Team 5Team Members: Asheem Sher - 09020241007 Gaurav Arora -
09020241008 Manoj Gupta - 09020241016 Namit Sharma - 09020241021
Aniket Sharma - 09020241023 Sidharth Kapil - 09020241029 Tejas
Godbole - 09020241031 Parixit Pandey - 0920241041 Harshan Sethi -
09020241060
The Indian film industry produces around 1,050 films and sells
around 4 billion movie tickets, each year. In 2008, the size of the
Indian film industry was estimated to be USD 2.58 billion. While
the domestic box office collections contributed as much as 60%, the
home entertainment contributed a mere 6% to the total revenues,
which is significantly lower as compared to developed
countries.Source: E&Y, Apr-2009
Indian film industry expected to grow at CAGR of 11.2% over next
5 years [compared to over 15% CAGR growth before economic downturn]
Current size of Indian film industry estimated around Rs 109.2
billion in 2008 which is expected to grow at a CAGR of 12.2% to
reach Rs168.6 billion by 2013.Source: (E&Y, Apr-09)
Distribution Channel
The producer completes the movie. Process of Buying Rights: The
producer decides the number of movie of reels that would be
allocated to the distributor. Rights contain: Purchase of reels
Purchase of Publicity material
Based on previous success record of the producer, the movie post
completion is demanded by distributors. The producer estimates the
demand for his movie and accordingly sends the movie to be printed
in Adlabs, Mumbai for creation of movie reels. Movie reels are
forwarded to distributor at the cost decided by producer.
Step by Step Analysis
Movie transfer from distributor to exhibitor begins on
Tuesday/Wednesday evening for a show on Friday in cinemas halls.
The reels are transferred by road, air or rail on the basis of the
distance of transfer. For distribution of films to eastern zone,
the reels are sent on Tuesday evening. The distributors are not
exhibited the film before the sale of the film, hence his buying is
totally based on producer s reputation in the market. E.g. Due to
this process, Failure Chandni Chowk to China & Success Bheja
Fry
Step by Step Analysis
The distributors that approach the producer are from various
zones of the country classified in to zonal areas, namely North,
east, south & west. Post the collection of movie reels by
distributor, the distributor decides the exhibitor through whom
movie will be shown. The formats of movie presenting like printing
of posters, advertising, promotion, show timings, no. of shows are
provided by producer. However used by exhibitor & distributor.6
Sheet (big banner), 2 sheet (small banner)
Step by Step Analysis
Shuttling: This is the method used by distributors in which
distributors rotate the given film roles within cinema halls. The
basic idea behind this concept is that printing of one role for one
cinema is not cost efficient for the distributor. The cinema hall
owners have a schedule given to them by distributors stating the
upcoming movies in next 6 months. Hence, an exhibitor can decide
and convey the time period for which he would like to present the
movie in his hall.
Information FlowProducer Distributor Exhibitor
Intermediary
Distri I i
ti s rvic s r vi ri I t r ti l fil
cl siv l t Y s f stiv l(s)
j Fil s
Fil s c
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1. MUMBAI (Bombay circuit comprising part of Maharashtra,
Gujarat & Goa) Yash Raj Film Distributors, headed by Mr. Rajesh
Malhotra. 2. DELHI (Delhi-U.P. circuit) Yash Raj P. P. Associates
Private Limited 3. JALANDHAR (East Punjab circuit) Yash Raj Puri
& Co. Pvt. Ltd. 4. JAIPUR (Rajasthan circuit) Yash Raj Jai
Pictures Private Limited 5. AMRAVATI (C.P. circuit) Yash Raj Films
Private Limited through Khajanchi Film Exchange 6. INDORE (C.I.
