How's my Luck now?

Reflections, views and descriptions during my stay at IIM Lucknow from July 2004 to March 2006

Name:
Location: India

Saturday, August 20, 2005

The business of entertainment

This was the theme of the industry interaction session held today. The speakers were: Mr. Tarun Tripathi (an IIML alumnus of the 2002 batch, now Marketing Head of Yashraj Films), Ms. Avisha Goswami (Marketing Head of Fame Adlabs) and Mr. Tushar (from Mindshare Entertainment). The aim was to familiarise people here with the dynamics of the entertainment industry in general and cinema in particular. The value chain of the industry was sought to be explored.

I could not stay for Mr. Tushar's talk in the end, but enjoyed those of the other two. The common theme running through the presentations of both the film production & distribution house (Yashraj) and the exhibition house (Shringar) was that of diversification in the sales mix. A film is the basic product both of them get a bulk of their revenues from. But, like in Hollywood, ticket sales & box office collections no longer constitute the only revenue stream. The film is ridden on with various marketing alliances, advertising, merchandise sales, food & beverages and a whole lot more. On the whole, a field full of possibilities, an exciting field to work in. There were many other interesting tidbits, as can be expected from this industry.

I believe a major source of this diversified revenue mix strategy is the corporatisation and professionalism being infused in the industry. We are still very far from a scenario where enough data about consumer preferences on film subjects, directors, stars, etc. exists, and films are made according to the viewer's tastes. So, individual creativity and inspiration (of all kinds :) ) basically drives the films that are made. All marketing is after the fact - selling a movie already made or being made. This is why nobody is able to reliably predict which film will be a hit at the box office. Now, once you are listed on the stock market, the share price is a disciplining factor, and you cannot rely on the fickle tastes of the public as the sole revenue stream. Hence, this strategy. Of course, a major factor contributing to the success of this strategy is the wealth that urban and semi-urban India is witnessing, and the high disposable incomes of people. In fact, the way every industry talks about grabbing the individual's 'share of wallet', every product/service might just become a substitute for every other product/service not far in the future. As a preparation for such a future, C. K. Prahalad's exhortation of identifying the 'fortune at the bottom of the pyramid' might be good to follow.

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