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IS ENTERTAINMENT INDUSTRY

THE NEXT ‘BOOM’?

A STUDY ON
HOW TO PROVIDE A COMPETITIVE EDGE
TO INVESTORS THROUGH MARKETING &
BRAND POSITIONING IN THE INDUSTRY OF
ENTERTAINMENT

Submitted to:
Name of the Guide
(Department)

Submitted by:
Name of the
Candidate
Enrollment No.
Session Years
NAME OF THE INSTITUTE &

UNIVERSITY

Acknowledgement
The present work is an effort to throw some light on “A Study
on how to Provide a Competitive Edge to Investors
Through Marketing & Brand Positioning In The Industry
Of Entertainment”. The work would not have been possible
to come to the present shape without the able guidance,
supervision and help to me by number of people.

With deep sense of gratitude I acknowledged the


encouragement and guidance received by my organizational
guide xxxxxx (Professor) and other staff.

I convey my heartful affection to all those people who


helped and supported me during the course, for completion
of my Project Report.

Name of the Candidate


Enrollment No.
Session Years

2
Many of life’s failures are
people
Who did not realize how

close they were to


Success”

3
PREFACE

Marketing is the most dynamic and challenging function of modern

business. In the ultimate analysis it is marketing, which determines

a firm’s success and ability to prosper in a tough competitive

environment.

With the integration of the global economy, rapid pace of

technological developments, media revolution intensified

competition, discriminating customer markets and massive changes

in distribution, business enterprise in India have started realizing

the significance of entertainment industry. Corporate success is

today synonymous with Product Placement.

With the liberalization of the economy privatization and entry of

MNC’s, the Indian business firms have become conscious about their

brand placement.

The focus is on the complex and dynamic nature of marketing with

emphasis on creative problem solving for brands.

Many business firms, their top executives and marketing managers

gave their valuable time and materials for preparing my thesis.

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TABLE OF CONTENTS

CHAPTER- 1 SYNOPSIS

ENTERTAINMENT INDUSTRY

1) NTRODUCTION:
i) RESEARCH MODEL
ii) TELEVISION SHOWS:

2) BRAND LOYALTY VERSUS PERCEIVED VALUE LOYALTY:


i) Jassi Jaissi Koi Nahin…

3) MOVIE MANIA
i) "Film Industry"
ii) 'Hollywood'
iii) An Overview:

4) MARKET HIGHLIGHTS & BEST PROSPECTS


i) Market Profile
ii) Statistical Data in USD Millions
iii) Best Sales Prospect
iv) B. COMPETITIVE ANALYSIS
v) U.S. Market Position:
vi) C. END-USER ANALYSIS:
vii) D. MARKET ACCESS
viii)Import Climate

5
5) Distribution/Business practices
i) BRAND WARFARE
ii) Venture capital:
iii) Overseas experience:
iv) Main Study:

6) FINDINGS OF THE CONCLUSIVE RESEARCH


i) Koi Mil Gava
ii) Baghban
iii) Hum Turn
iv) Average Recall

7) Percentage of Respondents remembering atleast one Brand


Name
i) STATISTICAL ANALYSIS
ii) CALCULATIONS:

8) CONCLUSIONS OF THE RESEARCH

9) ANNEXURES’

10)QUESTIONNAIRE

6
SYNOPSIS

Introduction:

Every generation has its own buzzword or in fact, sometimes a

couple of them. The 21st century is no such exemption that is

ubiquitously filled with the buzzword of ‘entertainment’ in every

context. This particular term has given a different sight or an angle

to the industry. Every event, function, market, product or any

business proposition is somewhere or the other related or getting

close to the industry of entertainment.

Media and entertainment industry is arguably going through a fast

growth phase; it is a golden opportunity for the various brands to

latch on to the chance to take the charge of positioning their brand

in the right way. Understanding the mindset and motivations of this

emerging section “The New Age Indian Consumer” is the key to

success. The amateur film market has seen an encouraging growth

of about 10% in the recent times.

7
Definition:

Creating and implementing advertising and promotional efforts

designed to make a film stand out in a competitive market

environment, film marketing typically uses the same methods.

Movie marketing could take months of planning and organizing and

its success can make or break a film. Movie marketing can be costly

and usually considered in the whole cost of the movie.

Topic Of the Study:

Market Potential of entertainment industry for various consumer

products.

Objective of Study:

The primary objective of this thesis is to exhibit the market potential

for the investors through extensive marketing and brand positioning

in the entertainment industry. It could also be referred as publicity

and various image-building actions.

Other objects are as follows:

 To analyze and examine all aspects of film marketing.

 To do an intensive research about the entertainment spending

habits of the new age Indian consumer with special reference to

cinema viewing.

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 Also to identify countries providing the incentives for the

production.

Commercial Viability:

This study would give some crucial guidelines to corporate houses

and the film fraternity that would help them in business decisions.

How can the film fraternity use these findings to market their films

more effectively? How can the corporate get maximum visibilities in

the mass media?

I would try and answer these questions to add value to anyone who

reads the thesis.

Here I list down few possible groups that can gain help out of this

report:

• Current players in the entertainment industry

• Potential entrants in this industry

• Global brands looking towards identification in the Indian

market.

9
Methodology:

I believe that no one source of information would suffice to support

the findings and recommendations. Thus, a combination of primary

and secondary sources would serve the purpose. At some stages of

research and analysis, the justification of sources might face the

secrecy code through the company, in such a case the data would

be supported by the summary of the depth interview or a tentative

questionnaire report.

10
A. Primary Research:

The following sources have been identified to provide primary

information regarding the existing business dynamics.

 Discussion Guidelines/ Questionnaire’s

 Depth Interviews

 Industry Experts

 Industry specific consultants

B. Secondary Research:

This is required before I can proceed and conduct the market

research. There are various sources of secondary data

available, viz.

 Magazines

 Newspapers

 The Internet

 Industry reports of private firms

 White Papers & Fact sheets.

11
INTRODUCTION:

Every generation has its own buzzword or in fact, sometimes a

couple of them. The 21st century is no such exemption that is

ubiquitously filled with the buzzword of ‘entertainment’ in every

context. Every event, function, market, product or any business

proposition is somewhere or the other related or getting close to the

industry of entertainment. This particular term (entertainment) has

given a different sight or an angle to the industry but leaves one

question completely unanswered i.e. Are there any guts to think

beyond advertising?

The latest trend in advertising is to make it, well, less advertorial.

The tendency is to move away from in-your-face ads, where the

product is the star, to mini movies or quasi-documentary vignettes

that feature “real life scenarios” with the product(s) hovering in the

background. Some would argue it’s a sort of “art imitating life”

scenario- - where ads imitating the practice of product placement.

Have you ever watched a T.V. show or movie and felt like you were

watching a really long commercial? If so, then you have been the

12
victim of bad product placement. There is a very thin line between

being visible and overly visible or you can say overly exposed. When

done correctly product placement can add a sense of realism to a

movie or a television show.

Product Placement is the process that integrates that integrates

an advertiser’s product into T.V shows and movies for clear on

screen visibility. It is the part of rapidly expanding entertainment

industry reaching millions of people through movies, television and

videos.

Brands and popular Indian cinema have aligned quiet famously, and

the trend of in-film advertising is gaining ground as producers and

advertisers see long-term benefits. Now, advertising agencies also

see film advertising as a big revenue-earner and a way to build big

brands.

Media and entertainment industry is arguably going through a fast

growth phase; it is a golden opportunity for the various brands to

latch on to the chance to take the charge of positioning their brand

in the right way. Understanding the mindset and motivations of this

emerging section “The New Age Indian Consumer” is the key to

success. The amateur film market has seen an encouraging growth

13
of about 10% in the recent times and is looking far more promising

and lucrative, than expected. It just depends on the new age

marketers to position their brands competently and nattily. The new

generation is no such an exception, but its different and very much

alert about the happenings around.

Positioning of the brand would exorbitantly depend upon the

purchasing power and entertainment spending habits of the

consumer as well.

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RESEARCH MODEL

The particular research model focuses on the two main aspects of

entertainment industry, i.e. Television Soaps and Movies. The chart

below would give a better understanding: -

PRODUCT

T.V. MOVIES
SHOWS

- Soaps, Endors

Game ements

Shows

- Ad -

Commerc Bollyw

ials ood

- -

Celebrity Hollyw

ood

15
- Endo

Celebrity rsements

16
TELEVISION SHOWS:

In recent times the winds of

change seen in Indian market

place in recent

times have

brought a clear

shift in consumer

behaviour. The basic

misconceptions of everlasting

loyalty of consumers

that the product and service

marketer have enjoyed have

finally ended. However the Indian

market has completely

transformed and consumers are

now loyal to ‘perceived value’ and

not necessarily to brand.

BRAND LOYALTY VERSUS


PERCEIVED VALUE
LOYALTY:

17
Consumers are more loyal to

‘perceived value’ than to ‘brands’.

If a product without fail delivers

‘perceived value’ over a phase of

years, it may arrive at brand

loyalty. But this cannot happen

before Perceived Value Loyalty.

Perceived Value Loyalty is,

therefore, more important index

in today’s context.

