PROJECT ON

ROLE OF FILMS IN OUR ECONOMY

SUBMITTED BY
KHUSBU MAHAPATRA
SEC B ROLL 2283221
BA LLB
 ABSTRACT
INDIA HAS A LONGSTANDING REPUTATION FOR ITS ACCLAIMED FILM INDUSTRY
AND CONTINUES TO BE BY FAR THE WORLD’S LARGEST PRODUCER OF FILMS.
NEVERTHELESS, DOMESTIC DEMAND FOR FILMS APPEARS TO BE WANING AS IN A
NUMBER OF DEVELOPED COUNTRIES WITH MATURE FILM INDUSTRIES. HENCE,
THE ECONOMETRIC ANALYSIS IN THIS PAPER IS PARTICULARLY TIMELY AS WITH
DEMAND FOR FILMS IN INDIAN CINEMAS FALLING IT IS IMPORTANT TO IDENTIFY
THOSE FACTORS THAT MAKE FILMS APPEALING FOR INDIAN AUDIENCES. AN
ORIGINAL DATASET IS UTILIZED THAT INCLUDES DATA ON ALL BOLLYWOOD
FILMS RELEASED IN INDIA BETWEEN 2011 AND 2015. ACCOUNT IS TAKEN OF THE
POTENTIAL ENDOGENEITY BETWEEN VARIABLES WITH THE GENERALIZED
METHOD OF MOMENTS APPROACH. RESULTS ARE USED TO DEMONSTRATE HOW
THE INDIAN FILM MARKET CAN CONTINUE TO HAVE A SIGNIFICANT POSITIVE
IMPACT ON THE INDIAN ECONOMY. THE DISCUSSION HIGHLIGHTS APPROPRIATE
FILM PRODUCTION COMPANY STRATEGIES AND GOVERNMENT POLICY
RESPONSES THAT SHOULD BE CONSIDERED TO ENSURE THE CONTINUED
SUCCESS OF THE INDIAN FILM INDUSTRY BOTH DOMESTICALLY AND IN AN
INCREASINGLY COMPETITIVE INTERNATIONAL MARKET.

INTRODUCTION
THE FILM INDUSTRY CONSISTS OF THE TECHNOLOGICAL AND COMMERCIAL
INSTITUTIONS OF FILMMAKING i.e., FILM PRODUCTION COMPANIES, FILM STUDIO,
CINEMATOGRAPHY, FILM PRODUCTION, SCREENWRITING, PRE-PRODUCTION,
POSTPRODUCTION, FILM FESTIVALS, DISTRIBUTION, EXPANSION OF
OPPORTUNITIES TO ACQUIRE INVESTMENT CAPITAL FROM OUTSIDE THE FIM
INDUSTRTY ITSELF, ALLOWING INDEPENDENTFIM PRODUCTION TO EVOVLE.
 OBJECTIVE
THE MAIN OBJECTIVE OF THIS PROJECT IS TO KNOW
1.THE IMPORTANCE OF FILMS WITH RESPECT TO INDIAN ECONOMY
2.TO EVALUATE PERFORMANCE OF FILMS
3.TO FIGURE OUT HOW THIS INDUSTRY IS HELPING OTHER SECTORS OF THE
ECONOMY.

KEY WORDS
GROSS OUTPUT-- REPRESENTS THE TOTAL VALUE OF GOODS SUPPLIED BY THE
ENTITIES IN THE INDUSTRY.YHIS IS MEASURED BY THE AGGREGATE REVENUES
OF ALL COMPANIES IN THE INDUSTRY.
GROSS VALUE ADDED [GVA]--THIS FACTOR MEASURES THE RETURNS TO LABOUR
AND CAPITAL.THIS MEASURE ALONG WITH THE NET INDIRECT TAXES INDICATES
THE INDUSTRY'SCONTRIBUTION TO THE ECONOMY.
NET INDIRECT TAXES –INDIRECT TAXES PAID BY THE INDUSTRY.
EMPLOYMENT—THIS MEASURES THE NUMBER OF WORKERS THAT ARE
EMPLOYED IN THE INDUSTRY.

