I.

Introduction

“Film is not only a piece of art but also a tool of social reform as it
expresses the feelings of humans and their idea of contemporary society.
Films are the mirror that reflects the society. Also they reflect the changing
scenario of politics and economy in India over the decades. Talk of the rise
of middle class or the emergence of small town India or the gradual
breakdown of the old feudal order or of despair, anger, alienation and
separation or of resurrection, a new resurgence and a new confidence. You
will see them in the screen of Bollywood and other regional industries”.

In fiscal year 2019, the total revenue earned by India's film

industry amounted to over 183 billion Indian rupees. Out of this, the
highest earnings came from domestic theatrical revenue, worth almost 125
billion rupees.
The importance of the cinema in India today is both economic and cultural.
Cinema is the main form of entertainment for India’s 1.9 billion people, with
an estimated 15 million people attending the cinema each day (Morcom,
2008). Indian films also have a growing international audience. The
advertising of Indian films provides a rich window into many facets of Indian
society and reflects key features of the Indian film industry. The distributors
play an important role in funding Indian films as well as in their advertising
and marketing. Distributors are mainly interested in mass-market popular
films, as they are motivated by covering their costs and earning their
commission, understandable when only a small percentage of films make a
profit.

There is a parallel film tradition in India, the ‘art film’, which is more realistic
and seeks to reflect the reality of Indian life. These films account for only 10
per cent of films made. This chapter will focus on films made for the mass
market as they dominate cinema advertising. As in most countries the stars
have become the most important marketing tool of the Indian cinema,
though there are particular characteristics of Indian films that have a major
influence on film advertising, notably the numerous song-and dance
sequences. Indian films have complex plot lines, non-linear narratives,
romance is a central proposition and realism is less important than fast
action, entertainment and escape from everyday life. The importance of
music to films has meant that radio airplay of hit songs and the promotion
of the soundtrack are central to film marketing. Many satellite channels are
very ‘dependent on Hindi films, film music, industry news, celebrity gossip,
film awards shows and stage shows featuring film stars’. Other types of
advertising include billboards, posters, magazines and the internet. Print
and billboard advertising focus on stars, genre, gender (strong men and
seductive women), action and the core emotional dilemmas defining the
plot. India is the world's largest producer of films by volume - producing
almost a thousand films annually. However, revenue-wise, it accounts for
only 1 percent of global film industry revenues.
The Indian film industry is the largest in the world in terms of number of
films produced with around 1,500 to 2,000 films produced every year in
more than 20 languages. The industry also had the second highest footfalls
in the world in 2015 (over 2.1 billion) following China (almost 2.2 billion).
Despite the large number of films and theatre admissions, the industry
continues to remain small with respect to other global industries in terms of
revenue. In India, the film industries gross realization stands at $2.1 billion
versus gross realization of $11 billion in the US and Canada which
produces significantly lower number of films (approximately 700 films).1
This is mainly due to low ticket realizations and occupancy levels, lack of
quality content, and rampant piracy. Historically, the film industry in India
has grown at a CAGR of over 10%. Currently, the film industry grosses
total revenue of INR 138 billion ($2.1 billion). Going forward, the industry is
expected to grow at 11.5% year-onyear reaching total gross realization of
INR 238 billion ($3.7 billion) by 2020. The key growth drivers are expansion
of multiplexes in smaller cities, investments by foreign studios in domestic
and regional productions, growing popularity of niche movies, and the
emergence of digital and ancillary revenue streams. The domestic box
office contributes to the majority of the revenue, representing 74% of the
total industry. Cable and satellite rights and online/ digital aggregation
revenues are the fastest growing segments, and are expected to grow at a
CAGR of about 15% over the period FY15 – FY20, driven by rising demand
for movies on TV and increasing smartphone penetration across the
country respectively. On the other hand, home videos have been shrinking
due to increasing piracy and growing popularity of digital platforms. Home
video has lost share to Video on Demand (VOD) through Direct-to-home
(DTH) operators and Over-the-top (OTT) platforms. The Indian film industry
is dominated by Bollywood, the Hindi film industry, contributing 43% of the
revenue while regional and international films contribute the remaining 50%
and 7% respectively. Within the regional film industry, Tamil and Telugu are
the largest segments comprising approximately 36% of net box office
revenues followed by Bengali, Kannada, and Malayalam films. Currently,
international films is a small, but growing segment, driven by rising
numbers of English and other foreign language speakers, as well as rising
numbers of international movies witnessing dubbed releases across the
country.