There are six reasons why

consumers make decisions in the

branded sector based on

‘perceived value’ and not just

price. In fact ‘perceived value’

wars work in brands for the

reason that they are fought for

the mind and heart of consumers.

Price wars do not work in the

branded division because they are

fought mainly in the short-term

trade and pocket level.

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It's been a through thing in the

west but, as with quite a few

other innovations in the media,

Indian television is just about

waking up to the thought of

plugging brands in small screen

programs in a big way. In the age

of clutter and meager recall, can a

brand name meet the expense to

hang around in the sidelines for

its twenty seconds of fame?

Advertising did try to hop out of

the well - there are instances to

sustain that - but is it showing?

If yes, where? If not, why? It

appears that, either the concept is

a non-starter or, possibly, it is

happening but away from the

media defiant stares. Then again,

there are layers underneath the

first coat. All the same, the core

rules of the game are pretty

19
simple - like they always are. In

television, as in films, brand

placement is a function of a very

fundamental question: What's the

big idea?

“Show me the money,


honey!”

‘It is always about the money and

big money is all about the big

idea. A big idea can command up

to 100 per cent premium over

regular ad rates applicable to

commercial breaks.’

Now, that it is fairly clear that the

perceived value loyalty has scored

over the brand loyalty, let us look

into the following case studies in

support of the above statement.

20
Case Studies:

 Brand

positioning

in the game

shows

 Jassi Jaisi

Koi Nahin!

 Indian Idol

The case studies discussed further

has become the educational

debate topics at maximum ‘B

schools’, mainly because of the

products placed in the

21
programmes, shows and the ads

aired during breaks are

anticipated of having maximum

brand recall among the

consumers.

GAME SHOWS

KBC KHULJA
SIM SIM

KBC: Kaun Banega

Crorepati:

Talking about KBC and talk not

talk about Mr. Subhash Chandra

would be injustice. Subhash

Chandra was an undisputed king

of T.V. till late nineties. He had a

deal with Star Network that

prohibited Rupert Murdoch’s

channel to telecast Hindi

programs. Star was free from

22
bondage in 2000 and created

television history that is still

unfolding. A laggard behind the

market leader and hugely

successful Sony, Star had become

a channel that housewives used to

watch only when they were

surfing channels out of sheer

boredom.

Then came along Amitabh

Bachchan and Ekta Kapoor of

Balaji Telefilms catapulted Star

into unheard of success in

cluttered market. From out of the

blue, Peter Mukherjea and

Sammer Nair of Star unleashed a

double whammy on prime time

viewers that had been dominated

by Zee and Sony. At 9PM it was

Mr. Bachchan in a new avatar that

simply wowed India with a phrase

like ‘Lock kar diya jaye’ in KBC.

This was followed by what is now

23
known by saas-bahu paradigm

when ‘Kyunki saas bhi kabhi bahu

thi’ and ‘Kahani ghar ghar ki’

hooked viewers like never before.

Marketers also soon realized the

importance of the shows being

aired on different channels and

were able to place their brands

not during the commercial breaks,

but very much inside the show

where they could achieve 80% of

the targeted customers.

Well, all we can say that it was

just the start of another

beginning, a start of war among

the channels, a beginning of a

confrontation among the brands.

On conducting the conclusive

research with the different age

group consumers the brand recall

for the ICICI bank in KBC topped

the list among the other game

24
shows on television. Principally,

there are two factors in play that

decide how remunerative the

placement is - the involvement of

the brand in the TV show and the

ratings that the program

commands.

A brand that is actively talked

about or visually positioned by the

actors commands better rat Big

ideas seen on television in the

recent and not so recent past

have been the positioning of

ICICI bank in ‘KBC’. There

were cheques to be signed by

one bank or the other and

ICICI, perhaps, found the right

opportunity at the right time.

That's a big idea and as bright as

it gets. Besides ICICI, the brands

endorsed by the host of the game

show, our very own Mr. Amitabh

Bachchan are bombarded during

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the commercial break. Being high

on TRP ratings other brands

irrespective of celebrity

endorsements, pitch and shell out

high price to get the utmost

visibility.

Brand positioning may look like a

tempting pie in television but

there's more to the pie than

meets the eye.

In quick span of time, Star Plus

has gained immense popularity

and viewer ship among the

competitors. An in-program

placement definitely has

26
more exposure vis-à-vis the

commercial breaks where

audiences begin surfing. But the

concept has to be very carefully

built-in, in order to maintain the

dominance over the competitors.

If not done with in the norms, it

could just be an added liability,

e.g. ‘Khulja Sim Sim’, an

exceptional podium for brand

placement but bigger clients like

automobile maker were

disinclined to position their

products as rewards. They

preferred to stick to the

commercial breaks. The not-so-

regular advertising clients like Hi

Design were the ones that came

up with gift hampers and such.

27
Jassi Jaissi Koi

Nahin…!

The Indian television


fraternity has seen an
exponential rise ever
since satellite television
first came to India.

On consulting Nina Jaipuri -


Assistant VP, Marketing SET India
Private Limited

Today, though cable access is only

about 50 per cent (according to

various industry educated guess),

this category of people is defined

as the “consuming class” in India.

By 2002, the share of cable &

satellite television was 86.9 per

cent of total television advertising

as against a too little 31.3 per

cent in 1994. The count has

reached over 90 percent till date,

28
crediting the expansions of media

in recent past.

Hindi general entertainment

television is the energy for growth

in the television business with a

62.8 per cent share of total

viewership and an even higher

74.6 per cent share of total

advertising returns.

29
Sony Entertainment Television is a

key player in this space and has

been a constant and strong

number two behind Star Plus. The

other contenders are Zee TV,

Sahara TV and SAB TV. Star Plus

had established a clear dominance

over Sony Entertainment

Television. (Star Plus average

range of Television Ratings (TVRs)

approx 13.2 TVRs, as compared

to Sony Entertainment Television’s

1.3 TVRs). Besides, Sony

Entertainment Television was now

perceived as a “me-too” to Star

Plus.

Understanding Women:

Sony Entertainment Television

specially made research among

women, the chief target audience

for the channel. The research

“Understanding the woman”

30
conducted in seven cities across

India provided insights, which

helped define its

content/programming tactic,

which is, “To provide intelligent

and innovative entertainment to

its viewers”.

These women were looking for

something dissimilar from the

routine kitchen politics that

dominated television

programming. The challenge

therefore was to generate and sell

a different viewing alternative,

going past the clichéd family

dramas.

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The Marketing Challenge:

Traditionally, television advertising

has always been about huge, bold

poster advertising depicting

glossy lead actors shouting down

at you from billboards. In this

case, the protagonist “Jassi” was

less than ordinary to look at yet

was truly beautiful if you met her.

The challenge therefore was how

do we get viewers to sample the

show?

Marketing Strategy:

As in the old adage, we decided

that we will not give the viewer an

opportunity to judge a book by it’s

cover — therefore never show

Jassi in any pre- and post-launch

promotional material and activity

until we get a critical mass to

sample the show. Also keeping in

mind the Indian culture, a literal

32
translation of “ugly” was unlikely

to cut ice with the viewers. Hence

Betty was transformed into Jassi -

and her extraordinary qualities

were played up. Like Jassi, her

marketing was also unique.

The primary goal was to fuel

inquisitiveness about Jassi and

build endearment for her as a

personality, by giving the viewers

different facets of her qualities.

The desired response was, “I’ve

heard so much about her, now I

can’t wait to meet her.”

In addition Jassi merchandise was

now being made available - the

ring tone download being the first

in a series of items to be

launched.

Sony Entertainment Television

share of the 9.30 pm slot is up

from 8.2 per cent prior to the

33
launch to 32.4 per cent by

December, within three months of

launch, and still growing. Star

Plus is down from 81.8 per cent

share to 62.6 per cent share.

Along Came The Spider!

The advertiser response has been

so overwhelming driving slot rates

up by 50 per cent. The show

today has a full house of 12

sponsors as against the single one

when it launched. Every brand

wanted to get associated with

show and the artist. But, different

brands were selected matching

the script and situation in order to

avoid the clutter. Currently twenty

five percent cost of the show has

been earned from the

endorsements. To name few Satya

Paul, Maruti Udyog Ltd., Tanishq

Jewellery are some of the brands

34
associated with the show. Leaving

the brands, the film fraternity was

exorbitantly impressed, that the

ultimate king Mr. Yash Raj Films

promoted there film Hum-Tum on

the episodes of the programme. If

people can remember Saif Ali

Khan meeting Jassi in a well fitted

role of two episodes of the show.

Marketing a film on a show was

itself a trend-setting step as the

viewership shooted up

tremendously for the particular

episodes and the show was one of

the most talked about in daily

gossips.

Hence it was proved that brands

have certainly got an immense

scope, whether be it a product,

service or as a matter of fact a

movie too in an attempt to

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achieve maximum visibility in

today’s cutthroat competition.

36
Indian idol hits ad
revenues of Ekta
Kapoor shows:
Backed by sky-scraping TRPs

reality talent hunt show 'Indian

Idol,' aired on Sony Entertainment

Television succeeded in hitting ad

revenues of ‘saas bahu’ soaps

aired daily on Star Plus channel of

Star TV. The Rs 1,750-crore

advertising returns bazaar for

Hindi daily soaps has stooped by

about five percent in the last few

months.

