FICCI-KPMG-Report-13-FRAMES

The power of a billion: Realizing the Indian dream
61
Distribution – Digital dominance is here
Over the past few years the industry has steadily shifted
from releasing films with physical prints to digital
distribution. The share of the digital format has increased
from roughly 50 percent 3 in 2010 to around 80-90
percent 4 in 2012. Digital distribution has enabled films to
broaden their reach and do it far quicker than ever before.
Distributors are now able to capture revenues in a shorter
time frame by having same-day release across theatres and
pre-selling C&S rights. Most films now garner about 60-80
percent of their revenue in the first week of release 4 .
Box office success in the first week is considered critical
and marketing plays an important role in determining
turnout. Some reports indicate that pre-release marketing
budget is found to be highly correlated with the opening
weekend success of a movie 5 . With this trend increasingly
becoming prominent, advertising spends are on the rise.
Print and advertising (P&A) budgets witnessed a 20 percent
Y-o-Y increase in 2012 4 with marketing spends dominating.
In 2012, on an average 60 percent 4 of P&A budgets were
spent on promotion and advertising of the film.
Film marketing activities have progressed beyond
posters and promos with the aggressive use of new
marketing tools on social media, portals, search engines
and even activation. Use of social media has become an
important component of pre-release marketing strategy
for any movie. Some players have gone a step ahead and
developed mobile apps for promoting their movie. For
instance, Disney UTV’s marketing team developed a mobile
app for ‘Barfi’ which was used to create a strong connect
between the protagonist and the audience.
“
Cinema is going from India to Bharat, all thanks
to digitization technology. Digital distribution
has provided depth to the industry and made
it possible to take cinema to the hinterland.
We expect this trend to bring back INR 30 to 40
billion back from piracy to the system.
“
- Kapil Agarwal
Joint Managing Director,
UFO Moviez India Ltd.
In 2012, the average film marketing costs ranged anywhere
between INR 80-120 million 4 . For high budget films, this
went up to INR 150 million and for low budget films, in
some cases, it exceeded their production cost. As per
industry estimates, for a low budget film, a minimum
budget of INR 35 to 50 million 4 is required to ensure a
decent commercial release for the film. However, the
economics are different in South India where marketing
budgets are still low at INR 15 – 20 million per film 4 .It is
anticipated that as media clutter grows, marketing budgets
for films will continue to climb in order for products to get
noticed.
03. Hitting the High Notes, FICCI-KPMG Indian Media and Entertainment Industry Report 2011
04. Industry discussions conducted by KPMG in India
05. ‘IIM-A cracks box office code to predict a film’s future’, Times of India, October 2012
06. ‘Star Movies India Goes All Social For ‘The Avengers’ Premiere’, Lighthouseinsights.in, January
2013
“
In film marketing the battle for eyeballs can be
won or lost in the first 2 weeks of the campaign.
First impressions are critical in our industry, so
once our research on pre-campaign audience
awareness is done, we ensure that our first
creative (trailer and posters) has very high on
appeal and reach amongst our target audience.
Once a good base is created then further
marketing interventions in the 6-8 week period
prior to the film’s release, become that much
more effective in achieving box office revenue
targets.
“
- Shikha Kapur
Executive Director - Marketing,
Studios, Disney UTV
The distribution of Hollywood content is also evolving
rapidly. While most big-budget English movies are
distributed by the respective studios, several other films
require local distributors. For example, PVR Pictures
has identified this area as a potential opportunity and
distributed 18 Hollywood titles last year. It also plans to
distribute another 24 titles in next 15 months. In order to
compete with domestic titles, Hollywood continues upping
marketing budgets, some Hollywood films are now being
marketed at spends as high as INR 50 million 4 . For instance,
Avengers which was released in 1000 prints across English,
Hindi and South Indian languages was marketed at pan
India level. Star Movies India did a 360-degree marketing
campaign comprising all mediums – print, online, OOH
and television, to promote the action movie in India. The
Star Movies Facebook page also offered an Avengers app
featuring wallpapers, videos and puzzles related to the
superheroes 6 .
“
We have seen that superlative content, backed
by innovative marketing, wide distribution and
high C&S valuations have been the growth
driver for the business. We have seen a lot
of high concept content movies deliver good
numbers at the box office and the risks taken
by producers have paid off thus paving the
way for the need for more such content. The
increase in the number of multiplexes and
increased digitisation of 2K screens and
E-Cinema has helped us ensure cost effective
reach and better show casing opportunities. 3D
movies have also helped bring back audiences
into the theatre especially for Hollywood and
we will see a spurt in the number of 3D movies
in Bollywood as well.
“
- Vijay Singh
CEO,
Fox Star Studios
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