Film promotion has been now considered as important as actual making of

the film. Although the history of the film marketing can be traced back from
the days of the inception of the film itself, it has reshaped its periphery time
and often. It has gone through the age of posters, wall papers, print ads
etc. New Media is the latest addition to this arena. Film has also started
utilising the potential of new media completely in terms of marketing and
promotions. Indian Hindi film industry is too not far behind. It has also used
new media as well as social media forum to make people aware of the film
and to drive them towards theatre. This paper shows how Indian Hindi
movie industry has undergone various changes in terms of promotion and
finally it harps on how contemporary movies use social media platform to
promote their work successfully. It has undergone a detailed analysis of
social media promotional strategy of current hits and simultaneously comes
in to conclusion that despite various restrictions and limitations, social
media can able to revitalise the entire process of film promotions and
marketing and can have effective result on audience on making them
engaged about a particular film.

The Reason behind this is to find out marketing strategies of Hindi film
industry and their role in success of a film on box office. Now a day‟s Hindi
film industry presents a very different scenario. With over 1000 films
releasing in a given year, all of them fighting for a common goal i.e. the
good revenue, the multiplex domination - it has become a necessity for
those involved, to do whatever it takes to enforce that "must-watch" feeling
among the masses in order to win this very competitive rat-race. . In a
country where more than three-fourths of the Rs 13,000crore film industry's
revenues come from the box office and where single screens have been
shutting down at an alarming rate, this delay in opening new properties is
creating room for crafting good marketing strategies to effectively use
available screens. While multiplexes have been doing a good job, adding
150-200 screens every year, single screens have been shutting at twice
that rate. From over 12,000 screens five years ago, there are now just
about 10,000 left in India. The result: in 2015, growth in box office revenues
screeched to a halt. While the numbers are yet to come in, 2016 is not
expected to have done much better. This is simply because there are not
enough screens around and lack of good marketing strategies. Average
occupancy at multiplexes remains 30 per cent. For more than five years
now the number of Indians watching films has fallen consistently - from 82
million in 2010 to just about 78 million in 2014. These facts create the
room to study Marketing strategies of Hindi Film Industry. I want to study
how effective role does the marketing strategies play in success of a film
and their relevance with marketing mix. This research entirely focuses on
the myriad of promotional and marketing strategies have been followed by
Hindi Film Industry in recent years and their significant impact on their
success. There are many ways to define success of a film: whether the film
was profitable (i.e. made a greater than say, return on investment), awards
(Oscars, IIFAA, Filmfare, Dadasaheb Phalke Award, National Film
Awards), critics reviews and to what extent film influenced the audience.

Components of the Indian film industry

The Indian film industry comprises of a cluster of regional film industries,

like Hindi, Telugu, Tamil, Kannada, Malayalam, Bengali, etc. This makes it
one of the most complex and fragmented national film industries in the
world. These regional language films compete with each other in certain
market segments and enjoy a virtual monopoly in certain others. The most
popular among them is the Hindi film industry located in Mumbai, popularly
referred to as “Bollywood".
Bollywood

Out of the 200 Hindi films made in India each year, around 150 are made in
Bollywood. These Bollywood films are released throughout India on both
big and small screen formats, with several of them being screened
overseas as well. Though there have been sporadic instances of regional
films, enjoying a national release or even an overseas release, virtually all
films having a national audience, are made in Bollywood. It accounts for
over 40 percent of the total revenues of the overall Indian film industry,
which is currently estimated at INR 59 billion. It is estimated that only INR
50 billion finds its way to the industry coffers, with the balance INR 9 billion
being cornered by pirates.

Regional Films

The major regional film industries are Tamil and Telugu, which together
earn around INR 15 billion, followed by Malayalam, Bengali and Punjabi.
With increased viewer exposure to a plethora of entertainment options on
satellite television, the number of regional films produced annually has
fallen from around 800, three years ago, to around 650 currently.

English Films

Big budget Hollywood films are beginning to make a mark, with their
dubbed versions making inroads into the semi-urban and rural markets. On
a cumulative basis, box office collections of foreign films grew in both
revenues and number of releases, from INR 1 .5 billion from 60 films in
2003 to INR 1 .8 billion for 72 films in 2004.

