The ECO-SYSTEM of Cinema

-By Gracy Gupta

In today’s world, film media and cinema has become a large chunk of everybody’s life.
Industries and cultures make significant contributions to countries' economic development.
Cultural economy is the sum of industries wherein the input is creative and cultural efforts and
the output is products, creations and activities and it is these creations and products that meet
with the consumer. Providing a high economic return of creative business services such as
media, music, movies, games, publications, fashion, design, museums, galleries, cultural and art
activities, cultural heritage and culture management shows the place of economics in the field
of culture.

Cinema industry is one of the strategic industries of a country with the power of turning into
economical value, through this concept of cultural economy. Creative industries in recent years
have better understood the importance of economic prosperity; and creativity today is an
absolute production source. The relationship between the economy and cinema is a complex
and multifaceted one, with the two industries influencing each other in a variety of ways. On
the one hand, the film industry is a significant contributor to the economy, generating billions
of dollars in revenue and providing jobs for thousands of people. On the other hand, the
economy also has a significant impact on the film industry, influencing the types of films that
are produced and the way in which they are marketed and distributed.

The importance of cinema and TV series industry has increased and its economic function has
clarified with the development of media and technological infrastructure. The film industry is
divided into main branches such as cinema, TV, advertising films and series. It has a strategic
importance for development and promotion of a country. Recognition of this importance and
development of the sector both financially and morally are significant.

One way in which the economy affects the film industry is through its impact on consumer
spending. When the economy is strong and people have more disposable income, they are
more likely to spend money on entertainment, including movies. This can lead to a higher
demand for films and an increase in box office revenue. Conversely, when the economy is in a
recession, people tend to cut back on nonessential spending, which can result in a decrease in
box office revenue. This can make it more difficult for independent and smaller film studios to
secure financing for their projects, as investors may be more hesitant to invest in a risky
venture during a time of economic uncertainty. This is what happened when COVID began to
sweep the globe in March 2020. Movie theatres were forced to darken their hoardings, close
their doors, and lay off hundreds of workers rendering this industry high and dry.

The film industry also has a significant impact on the economy. The film industry generates
billions of dollars in revenue and provides jobs for thousands of people. The film industry is also
a significant contributor to the tourism industry, as people travel to locations where films are
being shot or to attend film festivals. Additionally, the film industry can also lead to the
development of other related industries, such as video game development, merchandise sales,
and theme parks. A different way to look at the contribution of film technology to the economy
is to look at the consumer surplus generated by cinema. This approach assumes that cinema is
a wholly new good and that therefore the entire consumer surplus generated by it is ‘new’ and
would not have existed without cinema. For an individual consumer, the surplus is the
difference between the price she was willing to pay and the ticket she actually paid. This
difference varies from consumer to consumer, but with econometric techniques, one can
estimate the sum of individual surpluses for an entire country to get the entire consumer
surplus for the economy- a great source of revenue that cannot be overlooked in the
calculation of the GDP of a country.

Furthermore, the film industry also has a significant impact on the cultural and social aspects of
a society. Movies are powerful medium of storytelling and can be used to inform, educate and
entertain people. They can also be used to shape public opinion and influence cultural norms.
In recent years, movies have become a major influencer especially for the youth. For example,
films about social issues such as poverty, racial discrimination, and gender equality can raise
awareness about these issues and inspire people to take action to address them. In addition,
the effect of technology on the film business is another facet of the relationship. As a result of
developments in digital technology, more independent and low-budget productions are now
possible. This has caused the sector to become more democratic, giving more voices and
perspectives the opportunity to be heard.

Bollywood (the Indian film and music industry) is just like any other industry that contributes
enormously to the GDP of our country. Like any other cinema industry, the Indian film and
music sectors have production houses that get funding from financiers. They employ artists,
directors, actors, and other talent to produce a movie or music CD using a lot of infrastructure.
The rights are subsequently sold to distributors, who in turn resell them to merchants like
movie theatres and television networks. There is a complete ecosystem that generates a large
number of jobs apart from funds. However, the new business model of web stream services,
also known as OTT (Over the top) platforms, is posing a threat to this established and
traditional market ecosystem of the Indian entertainment sector. The shift to OTTs became
particularly intense after the pandemic led to the shutting of cinema halls for a considerable
period of time. There are currently more than 45 crore OTT subscribers today in India and this
number is expected to touch 50 crores by end-2023. The eye-catching expansion of the OTT
industry in India has been fueled by factors including high-speed mobile internet at low pricing,
a doubling of Internet users, growing use of digital payments, and discounts. Services like
Netflix, Amazon Prime, and others produce their own content and communicate with their end
users/consumers directly. All of a sudden, the market ecosystem is under danger. The fact that
major movie retailers like PVR and INOX, who have invested heavily, might get sidestepped in
the value chain for content distribution, has made them not only angry but also restless.

To sum up, the economy and the film industry have a complicated relationship that affects each
other in a number of different ways. While the film business can significantly affect the
economy by generating income and creating jobs, the economy can also have an impact on the
film industry by affecting consumer spending and the cost of production. Government funding
and support, advancements in technology, and shifts in audience consumption all play a role in
shaping the industry. The cultural and social features of a society can also be significantly
impacted by the film industry. The film business must be aware of current economic situations
and adjust as necessary, keeping in mind the films' potential to have a positive or negative
impact on culture and society.

References-
https://www.sciencedirect.com/science/article/pii/S1877042813039797/pdf?md5=59e860390
30dcfdf04261dbba2282147&pid=1-s2.0-S1877042813039797-main.pdf

https://eh.net/encyclopedia/the-economic-history-of-the-international-film-
industry/#:~:text=The%20output%20per%20worker%20increased,1%2C575%20to%208%2C175
%20spectator%2Dhours.

https://opiniown.com/economics-of-the-indian-film-industry/