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Bollywood Economy

Bollywood Economy

Content BollywoodIndian economyEconomic aspects of BollywoodLeading players in the industryEconomic growth of the industry in the last 5 yearsMovies that contributed to the growthComparison with other regional movie industriesImpact of Bollywood on other industriesReason for the high rate of investment into the industryImpact of recession on the industryBenefits to governmentConclusion

Bollywood Popularly known as Hindifilm industry.Based inMumbai, Maharashtra.Originated in 1913. Term coined in 1970s, inspired by Tollywood, the Bengali film industry.Often used to refer to the whole Indian film industry.Unlike Hollywood it does not have a physical existence.

Indian film industry facts and figuresOver 250 films are censored or released each year in Bollywood.Hindi film industry is the largest film industry in India, in terms of the ticket sales and the number of film produced annually.20 million people go to movies on daily basis and pay the equivalent to average Indians days wages.The Central Board of Film Certification cites on its web site that every 3 months as audience as large as billions population visits cinema halls.

Indian Economy

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.

India, an emerging economy, has witnessed unprecedented levels of economic expansion, along with countries like China, Russia, Mexico and Brazil. India, being a cost effective and labor intensive economy, has benefited immensely from outsourcing of work from developed countries, and a strong manufacturing and export oriented industrial framework. With the economic pace picking up, global commodity prices have staged a comeback from their lows and global trade has also seen healthy growth over the last two years.

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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% of wealth, while the poorest tenth only hold 3%.

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

Indias economic projections

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

2008 2009 2010GDP growth 7.30% 5.40% 7.60%CPI growth 9.30% 5.50% 4.90%

CPI- per capita incomeGDP gross domestic product7

Economic aspects of Bollywood

The Rs.130-billion ($2.85 billion) industry is one of the fast growing sectors in the country with expanding global reach. Approximately 250 movies are produced each year, ranging from budget of $200,000 to $50,00,000.

During the last decade, exports have grown from Rs.100 million ($2.18 million) to Rs.1.5 billion ($32.85 million).

The industry is expected to grow at the rate of 19 percent and reach a turnover of over Rs.260 billion ($5.7 billion) by 2011.

Provides employment to more than 1,75,000 people. Has employment generating capacity of nearly 35,000 per year.

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In the year 2009 , 27% of the money invested in the industry was from NRIs and it rose to 31% this year.

Recently, the Govt has diluted the restrictions regarding FDI into the media and entertainment, which allows the NRIs to pool in funds into Bollywood.

The industry makes an annual income of more than US$500 billion a year approximately.

The industry is growing at the rate of 11.2% per year.

Leading Players in the industry

Yashraj filmsRed chillies productionEros internationalUTV Movies Shree Ashtavinayak Cinevision Pvt. LtdSheemarooDharma productionsKaleidoscope Percept picturesBhandarkar productions

Yashraj Films Yash Chopra- MDAditya Chopra- CEO Highest grosser in the entertainment business.Collectively, 8 of the recent YRF productions have grossed in excess of200 Million US Dollarsworldwide.Produces almost 5 movies a year, budget ranging from 40 crores 90 crores.Employs more than 35000 people ranging from technicians to junior artist and flimstars.

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 million from USA, UK and UAE, in 2009-2010.Employs nearly 19,000 people.

Eros International

Owner - Komal Nahta Have a strong hold on the overseas markets of USA and UAE.Produces 5 movies on an average each year, 10 crore 50 crore .Have earned a revenue of US$ 135 million from USA and UAE, in 2009-2010.Employs nearly 14,000 people on temporary basis.

Eros International Year Class of sharesAuthorize-d capitalIssued capitalPaid up shares (no.)Paid up face valuePaid up capital2009-2010Equity shares 125.00 71.417,14,07,000 10.00 71.41

UTV MoviesChairman Naresh ChandraConcentrates on only small and medium budget films, ranging from 2.5 crores 10 crores . 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 .

Shree Ashtavinayak Cinevision Pvt. LtdChairman & 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- east Asia.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 temporary basis.

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

Year No. of films produced FDIAnnual investmentRevenue earned2006 284 11%m960 crore US$235 billion2007 249 17%m840 croreUS$340 billion2008 273 20%m875 croreUS$317 billion2009 241 27%m985 croreUS$475 billion2010 235 31%m1060 crore ---------

Source- report from Research institute of media planning and management, August2010

Fastest growing industry in India.

Contributes 29% to the growth of Indian economy.

Expected to be the largest contributors of growth in India.

Industry is attracting more and more FDI.

Annual investment is increasing at a rapid rate.

Recent movies that added to the revenue of the industry

Top five highest-grossing Bollywood films in IndiaRankMovieYearStudio(s)Net Gross(according to BOI)Net Gross(according to IBOS)13 Idiots2009Vinod Chopra ProductionsRs. 202,57,00,000Rs. 189,38,74,7292Dabangg2010Arbaaz Khan ProductionsRs. 140,00,00,000Rs. 142,48,31,0003Ghajini2008Geetha ArtsRs. 114,67,00,000Rs. 117,48,22,7564Raajneeti2010Prakash Jha Productions/UTV Motion PicturesRs. 92,93,00,000Rs. 94,89,66,3165Rab Ne Bana Di Jodi2008Yash Raj FilmsRs. 86,78,00,000Rs. 73,52,37,848

Comparison with other regional movie industries

Other film industries in IndiaTollywood (Bengali)Tollywood (telugu)Lolywood (lucknow)Ollywood (orissa)Kollywood (tamil nadu)Sandalwood (kannada)Bhojpuri film industry

Tollywood The Bengali film industry.

Approximately 160 movies are produced each year, ranging from budget of $20,000 to $3,00,000.

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

There has not been any contribution to the industry through FDI.

The industry makes an annual income of more 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 only 4% of the growth of Indian economy.

Mollywood The Malayalam film industry film industry.

Approximately 90 movies are produced each year, ranging from budget of $200,000 to $50,00,000.

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

There has been contribution to the industry through FDI.

The industry makes an annual income of more than US$110 million a year approximately.

The industry is growing at the rate of 6.4% per year.

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

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 30,000 people. Has employment generating capacity of nearly 1000 per year approximately.

There has been 11% contribution to the industry through FDI.

The industry makes an annual income of more than US$90 million a year approximately.

The industry is growing at the rate of 7.8% per year.

Annual income of the industry adds to only 3% of the growth of Indian economy.

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 32,000 people. Has employment generating capacity of nearly 1700 per year approximately.

There has been no contribution to the industry through FDI.

The industry makes an annual income of more than US$15 million a year approximately.

The industry is growing at the rate of 4.7% per year.

Annual income of the industry adds to only 2% of the growth of Indian economy.

Ollywood Approximately 60 movies are produced each year, ranging from budget of $60,000 to $2,00,000.

Provides employme