FILM INDUSTRY IN INDIA

 INDIA IS THE LARGEST PRODUCER OF FILMS IN THE WORLD.
 IN 2009 INDIA PRODUCED A TOTAL OF 2961 FILMS ON CELLULOID THAT
INCLUDE A STAGGERING FIGURE OF 1288 FEATURE FILMS.
 FILMS ARE MADE IN MORE THAN 20 LANGUAGES.
 WITH 3.3 BILLION TICKETS SOLD ANNUALLY INDIA ALSO HAS THE HIGHEST
NUMBER OF THEATRE ADMISSIONS.
 INDIAN FILM INDUSTRY IS MULTILINGUAL AND THE LARGEST IN THE
WORLD IN TERMS OF TICKET SALES AND NUMBER OF FILMS PRODUCED.
BRIEF HISTORY OF FILM INDUSTRY IN INDIA
 1896: FIRST MOVING PICTURE SHOWED IN INDIA.
 1913: FIRST INDIAN MADE FEATURE FILM RELEASED.
 1931: INDIA’S FIRST TALKIE ALAM ARA RELEASED DUBBED INTO HINDI
AND URDU.
 1950: CALCUTTA BECOMES THE VANGUARD OF THE ART CINEMA.
 1970: BY THE BEGINNING OF THE YEAR THERE EXISTED ABOVE 150 FIM
SOCIETIES ALL OVER INDIA.
 1980: THE FILMS TOOK A STRONGER STANCE ON SOCIAL ISSUES WITH AN
OUTPOURING OF THE SOCIAL CONSCIENCE AND FLOWING OF NEW IMAGES.
 1990: IN THE 1990S VIDEO, NATIONAL AND SATELLITE TELEVISION HAVE
RESULTED IN THE DEVELOPMENT OF A PROLONGED CRISIS IN INDIA’S
MOVIE INDUSTRY, WHERE COMMERCIAL AND ART FILMS ARE EQUALLY AT
RISK OF FALLING AT THE BOX OFFICE.

ROLE OF IMPORTANCE OF FILMS IN OUR ECONOMY

FILM INDUSTRY IS ONE OF THE IMPORTANT CONTRIBUTORS TO THE ECONOMY
AND PLAYS A VERY IMPORTANT ROLE IN ECONOMIC DEVELOPMENT DUE TO THE
FOLLOWING REASONS:
 CONRTIBUTION OF FILMS TO THE GDP IS 183 BILLION INDIAN RUPEES IN
2022.
 THE COMBINED REVENUES OF FILM INDUSTRY IS AROUND USD 2 BILLION A
YEAR.
 THE FILM INDUSTRY IN INDIA IS ONE OF THE WORLD'S LARGEST MARKETS
IN TERMS OF NUMBER OF CONSUMERS AND OFFERS SIGNIFICANT GROWTH
POTENIAL. OVER THE PAST FEW YEARS, THE INDUSTRY HAS EXPERIENCED
RAPID DOUBLE-DIGIT GROWTH AND IT IS EXPECTED THAT THIS TREND
WILL CONTINUE IN FUTURE, RESULTING IN INCREASING CONTIBUTION TO
THE INDIAN ECONOMY.
 THE SECTOR HAS TOTAL OUTPUT MORE THAN 20 BILLION DOLLARS
CONTRIBUTING MORE TO THE GDP OF INDIA THAN ADVERTISING SECTOR.
 FILM INDUSTY CREATES MORE THAN 2 MILLION JOBS, DIRECTLY OR
INDIRECTLY IN THE ECONOMY.
 PROSPECTS
 GROWTH IS EXPECTED TO COME FROM THE EXPANSION OF MULTIPLEXES
IN SMALLER CITIES, INVESTMENTS BY FOREIGN STUDIOS IN DOMESTIC AND
REGIONAL PRODUCTIONS, THE GROWING POPULARITY IN NICHE MOVIES AND
THE EMERGENCE OF DIGITAL AND ANCILLARY REVENUE STREAMS.