With around 12,900 active screens (down from 13,000 in 1990), out of
which over 95 percent are standalone, single screens, India's screen
density is very low. In contrast, China, which produces far less films than
India, has 65,000 screens, while US has 36,000 .
Audiences
The broadest differentiations in movie audiences are between the ‘cities
and interiors’ and the ‘classes and the masses’. Though Indian society is
urbanizing rapidly – and it was estimated that by 2010 the number of cities
with populations over 1 million would rise to 43 – India is still a
predominantly rural country. As city dwellers tend to have higher average
standards of living, marketers pay them a lot of attention, but in 2010 only
30 per cent of the population was urban. The rural population lives in
627,000 villages, and over 300 towns that have populations over 100,000.
The largest film audiences come from poor lower caste and lower class
urban males. This group numbers around 165 million. They have low
levels of disposable income and, as men have much higher status than
women, women are more likely to be confined to the home than men,
though they still attend the cinema, in lesser numbers. As the reach of
media is much narrower in rural areas than in urban centres, the rural
counterparts of the urban poor are a less accessible but much larger group.
According to the National Social and Rural Research television reached
108 million households in 2005 only, and that number was a 32 per cent
increase over 2004. The chairman of Hindustan Lever Limited claimed that
media only reached 50 per cent of the population. Both urban and rural
poor have low levels of disposable income and film choices are made
carefully. The proliferation of titles means there is plenty of choice, which
accounts for the high numbers of films that fail at the box office. Apart from
the enormous lower class audience, the middle class audience for Indian
cinema is approximately 55 million according to Beinhocker et al. (2007).
The middle classes and the elite are the main audiences for the ‘art films’,
though this group also enjoy mainstream movies. The different class
composition of audiences is reflected in seating allocations in cinema halls.
The major division is between stalls and balcony which can be further
subdivided into lower stalls, upper stalls, dress circle and balcony. The
masses sit in the stalls while the middle classes sit in the balcony,
particularly the women and children. The cheapest seats are at the front
and those sitting there are called ‘front benchers’ (2004: 64–65). In recent
years the introduction of multiplexes – smaller movie theatres that seat
200–300 people – provide popular venues for the upper middle class
audiences, who were less likely to attend the large cinema halls. Assigned
seating and differential rates of admission based on seat allocation
segregates classes and genders in cinema halls. Ticket booths for cinemas
often have separate booths for women who do not want to be in close
proximity to men they do not know. India has a relatively low per capita
ratio of cinemas; 12,000 cinema halls in 1996 and already declining during
the 1990s. Venues for showing movies vary in both quality and capacity. In
the larger cities like Mumbai cinema halls seat between 600–2,500 people,
with up to four shows a day (nearly 12 hours of films). Though television
has been popular and widespread since the early 1990s, cinema remains
very popular. In more remote areas without physical venues demand is met
by touring cinemas, which involve a projectionist traveling in a truck with an
assistant, 18 reels of film and a tent which will be set up in a village In the
countryside films are even shown on bare walls outdoors. The quality of
projectors and image is often poor. Because of these poor viewing
conditions Indian films tend to be saturated with colour.

II. Research objective and probation

Film making has a long tradition in India but was only granted industry
status in 1998, which then enabled producers to get bank finance, loans
and insurance. As few films are financially successful, finance continues to
be an ongoing problem. Estimates of the numbers of movies produced in
India are variable but for some decades but there have been more movies
produced in India than in Hollywood. According to a KPMG industry audit
1,200 films were produced in Advertising and marketing of the Indian
cinema 3 2002 (GV Films Share Offer, 2005), while Kabir estimated that
800 movies were produced a year (2003) and a little later Agrawal and
Thadamalla claimed there were about 850 movies produced annually,
spread across a number of language groups: 250 in Hindi; 150 in Tamil and
Telugu languages, with the rest in other regional languages (2006). The
audiences for these language groups are much larger than most of the
nations of the European Union. It is important to note that one of the major
foreign misconceptions is the equation of Indian cinema with films made in
Mumbai (Bombay) or Bollywood. In fact only 150–200 films a year were
made there in the early 2000s (Ganti, 2004: 3). At the end of the decade in
2010, over 1,000 films were produced in India, according to Kishore Lulla,
CEO of Eros Cinema UK (BBC World News, May 2011).

