV industry is one of the important contributors to the economy

and plays a very important and critical role in economic development due to

the following reasons:

Contribution of Film and TV industry to the GDP was 0.532% The combined revenues of film and TV industry was around Rs.

50,000 crore (USD 10.00 billion) in the calendar year 2011. It is

expected that it will be around Rs. 54,000 crore (USD 11.00 billion)

in the calendar year 2012.

The film and television industry in India is one of the world's largest

markets in terms of number of consumers and offers significant

growth potential. Over the past few years the industry has

experienced rapid double-digit growth and it is expected that this

trend will continue in future, resulting in increasing contribution to the

Indian economy.

The sector has a total output more than $20 billion (Rs 1,00,000

crore), contributing more to the Gross Domestic Product (GDP) of

India than the advertising industry.

Film and TV industry creates more than 2 million jobs (directly or

indirectly) in the economy.

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Prospects of Indian Film Industry

Growth is expected to come from the expansion of multiplexes

in smaller cities, investments by foreign studios in domestic and

Regional productions, the growing popularity of niche movies and

the emergence of digital and ancillary revenue streams.

Rise of multiplexes: Multiplexes continue to gain prominences

across major Indian cities and companies have lined up

investments to accelerate multiplex penetration in smaller towns.

The number of multiplex screens is expected to double in the next

five years, from 900 to 1,775 screens.

Digitization is providing scale and reducing piracy: Digital

prints cost 80% less than conventional film prints, allowing

producers to reach five times the number of screens at the same

cost. This has significantly improved realization, as 60% of box-

office collections are now earned within the first week of a movie’s

release. Digital cinema allows companies to control exactly where

movies are showing and how many times they are shown. It also

expands the reach of releases, from large cities to remote towns

and villages across India.

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Emergence of new sources of revenue: In the last few years, the

window available to monetize a film’s revenues at the box office has

shortened considerably. This is driving film studios to exploit ancillary

streams of revenue such as pay-per-view, mobile, online gaming, and

licensing and merchandising. The revenue from these ancillary

streams and cable and satellite (C&S) rights are projected to grow at

a CAGR of 16% from 2009 to 2014.79 The pre-sale of satellite and

home video rights has also gained momentum.

Regional-language cinema forms an integral part of India’s film industry: 60% of all movies produced in India are in the four South

Indian languages of Telugu, Tamil, Kannada and Malayalam.80 This

market is witnessing rising investments from Indian and foreign

studios, with a gradual shift in favor of regional films as compared to

Hindi films. Studios are also releasing dubbed versions of popular

Hollywood films, while multiplexes are increasing their Screenings of

regional movies.

Outsourcing of film services: Services such as postproduction,

animation, visual effects, and 2D to 3D conversion are being

increasingly outsourced to India, driven by the availability of a skilled

workforce and the low cost of services.

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Small-budget films go mainstream: Small-budget niche films with

high-quality scripts have recently gained acceptability among

mainstream audiences. Strong content and word-of-mouth marketing

have helped studios to generate high returns from these films,

thereby diversifying their risk from big-budget movies.

Globalization of the Indian film industry: Indian producers are

improving the international marketability of large budget Indian

movies by building partnerships with international screenwriters,

composers and technicians. International fi lm studios are also

producing and distributing Hindi and regional movies. Of the top six

international movie studios, four are involved in distributing or

producing Indian movies. A number of Indian film studios and M&E

companies are also expanding their international footprint by

acquiring international theater chains and production studios.

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Prospects of Indian Television Industry

Increased fragmentation in viewership: Viewership, especially in

the Hindi general entertainment genre, is increasingly getting

fragmented as a result of a large number of such channels being

broadcast in India. However, a few players continue to dominate the

market, commanding a significant share of the industry segment

revenues.

Increased competition amongst broadcasters: With new channels

being introduced at regular intervals, there is increased competition

amongst broadcasters, for viewership and advertising revenue. This

coupled with high content and marketing costs is expected to impact

the profitability of broadcasters in the medium and long term.

Increasing penetration of DTH (Direct-to-Home): There has been

rapid growth of DTH subscribers in the last few years. This trend is

expected to continue over the next few years. However, operating

profits are still negative for the industry, due to high customer

acquisition costs, and is expected to remain this way untill a critical

mass of subscribers is reached. Major DTH service provider in India

are : Dish TV, Airtel Digital, Reliance Digital, Videocon, Sun TV, Tata Sky.

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Major Problem of Indian Film Industry Piracy is the Major or main problem of Indian Film Industry.

India is becoming as one of the biggest hub of film piracy.

India is ranked fourth in the world when it comes to Illegal

downloads, behind US, UK and Canada.

Indian film industry is losing nearly $1000 million (Rs 5000 Crore) in

revenue on a yearly basis

Indian film industry is losing nearly 6,00,000 jobs due to piracy

Piracy of cinematographic works takes two principal forms, namely

`video piracy' and `cable piracy’.

Video piracy takes place when a film is produced in the form of video

cassette without taking proper authorization from the right holder i.e.

producer.

Many times producers of films sell video rights to another party

(generally after six weeks or more of release in theatres) who makes

video cassettes for selling or lending.

The video cassettes kept for sale are meant for home viewing only.

Any commercial use of such cassettes like in video parlours or in

cable networks amounts to copyright violation.

Cable piracy is unauthorized transmission of films through cable

network. As mentioned above, showing a film in a cable network

requires acquisition of proper authorization from the right holder.

But many a time, films , especially the new releases, are shown

through cables without such authorization, which tantamount to

piracy.