Apart from the grand finale, when

it was the second most watched

show on television after Star Plus'

Kyunkii Saas Bhi Kabhi Bahu Thi,

the programme has been has

been consistently achieving high

TRPs since the first show was

telecast.

37
Indian Idol garnered the

maximum viewers in Mumbai,

Delhi, Kolkata, Gujarat, Punjab,

Maharashtra, Madhya Pradesh,

Uttar Pradesh and West Bengal.

Figures revealed by V.P. Marketing

on Sony said, that 53 per cent of

the total TV audience in North,

West and East India watched the

final episode of Indian Idol. The

show saw a consistent rise in the

ratings and viewership, resulting

in raining sponsors for Sony

Entertainment.

38
With the success of Indian Idol,

market analyst say daily soaps

may be losing their esteem as

viewer fatigue has set in. The

broad invention categories that

are advertised in daily soaps are

FMCG, banking, automobiles, food

& beverage, telecom and lifestyle.

It was said to be the highest

viewership time at the time of

Indian idol and the bidding for the

spot went in crores for the

marketer’s

On the day of the finale of the

Indian Idol programme TRPs of

other entertainment also took a

hit. The channels that lost the

maximum viewers were

entertainment channels (Star

Plus) movie channels (Star Gold,

Zee Cinema) and news channels

(Aaj Tak, Star News, Zee News).

39
Now it remains to be seen if Sony

can sustain these TRPs with the

second coming of the Indian Idol.

Zee TV has number 2 position in

prime time band, with 5 out of 10

programmes. It is at number 1

position in 7.30 p.m. to 9.30 p.m.

band and has a very strong

presence in 8.30 p.m. to 9.30

p.m. band. Overall, during 8.00

-9.00 p.m. slot, Zee TV is at

number 1 position, followed by

Star and Sony at Number 2 and 3

respectively.

40
The network share of the

various channels is as under

27%Network 2004
Zee 19%

Share Sony 23%


Star
DD 22%
(Source:

Sony Television)

Market share details

Channel Market

Share

Zee Cinema 62%

Zee News 33%

Zee Music 11%

Star 24%

SET 21%
(Source:

Sony Television)

REVENUES

Revenue Break Up 2003 2004

Advertising 74% 78%

Subscription 21% 20%

41
Others (mainly 5% 2%

Education)

Total 100% 100%

(Source: Sony Television)

Advertising revenue continues to be

main source of income for network,

which earned Rs. 722 crore in FY

2004 (Rs. 642 crore in FY 2003).

Though competitive environment had

impact on viewership of network,

advertising revenue demonstrated

positive growth of 24%.

Though the companies has increased

advertising rate in prime band slot.

But, still it is getting more

advertisements mainly due to higher

reach and viewership has constantly

increased the sales of the products.

The credit cannot be taken away

from the marketers for placing their

42
product or brand at the right time

and spot efficiently and consistently.

TELEVISION SCENARIO

IN A NUTSHELL:

It is clear from the above

discussion and analysis that small

screen viewership and exposure

has not only opened the doors for

the marketers to showcase their

brands but also given them a fair

chance to get noticed and hit the

consumers with heavy impact of

brand reconciliation time and

again. Placement of brand still

remains the top priority in order

to have an effect of recall on

consumers, in order to match the

fierce competitors in the market.

On interacting with different

marketers, it was noted that more

than selection of a show or a soap

43
consumers are more perceived by

the characters endorsing the

particular brand. Taking character

Tulsi (Smriti Irani) of soap Kyunki

saas bhi kabhi bahu thi, since the

time the actor has endorsed the

brand not only it has increased

the brand recall, but also has

become a household product,

simply because of the positive

influence of the character on the

viewers of the No. 1 show on star

plus.

This indicates the importance of,

first the popularity of the show for

the purpose of getting the

particular brand noticed, second

convincing the consumers about

the credibility of the brand by

their favourite star on television.

This is just one example for

understanding, but as we know

44
the commercial breaks are loaded

with stars, sports icons,

celebrities etc. at times making

the whole area of advertising

confusing and difficult for the

customers to make an ultimate

choice. Hence it makes it all the

more important for the brand

facilitators to place name by

analyzing all the prospects of the

show.

Taking the international

perspective of the Television

industry the concept entirely

differs from the Indian market,

from programmes to star to

revenues. The concept of

perception of the consumers also

varies, and it’s nothing to do with

the language. The key role is

played by the system of pay

channel that is incorporated in

45
West. All the viewers have to pay

a stipulated fee for watching a

particular show on a channel,

whereas there is no such fee or if

there is, its just a nominal fare

paid to the cable operators. This

makes a huge difference on the

viewership on both parts of the

world.

For instance a show like ‘Friends’

that carried on for years in the

west, had no takers, no sponsors

or brand promoters in the

programme. Considering the

same situation or same kind of

show in India the show would

have been loaded with brands

from the attire of the characters

to the each and every accessory

or products used in the serial. The

basic difference comes in the

probability and risk, which

46
promoters would have faced in

West and in India, as the

probability of seeing the show in

West is phenomenally low in

comparison to India or as a

matter of fact in Asia. Therefore,

as the market differs the

promotional strategy

automatically gets an alteration.

Similarly, there is a huge

difference when we take the film

industry as the area for promoting

the brand or a product, which is

discussed in detail in the project.

47
48
The film industry is one of the

most competitive industries in the

world, ruled by public opinion and

susceptible to popular whim.

Whether it be Hollywood or be it

Bollywood, entertainment remains

the fuel for driving any industry.

Today both world cinema have

come a very long way, and has

improved as each day has passed

by.

Harry Davis opened the first

nickelodeon, a small storefront

theater or dance hall converted to

view films, in Pittsburgh in June of

1905, showing The great train

robbery. Urban, foreign-born,

working-class, immigrant

audiences loved the cheap form of

entertainment and were the

49
predominant cinemagoers. One-

reel shorts, silent films,

melodramas, comedies, or novelty

pieces were usually accompanied

with piano playing, sing-along

songs, illustrated lectures, other

kinds of 'magic lantern' slide

shows, skits, penny arcades, or

vaudeville-type acts. Standing-

room only shows lasted between

ten minutes and an hour. The

demand for more and more films

increased the volume of films

being produced and raised profits

for their producers.

An Overview:

Knowing the age of the industry,

it has certainly come a very long

way since 1930. With 21st century

initiating innumerable brand new

50
innovations all round the globe,

film fraternity has also moved into

the new and hi-tech world of

cinema with hi-fi technology.

Talking about anything relating to

business, West has always been

ahead from Asia or as a matter of

fact been a world leader.

Movies are also no exception in

this case, it has been extremely

superior and quick in its growth

and expansion. It has always

been a complete entertainment

for the audiences and the number

has always increased with time.

The film production has always

been one of the most bloodthirsty

industries in the humankind, ruled

by community outlook and

vulnerable to popular whim. The

idiosyncratic style of American

films repeatedly ranks ahead of

European productions, which

51
often are deficient in the panache

of their American counterparts.

Despite some critics claiming that

American films have

oversimplified plots aimed at the

mass indiscriminating audience,

American films have a proven

worldwide petition.

The European film market is

comparable in size to that of the

U.S. domestic market. The

number of films produced in most

European countries is now

climbing and an increase in

demand benefits the U.S. film

industry.

For the past ten years, the film

industry in France has established

itself as the largest, most

successful film market in Europe,

with France as the leading film

producer (134 films were

52
produced in 1996, up from 124 in

1995).

France is also Europe's largest

film-viewer market with a total of

4,419 movie theaters. In 1997,

total sales amounted to nearly

USD 800 million. French films

represented 37.5 percent of all

revenues, up 11 percent from the

previous year. U.S. films were

seen by 70.3 million people,

representing a steady market

share at 52 percent. 51 million

people viewed French films.

53
MARKET HIGHLIGHTS &
BEST PROSPECTS

* Market Profile

Despite severe unemployment

across Europe and recent

economic difficulties, the French

movie market continues to grow.

In 2000, box-office sales

increased, reaching USD 51.5

million as a result of 9.1 million

new movie admissions. The

French movie market is at its

strongest since 1987. This can be

in part accredited to the success

of huge American productions

such as "Independence Day," as

well as to increasingly profitable

French comedies. French market

information can easily be

accessed through the state-run

Centre Nationale de

Cinematographie (CNC)(source),

which monitors box office

receipts, assures distributors

54
accurate box office revenue, and

reports on market trends.

As is the case in the United

States, the French film industry

enjoys financial and infrastructure

support from other media. In

comparison to other European

countries, the French film industry

has greatly profited from its

relationship with video, cable,

pay-per-view and standard

television. In 1995, French

television networks (including the

pay-TV channel, Canal Plus)

showed well over 1000 feature

films. Since the late 80's,

television stations have become

an important source of financial

support for the French film

industry. In 1995 for example, 9

percent of total sales by Canal

Plus went to support the industry,

not including other significant

55
production projects financed by

the pay-channel's subsidiary,

Studio Canal Plus. In addition, the

four major national television

stations (TF1, France2, France3,

and M6) are required by law to

invest a minimum of 3 percent of

their total sales in the film

industry and to broadcast a

minimum of 60 percent European

films.