 GLOBALISATION OF THE INDIAN FILM INDUSTRY.INDIAN PRODUCERS ARE

IMPROVING THE INTERNATIONAL MARKETIBILITY OF LARGE BUDGET INDIAN
MOVIES BY BUILDING PARTNERSHIPS WITH INTERNATIONAL SCEENWRITERS,
COMPOSERS AND TECHNICIANS. INTERNATIONAL FILM STUDIOS ARE ALSO
PRODUCING AND DISTRIBUTING OR PRODUCING INDIAN FILMS.OF THE TOP
SIX INTERNATIONAL MOVIE STUDIOS FOUR ARE INVOLVED IN DISTIBUTING
OR PRODUCING INDIAN MOVIES.

 SMALL BUDGET FILMS OF MAINSTREAMS SMALL BUDGET NICHE

FILMS WITH HIGH QUALITY SCRIPTS HAVE RECENTLY GAINED
ACCEPTIBILITYAMONG MAINSTREAM AUDIENCES.STRONG CONTENT AND
WORD OF MOUTH MARKETING HAVE HELPED STUDIOS TO GENERATE HIGH
RETURNS FROM THESE FILMS, THEREFORE DIVERSIFYING THEIR RISK FROM
BIG BUDGET MOVIES.

 EMERGENCE OF NEW SOURCES OF REVENUE IN THE LAST FEW

YEARS THE WINDOW AVAILABLE TO MONETIZE A FILM'S REVENUE AT THE
BOX OFFICE HAS SHORTENED CONSIDERABLY.THIS IS DRIVING FILM STUDIOS
TO EXPLOIT ANCILLARY STREAMS OF REVENUE SUCH AS PAY PER VIEW,
MOBILE, ONLINE GAMING AND LICENSING AND MERCHANDISING.THE
REVENUE FROM THESE ANCILLARY STREAMS AND CABLE AND SATELLITES
RIGHTS ARE PROJECTED ARE PROJECTED TO GROW AT A CAGR OF 16% FROM
2009 TO 2014.
 DIRECT CONTRIBUTION TO THE ECONOMY

GROSS GROSS VALUE NET Employed

OUTPUT ADDED [GVA] INDIRECT
TAX
Rs. In USD Rs. In USD Rs. In USD lakhs
crores million crores million crores million

Indian film 12,312 2709 2132 469 800 176 1.4

industry

GROSS OUTPUT Contribution {GVA+NIT} Employment

Rs. crores USD million Rs. crores USD million lakhs

Direct impact 12,312 2709 2932 545 1.4

Indirect 8,154 1794 3914 861 2.8
impact
Total impact 20457 4503 4503 1506 4.2

MAJOR PROBLEMS OF INDIAN FILM INDUSTRY

 PIRACY IS THE MAJOR OR MAIN PROBLEM OF INDIAN FILM INDUSTRY.
 INDIA IS BECOMING AS ONE OF THE BIGGEST HUB OF FILM PIRACY.
 INDIA RANKED 4TH IN THE WORLD WHEN IT COMES TO ILLEGAL
DOWNLOADS, BEHIND USA, UK AND CANADA
 FINDINGS
1.LACKS PEOPLE ARE GETTING EMPLOYED IN THIS INDUSTRY.
2.DIGITALIZATION HAS HELPED A LOT THE INDUSTRY IN GETTING REVENUE
FROM NEW SOURCES.
3.FOREIGN ENTERTAINMENT COMPANIES SUCH AS FOX, DISNEY ARE ALSO
INTERESETED IN INDIAN FILM INDUSTRY, INVESTING LOTS OF MONEY.

CONCLUSIONS
1.SO WE CONCLUDE THAT FILM INDUSTRY IS THE MAJOR INDUSTRY IN INDIA’S
ECONONOMY.
2.LAKHS OF PEOPLE ARE GETTING EMPLOYED FROM THIS SECTOR.
3.DIGITALIZATION HAS HELPED A LOT IN THIS INDUSTRY.
4. THERE ARE PROBLEMS LIKE PIRACY AFFECTING IT.