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ANALYSIS

Contribution of Film Industry to the Economy

Direct Contribution to the Economy:

Gross Output Gross Value Added (GVA)

Net Indirect Tax

Employment

Rs. Crores

USD Million

Rs. Crores

USD Million

Rs. Crores

USD Million

Lakh

Indian Film

Industry

12,312 2,709 2,132 469 800 176 1.4

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Total Contribution to the Economy:

Gross Output Contribution (GVA+NIT)

Employment

Rs. Crores

USD Million

Rs. Crores

USD Million

Lakhs

Direct Impact

12,312 2,709 2,932 645 1.4

Indirect Impact

8,154 1,794 3,914 861 2.8

Total Impact

20,467 4,503 6,846 1,506 4.2

GVA= Gross Value added, NIT= Net Indirect Tax

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Contribution of Television Industry to the Economy

Direct Contribution to the Economy

Gross output EBITDA Wages Gross Value added(GVA) = EBITDA+Wage

s

Rs. Crore

USD millio

n

Rs. Cror

e

USD millio

n

Rs. Cror

e

USD millio

n

Rs. Crore

USD million

TV Production

1,500 330 120 26 60 13 180 40

TV Broadcastin

g

15,283

3,363 3,057 673 1,375 303 4,432 975

TV Distribution

26,763

5,668 (149) -33 2,033 447 1,885 415

Total 42,545

9,361 3,028 666 3,469 763 6,497 1,429

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Total Contribution to the Economy

Gross Output Contribution (GVA+NIT)

Employment

Rs. Crore USD million

Rs. Crore USD million

Lakh

Direct Impact

42,545 9,361 7,348 1,617 4.24

Indirect Impact

28,178 6,200 13,525 2,976 9.62

Total Impact

70,723 15,561 20,873 4,592 13.86

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Revenues of Film and TV Industry (Rs in Crore)

Year Film Industry TV Industry Total

2008 24,470 10,700 35,170

2009 26,750 11,800 38,550

2010 29,800 13,200 43,000

2011 33,200 14,700 47,900

2012* 37,200 15,900 53,100

2013* 42,000 18,500 60,500

* =Expected

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2008 2009 2010 2011 2012E 2013E0

10000

20000

30000

40000

50000

60000

70000

Revenues of Film and TV Industry (in Rs. Crores)

TV IndustryFilm Industry

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Revenue Breakdown of Indian Film Industry

75%

2%

6%

8%

9%

Revenue Breakdown

Domestic Box OfficeAd RevenueCable and Satellite rightsHome VideoOverseas box office

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Indian Film Industry

Domestic Box office Collections

2008 2009 2010 2011 2012 20130

2000

4000

6000

8000

10000

12000

14000

81258775

982510890

11550

13233

Domestic Box Office (Rs. Crore) Column1Column2

Domestic box office collections are projected to increase to Rs. 13,000

crores (USD 2.8 billion) by the year 2013, growing at a CAGR of 10%. This

growth is primarily attributable to the growth in average ticket prices,

projected to increase from Rs. 25 (USD 55 cents) in 2008 to Rs. 40 (USD

88 cents) by 2013.

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Indian Television Industry Revenue

2008 2009 2010 2011 2012E 2013E0

5000

10000

15000

20000

25000

30000

35000

40000

45000

24470 2675029800

3320037200

42000

Overall Television Revenue (in Rs Crore)

As per estimates, it is expected that revenue will be around 42,000 crore by

2013.

FINDINGS26

Lakhs of people are getting employment from both the Industries

(directly or indirectly)

Digitalization has helped a lot the industry in getting revenue from

new sources.

Piracy is a major or main problem of the film industry.

People are losing lakhs of jobs due the piracy of movies.

Penetration of Television in household is increasing day by day.

Local cable operators are dominating the market.

Direct to home service has helped a lot the Television industry.

Foreign entertainment companies such as Fox, Disney etc. are also

interested in Indian film industry. These companies are also investing

crores of rupees in India.

CONCLUSIONS

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On the basis of study, we can conclude that Film and TV

industry is one the major important sector of the economy.

Lakhs of people of different background getting employment in

different fields of the Industry.

Digitalization has helped a lot the Industry.

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APPENDIX

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GLOSSARY Gross Output: This represents the total value of goods and supplied

by the entities in the industry. This is measured by the aggregate

revenues of all companies in the industry.

Note: Gross Output as a measure, is different from the total

consumer spend in the industry, and may vary based on the industry

structure. However, the measures of "Gross Value Added", "Net

Indirect Taxes" and "Employment" would remain the same,

irrespective of industry structure. This has been further explained in

the methodology section of this report.

Gross Value Added ("GVA"): This factor measures the returns to

labour and capital, i.e. the value of output generated by the entity's

factors of production. This measure, along with the Net Indirect Taxes

indicates the industry's contribution to the economy.

Net Indirect Taxes ("NIT"): Indirect taxes (net of subsidies) paid by

the industry.

Employment: This measures the number of workers that are

employed in the industry.

BIBLIOGRAPHY

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1. "Economic Contribution of Indian film and Television industry",

prepared by PricewaterhouseCoopers, March 2010.

2. "Spotlight on India's Entertainment economy", prepared by Ernst &

Young, October 2011.

3. http://www.indiaglitz.com/channels/hindi/article/55508.html

4.http://ibnlive.in.com/news/media-sector-added-6-bn-to-indian-economy/

111750-7.html

5. http://www.financialexpress.com/news/piracy-a-serious-threat-to-indian-

film-industry/592752/

6. http://copyright.gov.in/Documents/STUDY%20ON%20COPYRIGHT

%20PIRACY%20IN%20INDIA.pdf

7. http://en.wikipedia.org/wiki/Film_industry

8. http://en.wikipedia.org/wiki/Television_in_India

9. http://www.wipo.int/ip-development/en/creative_industry/pdf/ecostudy-

canada.pdf

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