INDIAN FILM INDUSTRY The Indian film and entertainment industry,

position at more than $8 billion, is one of the greatest increasing sectors of
the Indian economy. Indian film industry forms the most key segment of
entertainment sector. Indian film industry helps a lot in enlargement of
entertainment industry & the growth of country, at large. India has one of
the oldest and largest film industries in the world. It was in early 1913 that
an Indian film received a public screening. The film was Raja Harischandra.
Its director, Dadasaheb Phalke is now remembered through a life-time
achievement award bestowed by the film industry in his name. Every year,
1000 films are released in India, which are watched by 3 billion movie
goers. India is the world's largest film producer, volume-wise. However,
factors such as poorly developed revenue stream, excessive reliance on
domestic box office collections and inefficiencies prevalent across the value
chain, have resulted in poor revenue collection for the industry. As a result,
the Indian Film Industry accounts for only 1% of global film industry
revenues. However, in the past 3-4 years, the industry has undergone
major alterations bringing positive results. Due to the availability of
organized funding, advent of multiplexes and increasing overseas
collections, the film industry now stands at a better position. The provision
of 100% foreign direct investment has made the Indian film market
attractive for foreign enterprises such as 20th Century Fox, Sony Pictures,
and Warner Bros. Over the past years the business of film making has
changed due to corporatization, increasing production costs, spiraling actor
fees and high acquisition costs for content. With the recent economic
showdown, the film industry is witnessing earlier some of the earlier
excesses being brought down to a more realistic level playing field. We
have seen over the years that success of film now not only through its
contents but varied integration of marketing strategies to promote the film.
Today everyone in the film industry wants success but it is acquired by only
those who have come out with some out of box strategy for their film. Films
are much hyped before their release in the market so that they have great
openings but some earn good money and some are not even noticed due
to lack of content and poor marketing.

The economics of the film industry: role of distributors and finance

Though films made in India are far cheaper than those made elsewhere,
especially Hollywood, finance is always tight and financial insecurity is one
of most significant influences on the industry. Almost anyone with money
can make a film, but movie production is costly and those lacking
substantial finances are dependent on and influenced by their sources of
money. Massmarket movies are expensive to make because of the salaries
of stars, exotic locations and the use of more costly production techniques.
There has been more pressure to film in exotic locations since the
introduction of satellite and cable television in the 1990s. The funding of
films in India has always been financially risky because only a small
proportion of films are profitable. Ganti estimated that only 15 to 20 per
cent of films were financially successful (2004: 62). According to Kabir, in
the early 2000s only eight out of 800 movies produced each year made
‘serious money’ (2003: 6–7). Since the 1940s, as the studio system
declined and the ‘black market’ expanded, much of the finance for the
Indian movie industry has come from the ‘black economy’ and the criminal
underworld (Agrawal and Thadamalla, 2006: 96). In 2000, two years after
the sector gained industry status, a change in banking practices was
introduced which enabled films to get bank loans (Business Line, 2000,
cited in Kavoori and Punathambekar, 2008: 4), but the high level of risk
continues to make the financing of films problematic. In the mid-2000s the
average cost of producing a movie was estimated at 1 Rs.40 million ($.98
million – see Appendix 2 for exchange rates) for budget movies to Rs.650
million ($14.2 million).
Production Advertising and marketing of the Indian cinema 7 Production in
the film industry has been dominated by kinship networks, many of them
associated with the ‘stars’. A system of cinema ‘dynasties’ has evolved,
which is similar to those in the business and political sector. The process of
selection and development of film scripts is also distinctive in India.
Directors don’t work with a formalised script (Ganti, 2004; 68); scripts are
developed using an ‘oral working style’. Unlike the Hollywood system, the
Indian cinema has no established system of agents for either stars or
scriptwriters. Movie ideas are first marketed to financiers, distributors and
the press by a mahurat, a carefully planned marketing event where even
the specific date and time chosen will be designated by an astrological
calendar as being auspicious for starting a new venture (Ganti, 2004: 70).
The script is not finished before shooting begins; there is merely a concept
sequence, and plots tend to be chosen on what has been successful in the
past. The films are shot without sound and dubbed later, which is important
for the soundtrack because the songs are sung by professional singers,
often famous in their own right. The soundtrack is an important marketing
tool.

Overview of the film making business

This overview is required to understand the exact motivation behind the

promotion and publicity of a movie.

In general the movie making business can be summarized as follows:

The scriptwriter or director or a producer comes up with a concept. The

producer tells the scriptwriter to create a script based on this concept. The
producer then officially hires his core team of director, scriptwriter, music
director, lyricist, editor, cinematographer and choreographers. The cast for
the film is decided based on the requirement of the script. This process is
called casting. Location hunting is done for shooting the film. The director
gives an estimated budget and schedule to the producer for the film
shooting. The producer arranges finances from financers based on this
budget. The film is shot. The completed film is processed in studios and the
film is finally ready for release.

