Tinsel Town Toppled
Bollywood, formerly known as Bombay cinema, is the Indian Hindi-language film industry based in Mumbai (formerly Bombay). The term is a portmanteau of Bombay and Hollywood. One can trace its roots back to the late 1890s, the initiation point of this behemoth industry.
Hindi Cinema that we know of was not always so gargantuan and glamorous. It has a chequered past and has seen its fair share of dull moments. Although modern Bollywood began in 1931 with India’s first sound film Alam Ara, the Great Depression suppressed the industry for almost two decades. After a dull phase marked by the depression, Bollywood entered its so-called golden age auspiciously at the time when India gained its independence from the British. Filmmakers were now burning with patriotism and passion to build their film industry by taking over the reins of Cinema. They produced some of the most critically acclaimed films of all time during this era.
Fun Fact: Zindagi Na Milegi Dobara was enlisted as a case study in marketing management courses in the universities of Spain because tourism of the country saw a rise of 32% after the film’s release. Impressive right?
That was until the 1960s. Then came the Classic Era of Hindi Cinema and was prevalent from the 1970s to the 1980s. The proliferation of television sets into every household since the 1980s came as a blow to the industry. To compete for screen time, they focused on producing grandeur and spectacle that the small screen could not achieve. This strategy led them to new heights of commercial success. At the turn of the 21st century, Bollywood cemented its place as the entertainment King with Mumbai as its capital. As an industry, Bollywood has made its mark economically, raking in humongous revenues and generating employment opportunities for thousands of people. Let’s talk about a few avenues and numbers it boasts of:
Drawing from the fiery speech by Jaya Bachan made in Parliament to defend the industry in a recent controversy, she claimed that Bollywood directly employs 5 Lakh people and indirectly employs 50 Lakh! A closer look at the numbers since 2013 shows us a marked increase in employment opportunities offered. According to Statista, the industry employed 170,000 people in 2013 and has seen a steep increase to 250,000 in 2017. Increased access to the internet and the proliferation of films online has resulted in immense growth, attracting a larger audience that was difficult to reach earlier.
Biggest Bollywood Hits,2019
2. Costs and Revenues:
Earning a mind-boggling 4000 crores in 2019, the industry has gone from strength to strength in terms of revenue. It accounts for 20% of all revenue amongst the Indian media and entertainment industries. The industry has grown at an enviable 11% CAGR in the past four years. Even if COVID-19 derails the expected revenue target for this year, with increasing releases on OTT platforms to complement silver screen releases, many experts claim that the drop in viewership will be a temporary deviation than permanent damage to this resilient market.
With the splendor of the films come massive costs. Most films are multi-million-dollar productions. The science fiction film Ra One was made on a budget of $27 million, making it the most expensive Bollywood film of all time. Sets, costumes, special effects, and cinematography all account for significant chunks of the total cost. Add to that the Indian diasporas penchant to watch movies shot in foreign locations, crews shooting in Europe, and other exotic locations drives costs further.
Fun fact: The Indian film industry is segmented by language. The Hindi language film industry is the largest sector, representing 43% of box office revenue. The combined revenue of Telugu and Tamil film industries represents 36%.
3. Funding: a stain on the industry?
Funding comes from a few private players and large studios. Till 2013, there was a ban on financial institutions lending money to produce Bollywood films. This changed after a gazette from the Information and Broadcasting Ministry stating that it would support film studios after which the ban was lifted. Finances within the industry are not regulated and some funding comes from illegitimate sources such as the Mumbai underworld. This tainted association has ruined the reputation of many stars who have relations with Mumbai's underbelly.
4. Leading players and Indirect benefits:
Leading players in the industry include Red Chillies production, Yash Raj Films, Eros International, Dharma Productions, Kaleidoscope, Percept Pictures, and Bhandarkar Productions. Amongst them, Yash Raj Films is the highest grosser in the entertainment business and employs 35000+ people including junior artists, directors, and established actors.
Despite the high profile of Bollywood in Mumbai, film production also has positive spillover benefits to other local economies. The benefits are evident in Chennai where film production has long been established, with films made in four key southern Indian languages. There are also notable film production activities in Hyderabad, Karnataka, Kolkata, and Kerala that benefit the local economies,” Fetscherin wrote in the Global Journal of Marketing in a case study on Indian cinema.
Credit: Satish Acharya. Cartoon relating to the debate on nepotism.
The COVID problem:
The year has had a devastating effect on the Hindi Cinema Industry. Movie theaters have shut their doors, production companies have canceled shoots, and film studios have delayed releases. The pandemic is likely to cost India’s film industry more than $330 million in lost box office revenue and canceled production shoots.
The negative spillover onto dependent businesses has also been harsh. With 9,500 theatres shut, business at multiplexes and single-screen cinemas is unlikely to bounce back for months, as people cut down on discretionary spending. The drop and bleak future are mirrored by stocks of PVR and INOX Leisure, which have plunged more than 40% from their respective all-time highs. Experts claim that it may take a few years for the industry to recover from the situation precipitated by the pandemic.
But ultimately, it all boils down to how the industry responds to this crisis. Given the resilient nature of the market and its deep integration with Indian culture, many speculate that this is merely a temporary setback. With a few successful releases on OTT platforms, there are signs of a resurgence within the industry. But in the long term, how the industry weathers the COVID storm along with other controversies will be interesting to observe. Only time will tell us the outcome of all that has happened this year. Until then, watch on!