These stations spend over USD 70

million each year on purchasing

the rights to American films.

Despite strict regulations and

attempts to limit the number of

foreign films entering the French

film and television markets,

interest in satellite-TV is growing

and should offset these

detractors, sustaining high

demand for American films.

56
Following the lead of the United

States, France has seen

considerable development of

megacomplex theaters, huge

multi-screen entertainment

centers with more than 1500

seats and often housing cafes,

video games, bars and

restaurants, in addition to the

traditional movie theater set-up.

Since 1993, Gaumont, UGC and

Pathe have built approximately 30

megacomplexes here. This pan-

European trend, in part

responsible for a relatively recent

partial renaissance in movie

attendance, is expected to

continue in the future as these

megacomplexes have

considerable potential in the

French market.

As megacomplexes helped

redefine and reinvigorate French

57
moviegoers' behavior, so has the

renovation of older, existing

theaters over the last four years.

Many movie theaters in France

had become dilapidated, thereby

discouraging moviegoers. As a

result of renovation efforts and

the construction of

megacomplexes mainly

concentrated in urban areas, the

French film market has curbed a

decline in movie attendance and

regained some of its lost strength,

particularly in the European

context.

Paris proper is the highest-

grossing area in France for

American movies. Other urban

centers such as Lyon, Bordeaux

and Marseille show an interest in

American films, but follow Paris at

a distance.

58
In 1996, video publishers in

France grossed USD 616.7 million,

according to the Video Publishers

Association (SEV), representing

80 percent of all publishers.

Nearly two-thirds of SEV member

turnover came from direct video

sales, representing more than 90

percent of total turnover.

* Statistical Data in USD


Millions

Avg. Annua
2001 2002* 2003* Growth Rat
For following 2 years
Import Market 468.9 501 523 4%
Local Production 355.6 362 373 4%
Exports 70 72 74 4%
Total Market 754.5 791 823 4%
U.S. Imports 407 443 452 4%
Exchange Rate used: 6.0 6.1 6.5

59
* Estimates

Inflation Rate Assumed: 2.5%

Estimated 2001 Import Market


Shares: (in percent)

United States: 88.4


U.K. 3.6
Italy 3.1
Germany 2.4
Belgium 1.1
Others 1.4

Receptivity code (1-5): 5 Range:


5 (extremely receptive) to 1 (not
receptive)

The popularity of American films

is firmly rooted in French culture.

Market demand for U.S. films

promises to remain constant into

the next century.

* Best Sales Prospect

American action films, animated

films, and adventures continue to

60
be the three most popular genres

among French moviegoers. Large

budget American action movies

such as "Independence Day" have

traditionally been very successful

in the French market. The biggest

film successes in the U.S. are also

moneymakers in France. Having

followed, national ratings of U.S.

movies, usually through the

media, French moviegoers are

often already aware of American

films before their release in

France.

Co-productions with French

partners can be an effective

method for U.S. companies to

increase their market share.

Employing this method would be

particularly suitable for

independent producers who do

not have the resources to carry

out the necessary marketing

61
campaign needed to attract a

French audience. In addition, co-

productions can be used to evade

French claims regarding American

domination of the European film

market. The CNC officially

considers co-productions to be

French films. It must be noted,

however, that co-productions, in

any country, are often logistically

difficult.

The French market for American

independent films is meagerly

developed. Distribution and

marketing efforts of major U.S.

film companies have created

barriers for lower budget

independent American film

producers.

In addition to the significant

financial resources needed to

enter this market, French

62
moviegoers sometimes view U.S.

films as being too "action-based"

and as "lacking dialogue." Despite

these obstacles, independent U.S.

films may be able to tap into a

relatively unexploited art cinema

market, primarily in and around

Paris and in other important urban

centers in Southern France, such

as Marseille and Lyon.

Particularly in Paris, theaters are

the beneficiaries of government

and municipal subsidies designed

to preserve and revive the French

film industry, thereby providing a

good environment for

independent films.

U.S. companies have been able to

establish themselves firmly in the

French video publishing sector,

valued at approximately USD 700

63
million. American video publishers

are expected to continue to

dominate this market as the next

century draws near. U.S. video

companies should be particularly

aware of high market demand for

special-interest videos, which

represent a significant turnover in

France.

The rental video market, however,

has showed only modest gains

over the last 8 years and remains

underdeveloped. France offers an

untapped market for U.S.

companies in the rental video

sector. Companies such as

Blockbuster Video and Hollywood

Video have been able to penetrate

other European markets, but have

seen little success in France.

Despite regulations governing

franchising and store

management, U.S. video

64
companies should consider

entering and developing the

French video rental market.

B. COMPETITIVE ANALYSIS

* Domestic Production

French movie market flourished

with more than 51 million

admissions and proved to be a

record year. With the success of

films like "Pedale Douce", "Le

Jaguar", "Les Trois Freres" and

"Le Bonheur est dans le Pre.” the

French movie industry enjoyed a

market share of 39.5 percent.

This represents a slight increase

from previous years, but does not

signify a reduction in U.S. market

share or dominance.

French film production remained

at a high level with 134 films on

65
an investment base of USD 550

million, a slight drop from 1995.

French investment stayed

relatively stable, whereas foreign

investment declined by 19.1

percent. Of the 134 films

produced in 78 percent were

French-initiative films, totally or

principally French-financed

productions.

On the other hand, French co-

production films represent a

marginal 15.5 percent of box-

office receipts. Co-productions

have continued to increase over

the last 15 years, but have not

fared as well as single-country

financing projects. Co-productions

have typically been plagued by

prohibitively high costs and

logistical complications arising

from the unsuccessful

66
management of the inherent

cultural and legal difficulties.

* 3rd Country Imports

Third country imports constitute a

negligible portion of the French

film market. British, Italian and

German films figure most

predominantly in this market with

a 9.1 percent market share,

generating USD 1.3 million from

admissions.

U.S. Market Position:

The U.S. film industry plays the

most dominant role in the French

market. U.S. films represented

54.3 percent of all box-office

admissions. A fiscal and financial

67
environment conducive to rapid

and effective film production,

technological superiority, strong

domestic demand and an

established and efficient

production network buttress U.S.

market dominance.

U.S. films have consistently held

about 55 percent of French

market. This trend promises to

continue into the next century.

On average, Americans watch 4.7

films per capita in a movie theater

each year, compared to 2.2 films

per capita in France. In addition

to heavy demand in terms of box-

office admissions, the U.S. film

industry benefits from well-

developed home video, pay-per-

view and cable TV markets.

C. END-USER ANALYSIS:

68
France's 2,139 movie theaters

(4,519 screens and 952,137

seats) showed a 5 percent gain in

admissions reaching 136.24

million. While Paris is home to

less than 4 percent (2.2 million)

of the French population (58.5

million), the city attracted

approximately 20 percent of

French moviegoers, with 26.2

million admissions. Other urban

centers with more than 100,000

inhabitants, university towns and

the Southeast of France also

enjoyed high movie attendance

rates. Cities with more than

100,000 inhabitants represent 11

percent of France's population.

Admissions to French movie

theaters can be divided into three

main time periods, but remain

relatively high from October

through April. The months of

69
October-December generally see

the highest admission rates, with

an average of 14 million tickets

sold per month. During the

summer (June through

September), movie attendance

drops to only 8.5 million

admissions.

Moviegoers can be divided into

two categories: regular and

occasional moviegoers. Regular

moviegoers see at least one

movie per week, whereas

occasional moviegoers generally

see no more than one per month.

Regular moviegoers represented

only 33.6 percent of audience

market share, but accounted for

73.1 percent of all movie

admissions in France.

Eighty five percent of moviegoers

are aged 6-24, representing 26

70
percent of the French population.

But accounting for 40 percent of

movie admissions. The 20-24-age

group accounts for more than 18

percent of admissions but only 7

percent of the population. The 25-

50 age group constitutes nearly

40 percent of France's population

and also represents 40 percent of

attendance.

Education plays a significant role

in the behavior of the average

French moviegoer. In 2002, 80

percent of all moviegoers had

some form of higher education

and saw an average of 7.5 movies

per year, compared to a 4.6

national average. Conversely, only

40 percent of agricultural and

blue-collar workers go to the

movies each year in France.

71
D. MARKET ACCESS

* Import Climate

Industry experts predict that

public demand for American films

will continue to grow despite

significant French market barriers.

The general sentiment within the

French government appears set

against the massive influx of

foreign films, mainly American. As

a defensive measure, the

government has created special

funds to finance production of

French movies and television

films.

The 1989 EU Broadcast Directive

requiring a "majority proportion"

of TV programming to be of

European origin was incorporated

into French legislation in 1992.

72
France, however, specifies a

percentage of European

programming (60 percent) and

French programming (40

percent). These broadcast quotas

were less stringent than France's

previous quota provisions, which

required that 60 percent of all

broadcasts be of EU origin and

that 50 percent be originally

produced in France. The 60

percent European/40 percent

French television quotas are

applicable throughout the day, as

well as during prime times slots.