At this stage the publicity and promotion phase of the movie begins for the
producer. The main aim of the producer is to sell his movie at a high price
to a distributor. India is a vast country and the market has conventionally
been divided in 9 territories by the distributors. A distributor from each
territory buys the rights to distribute the film to the theatre owners in his
territories. To get a high price from the distributors, the producers publicize
the film in order to pull crowds to the theatres. The distributors buy the
movie at a price suitable for their territory. The distributors estimate how the
film could work in their territory based on the pre-release promotion of the
film and the past record of the people associated with the film (For
example, the banner, the director and actors). If the music of the film has
done well in the market, the producer definitely gets a higher price from the
distributors.

Before the release, the producers share some information of the movie to
the distributors through trade guides. The trade guides give the distributors
an idea about what the theme of the movie is, how the movie is being
promoted, does the theme suit their territory, what theatres in their territory
would be ready to screen this movie etc. The distributors compare different
trade guides and decide which movie they want to buy. The distributors
then release the movie prints to theatres. The distributors and theatre
owners get money through the ticket sales. Producers also get a
percentage share from the ticket sales.

OBJECTIVES OF THE STUDY

 To analyze the perception of Undergraduate students in Delhi on the
advertisement and promotional approaches used for Bollywood movies.

 To identify the factors (promotional approaches) used by Bollywood

movies in order to attract movie viewers.
 To analyze whether promotional strategies of Bollywood movies influence
movie watching intention among the Undergraduate students in and around
the city of Delhi.
 III. Hypothesis
Promotional strategies of Bollywood movies have no significant association
with the movie watching intention among the Undergraduate students in
and around the city of Delhi.

Literature Review A major question when dealing with the importance of

successful marketing campaigns is to address current revenue and
attendance rates. The movie industry has been struggling, much like many
other industries in recent years. Revenue from 2011 was down 2.6 percent
from 2010, from $10.47 billion in 2010 to $10.20 billion in 2011 [Figure 1].
Though this drop is not staggering, when examined in context it is a
worrying trend for the industry and its future. Although profits are staying
relatively stable compared to previous years, attendance rates have fallen.
There were 1.29 billion tickets sold in 2011 [Figure 1]. This may seem like a
high number, but for the film industry it was the fewest number of tickets
sold since 1996, and a reduction of over 18% from the peak in 2002 .

Film promotion is very basic and vital in film industry. As with all business, it
is an important part of any release because of the inherent high financial
risk. Film studios will invest in expensive marketing campaigns to maximize
revenue early in the release cycle. Marketing budgets tend to equal
anywhere between half or three times the production budget. The
distributor and exhibitors generally handle publicity. There are many
techniques for movie marketing some seems to be very traditional while
some transfers with new trends. When a new film is made, it has to be
advertised like any other new product, to let people know it exists and to
encourage them to go to the theaters to see it. The advertising of a film is
known as film marketing. The way in which a film is promoted can have a
huge effect on whether or not it is successful. Films are expensive to make
and if the public do not buy tickets at the box office to see the film, a lot of
money will be lost.

