Movies

Movies - Bollywood is inseparable from the music industry benefiting from its large pool of composer, poets and musicians. Through the highly developed ICT-sector, latest software, IT23 skills and favorable conditions such as reduced telephony rates, coverage of high-speed bandwidth connectivity are available. As for mobile telephony, penetration is still low (14%) but India is potentially the 4th largest wireless market in the world and already today non-sms data are the second highest revenue base for mobile phones. Consequently, Bollywood started producing short movies for mobile phones (Fitchard, 2007, Jayaram, 2007). A further weakness is at the level of the exhibition infrastructure. The total capacity is 13,000 screens, out of which only 9,500 remain fully operational per year and of theses only 700 are multiplex screens (Ernest & Young, 2007a). The demand for Bollywood movies is diversifying, and Bollywood needs to adapt quality and content its movies. The cluster’s success historically has been based on its ability to cater to a large and fairly homogenous demand: coming out of poverty, people demanded escapist movies with emotion, dance and singing: the typical “masala movie”. However, an attractive scale of domestic demand prevented the industry from developing other formats, such as movies for Western export markets, with larger revenue potential. The overseas market is currently estimated at Rs. 7 billion (approx. USD 180 million), and expected to grow at 18% annually. But Bollywood only captures less than 10% of its box office revenues abroad (PWC & FICCI 2007). In addition, with a growing middle class (300 million) there is also an increasing gap between urban and rural demand. The former now demands more and more Masala movies- a demand that cannot be met due to limited availability of talent (Shedde, 2006, Dwyer, 2006). Hence, international movies begin to penetrate the market to fill this demand gap. Although currently only 2% of annual revenues and 5 % of about $1 billion tickets sold are being captured by foreign firms (Naachgaana, 2008b), foreign movies present a challenge. Hollywood movies with better marketing (larger budgets) are gaining market share.12 Especially the large young population (more than 50%) is disillusioned with domestic music and cinema and are more susceptible to the arrival of Hollywood.