The prime time rules go beyond

the requirements of the EU

Broadcast Directive and limit

access of U.S. programs to the

French market. Nevertheless, the

market share of U.S. films

remains high. Major industry

players in France emphasize that

73
the development of the business

side of films & videos will do more

to revive the industry than any

system of quotas.

* Distribution/Business

practices

The top ten distribution

companies in France accounted

for nearly 89 percent of

distribution revenues, with

Gaumont Buena Vista claiming

first place at 19.8 percent. All of

the major U.S. film companies

have offices in France, often

staffed with distributors

responsible for negotiating with

French movie theaters. The

distributor must take care of

production, marketing and actual

distribution. Distributors have first

74
claim to box-office receipts, which

can be as high as 39 percent.

* Financing

In France, the CNC (Centre

National de la Cinematographie) is

responsible for allocation of

government subsidies to the film

and television industries, as well

as for coordinating grants from

the Ministry of Culture.

There is generally a two or three-

week lapse between the time

accounts are rendered at each

movie theater and payment is

made to the distributor. The U.S.

Export-Import Bank offers a

credit-plan through the Foreign

Credit Insurance Association,

which allows foreign buyers to

75
delay payment and pay off the

original investment.

When multiple tie-ins


translate into film clutter,
marketers seek other ways to
lash themselves to the
product.

Cross promotions have become a

staple in movies, particularly in

summer blockbusters, but no one

has devised a system to

determine what, if any, return on

investment they provide.

76
Marketers recently have learned

what doesn't work, though, so

they are rethinking their

strategies when partnering with

films.

"When you get it right and match

up a film property that has

current cultural significance with a

product that has brand equities

that relate to that property, as a

general matter, you get increased

presence in stores and see

increased volume," says Frank

Cooper, V.P. promotions,

interactive and entertainment

marketing at PepsiCo Inc. "You

can see by the sheer number of

films we've associated with that,

for us, it works."

77
When co-branded film promotions

are executed well, everyday

products can take on a hip aura.

Packaged-goods companies create

exciting retail presences that can

drive up sales, and other types of

companies like car manufacturers

are able to track sales increases

to their movie tie-ins. Realizing

this, advertisers generally are

willing to spend tens of millions of

dollars on movie tie-ins,

multiplying their own

expenditures many times over by

riding the media wave created by

studios that often are spending

upward of $50 million on their

own marketing campaigns.

But success is a hit-or-miss affair

-- some tie-ins go over

enormously well, while others

78
disappear into the ether -- and

recently, marketers have devised

their own benchmark for success.

Marketers say that while a

minimum of three promotional

partners is needed to turn a film

opening into a big event, anything

over 10 partners is excessive.

Tom Meyer, president of

entertainment marketing firm

Davie-Brown, says three to five

partners on a tent pole film are

ideal.

"Over the last five years, the

studios have gotten greedy and

brought on many partners,"

Meyer notes. "It becomes hard for

them to manage and overkill in

the marketplace. Studios should

be looking at these opportunities

as a way to go deeper in their

relationship with a brand, rather

79
than go broader with a whole

bunch of brands."

The Coca-Cola Co. recently has

scaled back the numbers of its

film promotions to ensure

promotional dollars are not

getting lost. "It needs to link to

the dead center of what our brand

positioning is; if it doesn't, we're

not going to do it.

A souped-up Wrangler Rubicon

also co-starred with Angelina Jolie

in 2003's "Lara Croft Tomb

Raider: The Cradle of Life." After

the film's release, the automaker

saw a 15% increase in sales. It

was done because it helps the

Jeep brand build pride by being a

natural part of popular culture,"

80
Packaged goods, however, often

are difficult to incorporate into

story lines. So, despite the

current frenzy over brand

integration, marketers look for

other ways to connect. Darth

Vader won't be seen chomping

candy onscreen, but M&M's has a

tie-in with "Revenge of the Sith,"

daring consumers to go to the

Dark Side with the first-ever dark-

chocolate M&M's and creating a

parallel universe of animated and

toy M&M's dressed up as

characters from all six "Star Wars"

films.

"Our goal is an integrated

consumer experience, and that

doesn't necessarily have to come

with product placement.

Coca-Cola and Pepsi also are

focusing on making their

81
connections outside a film by

creating promotions that tap into

the essence of the movie and its

characters, though Coca-Cola

says it pushes for integration

whenever possible. The company

adds that it has made it clear to

the studios that it won't do a

movie tie-in if a competitor is

featured in the film.

But while brands such as Coca-

Cola and Pepsi are becoming

more demanding and selective in

their movie tie-ins, one thing is

certain: Film promotions remain a

popular and effective marketing

tactic, even when an advertiser

fails to win a much-coveted role in

the movie.

82
Language barriers: Is only one

hurdle in selling foreign films

to American audiences

The strategy was simple: Screen

the picture at three major film

festivals, target younger

audiences with a zest for life as

well as older audiences with a

nostalgia for it, and buy spots on

Latino television.

Those were some of the principles

Focus Features put into play after

acquiring domestic rights to "The

Motorcycle Diaries" at last year's

Sundance Film Festival. They

worked: "Diaries" hauled in $16.8

million at the domestic box-office,

83
the second-largest Spanish-

language takes in U.S. history.

Releasing foreign-language films

is a risky business, especially in

North America where they usually

account for only about 1% of

theatrical business. Marketing

such pictures requires precise and

particular skills, but Focus

marketing president David Brooks

understands that a crossover

market for such pictures is likely

growing.

"There are certain special movies

that will cross over into a wider

audience," he says.

"For the foreign-language

audience, you have to use your

old-fashioned traditional mediums

such as (major newspapers) and

84
then you have to look at (local)

cable.

"Targeted" usually means limited

to the biggest cities, where a run

of 50 commercials on a carrier

like Time Warner Cable can cost

$30,000-$50,000.

85
An Overview:

The Indian film industry is turning

more optimistic. It is looking at

touching new horizons and scale

new heights. Most players are

aiming at widening their

operations and straddling across

the entire value chain.

For veteran filmmaker Yash

Chopra, it could mean making

more films in a year. For Subhash

Ghai's Mukta Arts, it could mean

setting up an integrated studio

complex-cum-training center,

upgrading its studio Adeus,

implementing its portal and web

casting plans and setting up

overseas distribution networks.

86
All these grandiose plans require

money and muscle. Where does

the moolah come from? Had it

been the old studio system,

finance would not have been a

problem. Internal generation

would have sufficed. With

production, distribution and

exhibition under one umbrella, the

system allowed ploughing back of

money generated by the captive

distribution units into production

and related activities.

However, in the new film industry

economy that emerged after the

collapse of the studio system,

such funding failed to work to

perfection. So, the inevitable

happened. Financiers, who

understood the dynamics of the

industry, sprang up in scores. And

they charged a premium for that.

Says noted film maker Mahesh

87
Bhat: "The Sindhi and Marwari

financiers had a field day because

they had the ability to understand

and negotiate the chaos of the

industry, which the guys wearing

ties in the bank could not."

Therein lies an irony. Such

financing has worked quite well

despite the usurious interest rates

of the lenders. Says R Ravimohan,

managing director of the Mumbai-

based Credit Rating and

Information Services of India

(Crisil): "People have paid such a

price and have still survived

because the speculative nature of

the business needed such people

who could put up capital up-

front."

All this is changing now. The

Indian film industry is biting the

bait of corporatisation and

88
attempting to professionalise

itself. Says Ravimohan of Crisil:

"Globalisation is one major trend

the Indian film industry has to

contend with today. It is both a

necessity and an opportunity."

To be sure, the Indian film

industry has responded by

beginning to corporatise itself.

There is greater recognition of the

need to corporatise to be able to

streamline operations and be an

entity everybody would like to do

business with, including the

financial institutions and capital

markets. Growing opportunities,

including overseas audience,

needs to be tapped. All these

imperatives are placing fresh

financial demands on Indian film

companies.

Financing options:

89
How to meet these financial

demands? The moolah has to

come from formal sources. The

informal channels of finance,

including the underworld, which

the industry has relied on ever

since the collapse of the old studio

system, would continue to be far

too expensive.

Technically, film and

entertainment companies have

now quite a few financing options

available to them: equity (selling

stock to financial and non-

financial institutions), debt,

venture capital funds and foreign

funds, among others.

Companies such as Mukta Arts

have already gone public with

initial public offering (IPO). "The

fact that these companies are

going public proves that there is a

90
certain section of the investing

public which is interested in

putting their money into these

ventures." But this interest might

wane.

A movie-making company is a

riskier proposition from a debt

perspective. There is a mismatch

here: a certain part of the

borrowed money has to be paid

back on a definite date, but

neither the quantum not the time

of the cash flow is certain.

Uncertainty reigns at various

levels, at the distributor's, at the

exhibitor's and everywhere.

A typical filmmaking company,

which is going from one project to

another, does not lend itself to the

traditional ways of trend analysis

or track record. There is an

91
element of uncertainty associated

with the success of a particular

project. There is no scientific

method of evaluating either the

quantum nor the timing of cash

flows." Yes, the project may be a

great success in terms of overall

cash flow it generates, but even

the promoter is in no position to

tell up-front what will his monthly

cash flow be.

The conventional financing

principles such as what exposures

to have and what debt-equity

ratios to have do not apply to film

companies. You need to develop

principles of financing film

companies.