Balasubramanian (1994) referred to it as a hybrid message – a paid

message aimed at influencing movie (or television) audiences via the
planned and unobtrusive entry of a branded product into a movie. Maynard
and Scala (2006) described product placement as a strategic marketing
tactic, the process through which an advertiser pays to place a product in a
movie. They called product placement an alternative route for traditional
overt advertising. Karrh (1998) defined brand placement as a paid inclusion
of branded products or brand identifiers through audio and visual means
within mass media programming, noting that the term product placement is
used interchangeably with brand placement. Product placement refers to a
product placed in a movie, when it is actually a brand that is placed in a
movie. A company is usually interested in featuring its brand and not just
any product. The Coca-Cola Company features Coca-Cola and not just any
soft drink. For the purpose of this review, however, product placement and
brand placement are indistinguishable. In Hollywood, by the late 1960s it
had become quite a routine affair for producers to contact advertisers
regarding placing their products in films. Companies such as Columbia
Pictures maintained a contact list for the tie-up merchandise that included
the products, company names, and addresses (Newell, Salmon, & Chang,
2006). Newell, Salmon, and Chang (2006) provided evidence that the first
product placement actually took place in 1896 in the movie Washing Day in
Switzerland. Numerous advertisers see James Bond films as a perfect
opportunity to showcase their products. Golden Eye (1995) featured the
BMW Z3 Roadster. The placement helped BMW earn $240 million in
advanced car sales (Maynard & Scala, 2006). However, the recently
released Wall-E (2008) has shown that there is more to it. This Disney
Pixar movie is full of product placements, but what catches the attention of
the audience is that Apple has achieved more than just placing a single
product into a movie. According to Rajadhyksha (2004), Hindi film industry
is a reflection of the culture of India and the products and practices
endorsed by Bollywood have a significant impact on the movie goers. With
the growth of urban middle class many multiplexes have also come up. So
the number of captive audiences watching a movie has increased
significantly. Brand managers have to use this information in a significant
manner. The best possible tool available to them is product placements or
more precisely. Balasubramanian (1994) considered the success of
product placement in a movie to be dependent on the relationship between
a filmmaker, a specialized firm and a product sponsor. The filmmaker
controls opportunities for product appearances in his movie while the
sponsor seeks such value creating opportunities and the specialized firm
makes significant changes in the script to fit the product and the brand in
the film. Since Bollywood or Hollywood movies mostly remain unchanged
across countries, international brands even if placed in local media through
cablecast or broadcast, may serve as global marketing strategy (Gould et
al., 2000). McCartey (2004) view that high involvement of the audience in
the movie would positively enhance processing of brands related to the plot
but negatively impact those not linked to the plot. Lord and Gupta (2002)
also supported this view and said that recall will be more in case of
audience with high involvement. Gupta and Lord (1998) even found out that
more recall was elicited for properly placed brands in movies than
traditional advertisements. One of the first studies made on the consumers‟
view of product placement was by Nebenzahl and Secunda (1993). This
study, which was carried out in the US, found that the participants, aged
18-34, were fairly positive toward placements, and preferred such
placements to other types of on-the-screen advertisement because these
were seen as more annoying. Moreover, Nebenzahl and Secunda (1993)
found that those who were against product placement were so for ethical
reasons, an observation that Gupta and Gould (1997) studied in more
detail. Gupta and Gould (1997) applied the ethical aspects to product
groups, and found that controversial products such as alcohol, cigarettes
and guns were considered to be less acceptable to place in movies. Gupta
and Gould (1997) also found that women were more negative toward
placements of such controversial products than men. There are many ways
of using social media websites for promoting movies. Some examples of
this include creating Twitter accounts for the movie, and tweeting updates,
premieres, actor/actress interviews, or give-away tie-ins. A marketing
company might also make a Facebook page for the movie, encouraging
people interested to “Like” their page and share it with their friends.
YouTube can be used as a platform to not only show trailers, but also to
create a channel dedicated to all official promos for the particular movie. By
actively utilizing each channel of social media, a movie that would not
normally garner a nationwide release might earn one. For example,
Paranormal Activity, and a low-budget “found footage” movie like The Blair
Witch Project, went on to become a blockbuster (Carvell, 1999). Though
the trend in marketing through social media is a growing one, as of now it is
difficult to determine the effectiveness of social media marketing. Many
films are now attempting to use both traditional marketing and social media
marketing, which makes it challenging to differentiate between them. This
study looks to find a link between the awareness from movie social media
websites and movie attendance. Today, creating a successful movie
marketing campaign using social networking websites is not achieved by
simply creating Facebook and Twitter accounts and uploading a trailer onto
YouTube. Alone, these measures are not enough to achieve a successful
social media marketing campaign. Social media marketing cannot be the
one-sided flow of information from movie studio to viewer that traditional
marketing has relied on in the past. Companies that are encouraging
viewer participation in the social media campaign are revolutionizing the
way movies are marketed (Elliott, 2011). By investing in a relationship with
Internet users, the movie creates an audience who feels partial ownership
in the movie and is therefore invested in its success.
 Dadasaheb Phalke

Dhundiraj Govind Phalke, popularly known as Dadasaheb Phalke (30

April 1870 – 16 February 1944), was an Indian producer-director-
screenwriter, known as the Father of Indian cinema. His debut film, Raja
Harishchandra, was the first Indian movie in 1913, and is now known as
India's first full-length feature film. He made 95 feature-length films and 27
short films in his career, spanning 19 years, until 1937, including his most
noted works: Mohini Bhasmasur (1913), Satyavan Savitri (1914), Lanka
Dahan (1917), Shri Krishna Janma (1918) and Kaliya Mardan (1919).
The Dadasaheb Phalke Award, for lifetime contribution to cinema, was
instituted in his honour by the Government of India in 1969. The award is
one of the most prestigious awards in Indian cinema and is the highest
official recognition for film personalities in the country. A postage stamp
bearing his likeness was released by India Post to honour him in 1971. An
honorary award from the Dadasaheb Phalke Academy Mumbai was
introduced in the year 2001, for lifetime achievement in Indian cinema.
 V. Data Collection

