Business of Bollywood

Vijay: Aaj mere paas paisa hai, bangla hai, gaadi hai, naukar hai, bank balance hai, aur tumhare paas kya
hai?
Ravi: Mere paas Bollywood hai!
What do we know the Hindi film industry as? Many would argue against the name, but Oxford has
accorded this term a place of its own in its English dictionary. The word Bollywood is an epithet for the
film industry based out of Mumbai, Maharashtra.

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Bollywood is one of the largest film producers in India and one of the largest centers of film productions
in the world. In terms of the number of films produced each year, Bollywood is even ahead of Hollywood
as well as the Chinese film industry. While annually about 500 movies are produced in Hollywood and
about 800 in China, the numbers touch a staggering 1600 in India. This amounts to a gross box office of
$8 billion per annum.

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The Hindi film industry has been growing by leaps and bounds year by year and the earnings too have
been increasing exponentially. It has now become a mad game about numbers where anything grossing
below 100 Crores isnt even considered worth considering.
The budget allotted to movies varies across different production houses depending upon the star cast
and their respective packages. The net amount is pocketed as profit before tax. During the first decade
of the 21st century, there was a steady rise in the ticket price, a tripling in the number of theaters and
an increase in the number of prints of a film being released, which led to a large increase in the box
office collections.
The highest grossing movie in Bollywood till now has been PK from Vinod Chopra Productions with the
worldwide gross earnings to the tune of Rs. 735 crores (about $110 million), closely followed by an intheatres movie, Bajrangi Bhaijan with earnings of Rs. 636 crores (about $95 million). These numbers are
however nowhere close to gross box office of Hollywood movies like Titanic, Avtar and Jurassic World
which is more than 1 billion dollars each.
Mega budget movies with special effects and extremely picturesque locations have been facilitated in
Bollywood with the provision of 100% FDI. That is the reason why we see the presence of foreign
enterprises like 20th century Fox, Sony Pictures, Walt Disney Pictures and Warner Brothers more often
these days at the starting reels of movies. Then again, in the case of Hollywood, its not just the large
screen, their earnings come by way of DVD or Blue Ray releases, DTH releases (paid followed by unpaid).
Every movie is attached with plethora of merchandise sales, ad space sales within the movie as also
during screenings (both in large and small screens), as also mobile apps where movies are sold for
mobile viewing after all other screens are exhausted.

These days immense marketing activities are conducted before release of a movie by way of music
releases, fan engagements with movies stars, social media trailer promos, sometimes unwholesome
controversies and also the movie stars joining some social cause to create a favourable public image
around them and their movie. All this is done in order to drag the audience to the holy grail of movies,
the cinema theatres.
The business of Bollywood is no longer taken lightly, since it has started contributing to the
governments coffers by way of entertainment taxes. Yet, crores spent may just go down the drain if
script and story fails to interest the audience. Then there is the long wait for the next release in order to
cover the losses of the previous one. But, nothing can dampen the spirits of the Hindi film Industry as
they say Bade Bade Deshon Mein Aisi Choti Choti Baatein Hoti Rehti Hai.
- Ms. Monica Mor

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Sr. Faculty, INLEAD