Venture capital:

92
At the same time, studios outside

India have been able to raise debt

because they are corporations and

have steady cash flow streams

from projects, properties and

several other ventures. So, the

solution for the stand-alone

Indian film companies with stand-

alone projects (read films) lies in

diversifying their activities across

the value chain, having a base

cash flow and tangible assets, and

so on. If one goes by its offer

document, Mukta Arts is trying to

do exactly that. By raising equity

funds from public, it is trying to

boost its net worth and thus offer

a margin of safety to institutional

lenders.

Corporates such as Zee Telefilms

are better equipped to raise debt

if they are to get into film

93
production. "They have the equity,

the net worth, tangible assets,

advertisement support, the base

cash flow and the necessary width

of activities to cover the risk.

However, what needs to be looked

at is this: whether such steady

cash flows are adequate to cover

debt servicing. There might be

some doubts over project-related

debt, which is not dependent on

the overall cash flows.

Overseas experience:

How are films financed

elsewhere in the world?

Most large US entertainment

houses are part of huge

conglomerates that offer

everything from movies to theme

parks. Over there, traditional

94
entertainment companies are

increasingly investing in

expansion projects, in new

initiatives such as Internet-related

ventures and even in acquisitions.

Most of these activities are part of

publicly owned companies. These

companies have sold their stocks

to raise funds for expansion and

reducing their debt levels. Going

public has also allowed them to

cash in on their entrepreneurial

efforts and diversify their assets.

Direct financing apart, the Indian

film industry needs a national film

finance corporation whose equity

is jointly controlled by financial

institutions. Such a corporation

can go public and get itself listed

on the nation's bourses.

All said and done, new financing

options are bound to emerge for

95
the Indian film industry. But, first

of all corporatise and

professionalise the industry. That

is a small but sure step.

Main Study:

Till about the 1970’s most people

believed that the product

placement was unethical, but the

realities of advertising and movie

making has spurred Hollywood,

and now Bollywood into product

placement.

Bollywood isn’t far behind.

Industry sources have it that Mr.

Subhash Ghai made 20 percent of

the ‘Taal’ production budget just

from Coca-Cola.

96
Rumours also have that he shot

two sets of scenes, one with Pepsi

and the other with Coke, and

waved the carrot before both the

Cola giants.

But product placement in Indian

movies is much older than

Mr.Ghai. In An Evening in Paris,

Sharmila Tagore was seen sipping

delicately from a 200 ml bottle of

Coke, struggling to make sure the

logo was visible. You might

remember the Mafatlal hoarding

in the middle of a song in Maine

Pyar Kiya.

If you remember Awwal Number,

the Dev Anand flick starring Aamir

Khan- every time our hero hit a

four, the ball bounced off a poster

saying Garware! Coincidence?

97
In Prem Diwane, an entire

sequence with the then Ms Dixit

was shot inside the famous

Benzer stores of Bombay. A lot of

people unrelated to the story line

are shown carrying Benzer bags.

And a friend of mine swears

having seen a song sequence in

some movie, with the heroine

dancing round giant columns of -

guess what - Emami Naturally Fair

Fairness Cream!

In recent times, Mc Donalds India

has been quite active on the PP

front. In Love Ke Liye Kuch Bhi

Karega, Mr. Hero strategically

holds a ball with the Mac ‘M’ on it,

and just when you are about to

overlook the Mac connection, you

see all those girls in outfits that

look suspiciously like Mac

uniforms. Quite subtle. It wasn't

so under-stated in Kaho Na Pyar

98
Hai, when the oh-so-stranded

Hrithik Roshan flexes biceps etc

and asks irritably, “McDonald's ka

burger laaon kya?”

Another direct reference is in

LKLKBK. Our finicky heroine

declares she consumes

NOTHING but Domino's Pizza and

Diet Coke. Eh?

Products - brands actually - make

a movie more realistic. It is that

much more easier to bond with

the stranded actors when Hrithik

Roshan mentions McDonald’s

burger. Because that is probably

what we’d say ourselves! Like Dil

Chahta Hai, movies are getting as

close to real life as possible. It

would be unfair if we do not

expose the other darker - greener

- reasons. Producers need cold

cash. If they are going to get it by

99
featuring Snickers or Mafatlal

hoardings, they would.

You can’t blame the poor

producers! Money eternally being

in short supply, this is a great way

to finance the film, minus the

threatening phone calls

afterwards. And what do they

lose? Mr. Hero would have been

sipping some cold drink anyway -

would it hurt if it happened to be

coke? At 3.5 crore, quite the

contrary!

Recently, Naseeruddin Shah

admitted to TOI that he's shelved

most of his dream projects due to

lack of finance.

Film industry being as

unorganized as it is, genuine

above-the-board funding is hard

100
to come by, and product

placement is a golden opportunity.

Some tie-ups also help in

promoting the movie. The average

marketing budget for a Hollywood

flick is about $25 million. Most of

this is spent in the 3-4 weeks

before the release of the movie.

Tie-ups mean that the movie is

getting that shot in the marketing

arm that could probably make or

break the movie.

The marketers think that it's cost-

efficient. Pay once, and keep

reaping the benefits at every

show of the movie, or every time

the kids get together and rent a

CD, or the oldies celebrate their

anniversary with a video, or a

college movie club holds all-night

movie shows. It also reaches a

phenomenal number of people.

101
The North American movie

audience is about 1.42 billion.

Another factor the marketers

bank on is the powerful influence

of the medium. Movies have been

typically blamed for most sins of

society violence, sexual abuse,

drugs, smoking - you name it, we

have a politician who can link it to

the movies. If they are so

powerful that they galvanize an

entire generation into the angry-

young-man mode, then they can

surely sell a few cans of Stroh's?

(Remember the great Khan

talking at length about his plans

to start a factory - Strohs - in

DDLJ?)

By subtly weaving a product into

a scene, marketers hope,

audiences will connect their brand

with the glamorous stars or story

102
they're seeing on the screen. It’s

a commercial of sorts - without

the obvious hard sell of a

commercial. It might not sound

very nice - but quite obviously,

the aim is to catch the consumer

unawares, to sneak into her

memory in her moment of

vulnerability.

An in-film placement is a hugely

lucrative business and is raking in

anything between Rs 5 lakhs and

Rs 5 crore for film producers. A

film - viewer has a short attention

span. The best way to deliver the

message is to catch the viewer

off-guard when his rational

defence is down. Appealing to

viewers’ emotions is better than

appealing to their rational

thought. The rational gate

examines the advantages,

benefits and features, and seeks

103
value for money; the emotional

gate is all about trust, love,

identification and belief. Films

operate at the emotional level.

Placing a product in a film is

catching the viewer at an

emotional level when he can

connect with the brand.

There can be synergies between

brands and films. The successful

integration of product placement

within the film's storyline has

along history - the first example

being the yellow Rajdhoot bike

used in Raj Kapoor’s Bobby.

Hollywood also leveraged brands

such as BMW (Bond movies),

Jaguar, Ford, Ray Ban (Tom Cruise

in Risky Business and Mission

Impossible), Starbucks coffee,

AOL and AT &T.

104
Right now, companies are willing

to pay amounts ranging between

Rs 50 lakh and Rs 5 crore for

placing their brands in films, but it

depends on the budget of the

film. Big-budget films with big

stars can expect more. The size of

this advertising is expected to

grow nearly 100 per cent in the

next two to five years as more

and more companies get attracted

to this kind of advertising.

In the recently placed ad for

Castrol engine oil in film Chalte

Chalte, the makers of the engine

have reported tangibly increased

sales of the oil after the film's

release. The product seems to

have connected on an emotional

level with truck fleet drivers and

owners. Ray Ban also benefited by

its association with film Men in

Black.

105
However it is also true that ads

have to be carefully placed in a

film and one bad placement can

do more damage than 10 good

placements. Artistic integrity is

crucial for successful brand

placements and the operation has

to be woven into the script.

Sometimes, unreasonable clients

demand more footage although

research has shown that a two--

minute clip can effectively deliver

a message in a credible manner.

The placement should be woven

into the fabric of the film and

shouldn't be contrived and

unnatural.

The factors taken into

consideration during the

negotiation stage include cast and

credits, size of the projects and

the producers, timing of the

release, brand impact, and

106
number of screens during release

and post-release phase; and

possibilities of brand associations

through contests and promotions.

Depending on the content of the

film and its storyline, the agency

can sketch a profile of viewers

who would see the movie. Then

the agency approaches all those

brands that could appeal to the

targeted viewers. This is followed

by a 360-degree marketing plan

for cross-promotions during the

various stages of a film's release.

Objections if at all could come up

due to conflicts regarding a

certain star’s status as a brand

ambassador. For instance Shah

Rukh Khan could technically

object to being associated with

Coca Cola, as he is Pepsi's brand

ambassador. But Kaante was

associated with Thums Up and

107
Amitabh Bachchan is the brand

ambassador of Pepsi but there

was no conflict as Thums up was

associated with the entire film and

not one actor.

Does it work?

Well, now that's a tough question

to answer. Research shows that

98% of the total audience

remembers at least one brand

name after the movie. So Brand

recall is definitely there. But does

it actually boost sales?