As promotional strategies had significant correlation with the frequency of

movie watching intention, movie marketers and brand consultants should
emphasize upon evolving innovative promotional campaigns so as to
attract more movie viewers. Considering that viewers preferred to see
renowned film stars to act as Brand ambassadors the same strategy could
be used rigorously for movie marketing. Popular Bollywood stars like Aamir
Khan, and Shahrukh Khan had used these strategies successfully to
promote their movies. Similar approaches might be adopted by other movie
producers. Promotions through the electronic media could bring about
competitive advantage for the movie makers in order to reach the mass
more effectively. Emphasis should be given more upon social media
promotions particularly through Facebook, Twitter. Multiplexes and
standalone movie halls can bring up their own promotion campaigns to
promote movies by common strategies like:
 Road shows
 Organizing special shows with movie stars
 Opening up reward programs and fun games for movie viewers
 Co-branding with leading FMCG and Fashion / Garments companies.
The Indian film industry is the largest in the world in terms of number of
films produced with around 1,500 to 2,000 films produced every year in
more than 20 languages. The industry also had the second highest footfalls
in the world in 2015 (over 2.1 billion) following China (almost 2.2 billion).
Despite the large number of films and theatre admissions, the industry
continues to remain small with respect to other global industries in terms of
revenue. In India, the film industries gross realization stands at $2.1 billion
versus gross realization of $11 billion in the US and Canada which
produces significantly lower number of films (approximately 700 films).1
This is mainly due to low ticket realizations and occupancy levels, lack of
quality content, and rampant piracy. Historically, the film industry in India
has grown at a CAGR of over 10%. Currently, the film industry grosses
total revenue of INR 138 billion ($2.1 billion). Going forward, the industry is
expected to grow at 11.5% year-onyear reaching total gross realization of
INR 238 billion ($3.7 billion) by 2020. The key growth drivers are expansion
of multiplexes in smaller cities, investments by foreign studios in domestic
and regional productions, growing popularity of niche movies, and the
emergence of digital and ancillary revenue streams. The domestic box
office contributes to the majority of the revenue, representing 74% of the
total industry. Cable and satellite rights and online/ digital aggregation
revenues are the fastest growing segments, and are expected to grow at a
CAGR of about 15% over the period FY15 – FY20, driven by rising demand
for movies on TV and increasing smartphone penetration across the
country respectively. On the other hand, home videos have been shrinking
due to increasing piracy and growing popularity of digital platforms. Home
video has lost share to Video on Demand (VOD) through Direct-to-home
(DTH) operators and Over-the-top (OTT) platforms. The Indian film industry
is dominated by Bollywood, the Hindi film industry, contributing 43% of the
revenue while regional and international films contribute the remaining 50%
and 7% respectively. Within the regional film industry, Tamil and Telugu are
the largest segments comprising approximately 36% of net box office
revenues followed by Bengali, Kannada, and Malayalam films. Currently,
international films is a small, but growing segment, driven by rising
numbers of English and other foreign language speakers, as well as rising
numbers of international movies witnessing dubbed releases across the
country.
 VI. Data Analysis and Interpretation

Key Trends in the Indian Film Industry

1. Film Production Segmen International/foreign films gaining share in the

Indian industry: International films is a growing segment in the Indian film
industry, having increased its box office share from almost 5% a few years
ago to approximately 7% today. This is mainly due to:
• Dubbing of international films in regional languages: The number of
foreign films dubbed into Indian languages has doubled over the past 5
years. These films are being dubbed into Hindi, Tamil, and Telugu which
has helped them reach audiences beyond Tier 1 cities.