circuit) Yash Raj Films Private Limited
7. BANGALORE (Mysore circuit) Yash Raj Pal Films Distributors
(Bangalore) Pvt. Ltd. 8. SECUNDERABAD (Nizam circuit) Yash Raj
Vandana Films Distributors Private Limited 9. CALCUTTA (Bengal
circuit) Yash Raj Kushagra Arts Private Limited 10. CHENNAI (Tamil
Nadu circuit) Yash Raj Films Private Limited 11. ANDHRA PRADESH
(Andhra circuit) Yash Raj Films Private Limited 12. COCHIN (Kerala
circuit) Yash Raj Films Private Limited
Step 1 Research potential distributors. Identify the movie's
genre and the audience it appeals to most. Find distributors that
have released similar titles. Step 2 Talk with distributors to
determine if there is interest on both sides. Once you have
selected the company to distribute the film, ask them to draft a
generic distribution agreement for you to amend. Step 3 Consider
the territory that the agreement covers. Use one distributor for
the zones
Step 4 Discuss whether the distribution agreement covers
theatrical screenings only or include DVD distribution, as well as
the length of the terms. It is to the filmmakers advantage to have
a short term--less than 5 years--with automatic extensions. Step 5
Include the amount of publicity and media the distribution company
is obligated to perform on behalf of the film. This figure includes
number of print materials and advertisements to be created to
publicize the film, interviews, articles and reviews. Step 6 Agree
upon the distribution fees. Filmmakers can either agree to a 50/50
split of the profits after the distributor recoups the costs of
distributing and marketing the film.
Source: Ra i Enterprise, Mumbai
The document begins with following text: Agreement made and
entered into as of AGREEMENT DATE by and between DISTRIBUTION
COMPANY, ("Distributor") at ADDRESS OF DISTRIBUTION COMPANY, and
PRODUCTION COMPANY, ("Producer"). In consideration of their
respective covenants, warranties and representations, together with
other good and valuable consideration, Distributor and Producer
hereby agree on following: PICTURE - PRODUCTION FORMAT (I.E.
35MM/16MM/DIGITAL) RIGHTS GRANTED Advertising Editing Title
Territories Dispute clause Warranties
Producer to Distributors:
Producer
Distributors
Conventionally, the distributor has been transferring money on
the transfer of the reel. This is like a sale purchase. The
distributor purchases the movie at the price decided by the
producer. The revenue generation for producer ends post sale to
distributor.
The revenue earned by the distributor is by way of presenting
the movie through cinema halls.
DistributorsDown payment Plus weekly revenue:
Exhibitors
In this case the exhibitor needs to pay a down payment to the
distributor at the time of transfer of film. Post this exhibitor
pays the distributor a percentage of the sales or the box office
collection. E.g. for Yash Raj films, Yash Raj Distributors Co.
carry on the distribution. Their model is of 5Lac down payment +
40% revenue collection. However, they came in news at the time when
they increased their costs to 10lac down payment + 50% revenue
collection. This led to elimination of profits for exhibitors, thus
dispute. This was done for Tashan movie
Only Weekly collection: The exhibitor in this model only
presents a percentage of revenue collections to the distributor. In
this case, scaling model of pricing is used.
E.g. Mangala Talkies, Deccan, Pune uses a model in which the 50%
of the first week collection goes to the distributor. In the next
week, scaling takes place and 40% of the box office collection goes
to distributor followed by 35% of box office collection. The nature
of hall, multiplex or single screen also decides the revenue
model.
The Market: What has changed
Actors Certain actors in the industry charge distribution rights
as a part of their fee charged from the producer. Few are
like:Shahrukh Khan: Fee + Distribution rights of USA & UK Amir
Khan: Has his own distribution company; does distribution only for
his films Akshay Kumar: Fee + Distribution rights of Canada &
UK
With more demand of films there is a rise in the number of
foreign distributors entering India.Fox Century distributors in
India closed foreign film distribution & now have started with
distribution of Indian films worldwide Warner Bros has tie up with
kyazoonga.com, an online store for book tickets so as to eliminate
the any sort of discrepancy which might occur at the exhibitor s
end during the time of collection
Foreign direct investment (FDI) of 100% is permitted in all
film-related Activities such as film financing, production,
distribution, exhibition and marketing
Distributor
Distributor
West Zone
East Zone
North Zone
South Zone
Mumbai
Other Maharashtra
Gujrat
Adlabs, Wadala
PVR, Juhu
Cinemax, SION