There were a whole host of

branded toys featured in Toy

Story. One such toy company

Slinky, which had folded, was

back in business and sold $27

million after the movie release.

Sales of Red Stripe beer increased

by 53%, after Tom Cruise was

seen slugging it in The Firm.

108
Industry sources estimate that

BMW made $240 million in

advance sales alone, purely due

to the Golden eye placement.

Reese's Pieces – the Hershey’s

candy featured in ET - saw a

phenomenal sales growth of 66%.

But the same cannot be said for

every product. Primarily because

it hasn’t been researched well to

date. Unless marketing majors

analyze the sales figures purely

attributable to product placement,

there's no saying if this works.

There’s also, what we are going to

term the Pass-Pass trap (Have

you seen Yaadein? After seeing

that movie - no, product-array is

more like it - some have sworn

they would never touch Pass-Pass

again, even if it were the last

109
mouth-freshener left in the world,

and they were on their dream

date) - an extreme case of

product placement that actually

turns off the consumer.

The idea that one would go out

and buy a coke just because it is

the object de l’amour on screen is

quite funny, if not downright

ridiculous. Some experts agree,

but they have more meat to their

argument than personal opinion.

They argue that given the

multitude of products seen in a

movie, and the usual tying-up-

with-the-storyline, audiences do

not register the brands separately.

That is, in their opinion, product

placement does not push the

consumer from the awareness to

the trial stage of the marketing

life cycle.

110
But as with experts, there are

others who disagree. They feel

that certain age groups and

market segments are more

vulnerable to this kind of

advertising. Like the rickshaw

puller in the second row during

the late night show of Yaadein,

who might go out and buy Pass-

Pass out of some sense of loyalty

(for want of a better word!) to

Kareena!

Placing captures the essence of a

new kind of selfhood. The idea is

that the era of Branding is passe.

Now is the dawn of Placing.

People live with brands, brands

that are a part of their day-to-day

life. If they don’t, its up to you,

the marketer to place your brand

in their life... to twine it in so

cleverly that they'll never know.

To explain it better, we quote from

111
the site: “Just as most of us

spend more time with our

coworkers than our families, it’s

even more true that we spend

more time with products than with

people - and the relationships we

build around these products are

worthy of attention. It's the

interaction between the product

and the person that we call

placing.” Ahem!

No doubt it's a powerful idea. But

powerful ideas are like stem cells.

They need to be grown and

nurtured if you want to make

something of them. Product

placement has to go beyond a

mere 10-second shot or even a 5-

minute exposure on the silver

screen. It is no longer enough to

see a brand on 70mm. Marketers

need to take it beyond that. Also,

marketers would do well not to

112
shoot in the dark, and place their

brand in some flick as a kind of

me-too thing without a definite

strategy and without knowing

what exactly the association can

do for them.

Coca-cola India is a case in point.

The company’s market research

apparently threw up a statistic

that showed them the idea of

family and bonding appeals to

every Indian - no matter which

market segment he/she belonged

to. Now how do they go about

appealing to the finer sensibilities

of Indian youth, without mushing

about it? Get someone else to do

the mush - and who understands

mush better than the masala

makers? This has shaped the

company’s strategy, leading to

extensive tieups with Bollywood

blockbusters of the family and

113
bonding variety. They tested the

waters with Taal, and went the

whole hog with Hum Saath Saath

Hain. The association was not

restricted to mere product

placement. It extended to

promotion, sponsoring events etc.

It helped that the company had a

clear goal.

The top promotion of 1995, as

designated by the Promotional

Marketing Association of America,

was BMW's tie-in with Golden eye.

And one of the great strengths of

this promotion was to involve and

entice the company's retail

network to take part as much as

was possible. BMW dealers have

embraced the association with

Golden eye, and, more recently,

Tomorrow Never Dies, helping

BMW to get maximum leverage

from the deal. Again, note that

114
the company did not just stop

with making.

115
FINDINGS OF THE
CONCLUSIVE RESEARCH

1. Frequency of watching
movies.

No. Of Percentage ('x)


Respondents
Once a month 87 42.4
Once a week 54 16.4
Fortnightly 32 15.6
Others 32 15.6
Total 205 100

 42.4% of respondents
watch movies once a
month

2. Place of watching movies.

Rank Theatre VCD/DVD Cable


1 108 50 48
2 49 73 81
3 47 82 76
Total 205 205 205

Rank
Theatre 1
VCD/DVD 3
Cable 2

116
 Majority of respondents
usually watches movies
in the theatres.

3. Usually watch movies with:


-

No. of Percentage (%)


Respondents '
Friends 112 54.6
Family 64 31.2
Spouse/GF/BF 20 7.8
Alone 9 4.4
Total 205 100

 Majority of respondents
usually watches movies
with their friends.

117
Koi Mil Gava

1. Which beverage does


Hrithik Roshan ask for at
Preity Zinta's house?

Bournvita No. of Respondents Percentage (%)


Recalled 120 66.67
Did not recall 60 33.33
Total 180 100

 66.66% of respondents
recalled the brand name,
so the product placement
of Bournvita was done
effectively.

2. Which bicycle does


Preity Zinta present to Hrithik
Roshan?

Avon Cycle No. of Percentage (%)


Respondents
Recalled 50 27.78
Did not recall 130 72.22
Total 180 100

 Only 27.27% of
respondents recalled the
brand name, so the
product placement of
Avon Cycle was not done
effectively.

118
3. Which bike was awarded
to the winners of the
basketball game?

Hero Honda No. of Percentage (%)


Respondents
Recalled 138 76.67
Did not recall 42 23.33
Total 180 100

 76.670/0 of respondents
recalled the brand name,
so the product placement
of Hero Honda was done
effectively.

4. Which T.V. Showroom


was shown in the movie?

Sansui No. of Percentage (%)


Respondents

Recalled 16 8.89
Did not recall 164 91.11
Total 180 100

 Brand recall in this case


was very poor. 91.11 % of

respondents could not


recall the brand name, so the

product placement of
Sansui was not done effectively.

119
Baghban

1. Which tea does Hema Malini


prepare for Amitabh Bachchan in
the movie?
Tata Tea No. of Percentage (%)
Respondents

Recalled 68 37.78
Did not recall 112 62.22
Total 180 100

 62.220/0 of respondents
did not recall the brand
name, so the product
placement of Tata tea was
not effective.

120
2. In which bank does
Amitabh Bachchan work in the
movie?

ICICI No. Of Percentage (%)


Respondents

Recalled 137 76.11


Did not recall 43 23.89
Total 180 100

 76.11 % of respondents
recalled the brand name,
thus the product
placement of ICICI Bank
was effectively.

3. What was the name of


Paresh Rawal’s Music Cafe?

Archies No. Of Percentage (%)


Respondents

Recalled 63 35
Did not recall 117 65
Total 180 100

121
 Only 35% of respondents
could recall the brand
name, so the product
placement of Archies was
not done effectively.

4. Which car does Salman


Khan present to Amitabh
Bachchan?

FORD No. Of Percentage (%)


Respondents
Recalled 70 38.89
Did not recall 110 61.11
Total 180 100

 Only 38.89% of
respondents recalled
the brand name, so the
product placement of
FORD was not
effective.

Hum Turn

122
1. In which newspaper
was HUM TUM
cartoon published?

Times Of India No. of Percentage (%)


Respondents

Recalled 162 90
Did not recall 18 10
Total 180 100

 76.11 % of respondents
recalled the brand name,
so the product placement
of ICICI Bank was done
effectively.

1. Which news channel


covers the launch of Saif
Ali Khan's book 'HUM
TUM' in the movie?

NDTV India No. of Percentage (%)


Respondents

Recalled 54 30
Did not recall 126 70
Total 180 100

 Only 300/0 of respondents


recalled the brand name,
so the product placement

123
of NDTV India was not
done effectively.

2. Which magazine does


Saif Ali Khan read in the
movie?

Vogue No. Of Percentage (%)


Respondents
Recalled 68 . 37.78
Did not recall 112 62.22
Total 180 100

 Only 30% of respondents


recalled the brand name,
so the product placement
of NDTV India was not
done effectively.

4. Which brand of potato


chips was the cartoon
character' HUM' eating
in the movie?

Lays No. of Percentage (%)


Respondents
Recalled 157 87.22
Did not recall 23 12.78
Total 180 100

124
 87.22% of respondents
recalled the brand name,
so the product placement
of Lays is done effectively.

Average Recall

Koi Mil Gaya No. of No. of right Average


Respondents Answers
Once 91 124 1.36
Twice 42 86 2.05
3 times or more 47 114 2.43
Total 180 324 1.8

Baghban No. of No. of right Average


Respondents Answers
Once 106 193 1.82
Twice 44 81 1.84
3 times or more 30 64 2.13
Total 180 338 1.88

Hum Turn No. of No. of right Average


Respondents Answers
Once 119 281 2.36

125
Twice 40 106 2.65
3 times or more 21 54 2.57
Total 180 441 2.45

 The general trend shows


that as people watch the
movies more and more
number of times, their
brand recall increases.

 Brand recall also depends on


how recently they have
watched a movie.