• Rise of multiplexes: Multiplexes have witnessed significant growth across

major Indian cities and continued penetration in smaller towns. Investments
in multiplexes is mainly driven by improved per-ticket realization, rising
urbanization, and growing disposable incomes.
Entry of international studios through acquisitions and collaborations:
Several international film studios such as Warner Bros., Disney, Fox, and
Dreamworks have not only set up distribution houses in India, but have
also entered into partnerships with local film production houses through
acquisitions and co-production agreements. For example:
• Walt Disney acquired a 50% stake in UTV and now has a controlling
stake in UTV Software Communications.
• Viacom18, a JV between Viacom and Network 18, was the first studio
model based production house. Viacom18 engages in production,
syndication, marketing, and worldwide film distribution. Additionally, a key
example of collaboration has been Fox Star joining hands with Dharma
Productions in a deal worth INR 5,000 million. Fox has produced almost 30
Bollywood films, as well as a few Tamil and Malayalam language films.
Local film production can leverage the experience of these international
studios to expand their international reach and incorporate enhanced
project planning and cost controls.
Rise of regional cinema: While mainstream Bollywood dominates the Indian
film industry, regional cinema has been witnessing a surge in investments
from major film studios to tap the potential of underpenetrated markets.
Large national producers such as Reliance Entertainment, Eros, Disney,
Viacom 18 Motion Pictures, Fox Star Studios as well as independent
producers like Emmay Entertainment (Nikhil Advani), Akshay Kumar, and
Grazing Goat Productions plan to spend 20% of their annual budgets on
regional cinema. This is not only due to the relatively untapped nature of
the market but also because of cheaper cost of production of regional
movies. The average cost of producing a commercial Hindi film is INR 150
million versus a cost of INR 40 million for a Marathi or Punjabi film.
• South Indian film industry is very vibrant with revenue expected to grow at
a CAGR of 12% reaching over INR 42 billion over by 2017. This segment is
dominated by Tamil and Telugu films (90%) with 365 films released in
2015. However, the profitability of these films has been low with only 30%
recovering production costs. 2 While big budget films continue to account
for a large share of revenue (approximately 40%), smaller budget films with
strong content have been gaining popularity. Further, Tamil and Telegu
films have started to gain nation-wide and international popularity
• Malayalam film industry has witnessed high growth and profitability driven
by strong content and large audience in 2015. Over 140 films were
released during the year in Malayalam. High profitability was demonstrated
by films with good content making over INR 500 million at the box office
over movie budgets of INR 120–150 million.
• Bengali film industry has seen a slump in the recent years as poor
content, shift of audience to English and Hindi cinema, and lack of
infrastructure became growing challenges in the sector. Single screen
theatres have been successively shutting down in the state with over 100
screens closed in the last one and a half years.
• Marathi film industry has re-emerged over the last few years owing to
strong content, lower budgets, and government support. The segment has
shown 40–45% growth in 2015 reaching INR 1.5 billion in revenue. The
state government has bolstered sector growth through mandating
screening of at least one show of a Marathi film in a multiplex.
• Gujarati film industry is showing indications of coming out of a long slump
due to production of urban centric films and higher investments in the
sector. There has been a considerable jump in box office collections
reaching INR 550 million last year from INR 70 million in 2014.
• Punjabi film industry experienced a strong growth of 15–20% over the
previous year.

2. Marketing, Distribution and Exhibition Digital adoption across the value

chain: Real Image and UFO Moviez have facilitated the digitization of
movies enabling wider distribution of films across various regions and
curbing piracy. Key benefits of digitization can be witnessed across the
value chain:
• Film makers: Digital printing costs 80% less than conventional printing
which allows producers to scale up to 5 times the number of screens than
originally in the same budget. Due to this, digitization has enabled the
penetration of content to smaller cities and towns. In the current scenario,
over 60% of box office collections are realized in the first week of a movie’s
release. Increased penetration, simultaneous release across theatres, and
front-ending of revenue has resulted in a drastic increase in number of films
generating over INR 1 billion in box office revenues.
• Distributors and exhibitors: Digitization of content has resulted in the
reduction of costs of physical transportation and print manufacturing. Digital
content is delivered by way of satellite or hard drive adding convenience
and cost effectiveness to the process. Nearly all theatres have adopted
digital technology resulting in shift from large-sized projection systems to
smaller and more efficient digital projection systems. Although digital
projection systems have a heavy initial investment, the running costs as
opposed to analog are minimal.
• Consumers: Digital projection in the cinemas has superior quality of
images which are not subject to deterioration with the passage of time. It
has also given viewers access to technologies such as VFX, animation,
and 3D films. Digital cinema has also helped in addressing piracy as well.
With the advent of digital technologies, piracy of films and songs has
decreased tremendously. With digital distribution, movies are released on
the same day in all places and checks can be kept on where movies are
showing and how many times they are screened, resulting in reduction in
the scope for piracy.