Percentage of
Respondents
remembering atleast
one Brand Name

Movie Atleast one No. of Percentage (%)


Brand Name Respondents
88.89
Koi Mil Gaya 160 180

87.78
Baghban 158 180

96.11
Hum Turn 173 180

90.93
Total 491 540

 Research shows that


approx. 91 % of the
total audience
remembers at least one

126
brand name after
watching the movie.

127
STATISTICAL
ANALYSIS

HYPOTHESIS:

Null Hypothesis H0: -

Product placement is not

effective.

Alternate Hypothesis Ha:

-Product placement is

effective.

LEVEL OF SIGNIFICANCE:

We will be testing at 5% Level of

Significance.

TEST CRITERION USED:

This is a non-parametric test, as

we are not dealing with any

128
values. It is also known as Chi-

Square test of dependence.

CALCULATIONS:

Recalled
Recalled Did not Recall Row total
Movie
720
Koi Mil Gaya 324 396

720
Baghban 338 382

720
Hum Turn 441 279

2160
Column total 1103 1057

Chi-Square = Σ [observed value


(O) - Expected value (E)]
Expected value (E)

129
Expected value = Row total *
Column total
Grand total

O E (O-E) 2 (O-E) 2
E
Koi Mil Gaya 324 367.67 1907.07 5.19
Recalled Baghban 338 367.67 880.31 2.39
Hum Turn 441 367.67 5377.29 14:6-3
Did not Koi Mil Gaya 396 352.33 1097.07 5.41
Recall Baghban 382 352.33 880.31 2.50
Hum Turn 279 352.33 5377.29 15.26
Calculated Chi-Square 45.33

Calculated Chi-Square =
45.33

Degree of freedom = (R-


l)*(C-l) = (3-1)*(2-1) =
2

Critical Chi-Square at
d.f. (2) And level of
significance (50/0) =
5.991

130
DECISION:

Acceptance Rejection

45.53
5.991

As Calculated Chi- Square

(45.33) > Critical Chi-

Square (5.991).

Therefore we reject the

Null hypothesis (Ho).

And accept the Alternate

hypothesis (Ha).

131
“Product placement is
effective!”

132
CONCLUSIONS OF THE

RESEARCH

1. From the Statistical

analysis we can conclude

that product placement is

effectively done in Indian

movies.

2. Kids are very easily


influenced by product
placements.

3. As people watch the movies


more and more number of
times, their brand recall
increases and it also
depends on how recently
they have watched a
movie.

4. Product placement is very


effective on youngsters as

133
they get influenced easily
by actors/actresses. They
consider actors as their
idols and would want to do
what ever their idols do.

5. Very rarely does product


placement affect the
purchase decision of
people. In most cases
people don't change their
brands unless it has been
endorsed by their favourite
celebrity.

6. The number of times the


product is shown in the
movie also affects the
brand recall, but it should
not be overdone.

7. Product placement helps


advertisers get their
messages across to people
who aren't forced to watch

134
ads sandwiched in the
middle of the show.

8. Product placement has the


potential to create
tremendous product
exposure for a
comparatively small
expense.

9. Product Placement is an
effective strategy to gain
exposure and promote
products to the general
public.

10. Product placement is more


effective in the rural market
as compared to the urban
market.

11.Compared to traditional
advertisement, product
placement is being more
convincing, diversified,

135
imaginative, and
emotionally appealing.

12.In regards to the Studios


and Production Companies,
it offsets production costs.
Products and / or services
are provided f of charge to
the Studios and Production
Companies. The
Departments of props, set
decorations, wardrobe and
transportation can save a
sizeable amount of money
by using Product Placement
agencies. If there were no
placement agencies, these
departments would be
forced to buy or rent these
items.

13. So in short we can

conclude that the

advantages of in-film

placements are:

136
 Big stars at a fraction of

the costs.

 Films transcend

geography, class and

culture barriers.

 Clutter- free

environment.

 Not subject to surfing,

zipping or muting

(unlike in TV and other

media).

 Catches people in a

receptive mood.

 Revived and revisited

several times as a film's

length always get

lengthened.

 Target specific.

 Opportunities for cross-

promotions.

137
‘ANN

EXUR

ES’

138
QUESTIONNAIRE

1. How often do you watch a


movie?

139
 Once in a week

 Once in a month

 Once in fortnight

 Others (Please
specify)

2. Where do you usually


watch movies? Please rank
the following according to
your preference (1-Highest,
3-lowest)

 Theater
______

 VCD/DVD
______

 Cable
______

3. With whom do you usually


watch movies?

 Friends

140
 Family

 Spouse/Girlfriend/B
oyfriend

 Alone

4. Which of the following


movies have you seen and
how many times?

 Koi Mil Gaya


________time(s)

 Baghban
________time(s)

 Hum Tum
________time(s)

 Viruddh
________time(s)

Please answer the following


questions as per the movies
marked.

“Koi Mil Gaya…”.

141
1. Which beverage does
Hrithik Roshan ask for at
Preity Zinta’s house?

Ans.
___________________________
___________________________

2. Which Bi-cycle does Preity


Zinta present to Hrithik?

Ans.
___________________________
___________________________

3. Which bike was awarded to


the winners of the
basketball game?

Ans.
___________________________
___________________________

4. Which T.V. Showroom was


shown in the movie?

Ans.
______________________
______________________

142
“Baghban”

1. Which tea does Hema


Malini prepares for Big B?

Ans.
________________________
________________________
___

2. In which bank does


Amitabh Bachchan work in
the movie?

Ans.
________________________
________________________
___

3. What was the name of


Paresh Rawal’s music
café?

Ans.
________________________
________________________
___

143
4.Which car does Salman
Khan gifts Amitabh
Bachchan?

Ans.
________________________
________________________
___

“HUM TUM”

1. In which newspaper did


Hum Tum cartoons
published?

Ans.
________________________
_____________________

2. Which news channel


covers Saif’s book launch
in the movie?

Ans.
________________________
_____________________
3. Which magzine does Saif
read in the movie?

144
Ans.
________________________
_____________________

4. Which brand of potato


chips were the cartoon
characters eating in the
movie?

Ans.
________________________
_____________________

“Viruddh”

1. Which money transfer

service does Amitabh

Bachchan use in the movie?

Ans.
__________________________
_______________________

2. Which brand of automobile


oil did Sanjay Dutt use in
the movie?

Ans.
___________________________
________________________

145
END

(The above questions on the movies were

included to get the unaided brand recall

in some cases.)

“RESPO

NSE

146
SHEETS

147
RESPONSE SHEET NO. 1

Name: Puneet Sood

ID Number: FW04722

Title Of Study: Marketing & Brand


Positioning In The Industry Of
Entertainment.

Date of Consultation with


Guide: August 2005

The Outcome of Discussion:


Being the first discussion about the
thesis, I was able to clear out my vision
regarding the study.

The Progress Of Thesis: The


thesis would be divided into 2 parts,
Television and Movies. The main focus
would be on the differentiation that
exists in both the fields while placing
the brand.

148
RESPONSE SHEET NO. 2

Name: Puneet Sood

ID Number: FW04722

Title Of Study: Marketing & Brand


Positioning In The Industry Of
Entertainment.

Date of Consultation with


Guide: September 2005

The Outcome of Discussion: The


second discussion comprised of the
detailed discussion about the market,
which is expanding for the marketers in
the entertainment industry. Detailed
discussions were made about the small
screen placements and a brief overview
of the film market.

The Progress Of Thesis: I’ve


completed the study of the market
prevailing in the small screen, mainly

149
comprising of game shows, reality
shows etc.

As, the market is huge and it is not


possible to take all the shows as
example, therefore short and crisp case
studies on the most popular T.V.
programmes are taken into
consideration for research and analysis.

RESPONSE SHEET NO. 3

Name: Puneet Sood

ID Number: FW04722

Title Of Study: Marketing & Brand


Positioning In The Industry Of
Entertainment.

Date of Consultation with


Guide: October 5, 2005’

150
The Outcome of Discussion: The
third discussion turned out to be very
informative session with Viraj sir, as he
pointed out key points that were not
very visible in the research.
Discussions about the marketer’s
preference depending on the price,
viewership and repetitions, gave a base
for better understanding and
positioning strategy.

The Progress Of Thesis: I’ve

completed the study of the market

prevailing in the small screen, mainly

comprising of game shows, reality

shows and an overview on daily soaps

etc. As, the market is huge and it is not

possible to take all the shows as

example, therefore short and crisp case

studies on the most popular T.V.

programmes are taken into

consideration for research and analysis.

An interview session with Nina

Jaipuria (V.P. Sony Set India Ltd.)

turned out to be very informative and

151
enriching experience as she explained

the whole business prospective

hovering around the T.V. soaps and

other game shows.

RESPONSE SHEET NO. 4

Name: Puneet Sood

ID Number: FW04722

Title Of Study: Marketing & Brand


Positioning In The Industry Of
Entertainment.

Date of Consultation with


Guide: October 5, 2005’

The Outcome of Discussion: The


fourth discussion was mere analysis of
the job and researched conducted
previously.

It consisted of analyzing the


information received from the death
interviews conducted last week.

The Progress Of Thesis: The

study is at an important stage, as it is

152
almost going to complete the first

hurdle of television industry and its

brand placements. It has reached the

analytical part.

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