Entertainment Industry in India – outsider’s analysis

This post will try to answer two questions that you might have asked. If you think these are non-questions, do not waste time. This post is not for you.

This post will help you if you are an entrepreneur or interested to start a business. This will provide a clue as how to de-risk your business. Read the questions first. After reading the post, you will be either nodding your head or will become angry. Either way, you read this Film Review which concertizes the whole argument in the post.

Question 1 : How come Bollywood or for that matter our national film industries continue to produce so  many “flops” – commercially, creatively, artistically ?  How people who fund these “products” endure ?

Question 2: How Indian TV soap operas operate for days, weeks, months and years without audience becoming bored and stopping to watch ?

Answer to Question 1 

Since the first Indian feature film some seventy years back till 2005/05, films were produced by people in India who were filmwallahas, hope you get the idea. They did not have MBA or other fancy degrees and were not employed by multi-national corporations.  Their capital was a mixed one – personal debt, debt at 30% interest from merchants and businessmen and then from businesses of ill-repute. The predominant revenue was from sale of tickets, i.e when people used to go to movie theaters and purchased tickets to watch the movie.  There was distributor, exhibitor, movie theater owner and the end user. More people watched a movie, more money was made for all the people in the chain.  Thus, commercial success of a movie was directly dependent on people paying for watching it in a theater. 

The whole business was risky and it only attracted and retained people who loved films – irrespective of taste or idea on cinematic quality.

International Studios entered Indian film industry as a maker of films.  They immediately recruited MBAs from top institutes (little understanding that most of them did go to these institutes to have a better station in life, neither loving business or its administration and having little creative urge – either for film or for any creative art.) who went into overdrive. 

The home-grown industry has discovered by that time that it is infinitely risky to depend on a film’s “success” on the old model – footfalls in the theaters. So  they structured their revenue mix in such a way that before the film is being made, contracts were signed with satellite TV, music rights, Internet rights, advertising and many such things. In order to convince those buyers (or those who are going to bear the major risk), huge marketing expense is made. Hence you shall see that A-star actors roam like over-worked salesman, “promoting” the movies. They “are” not promoting the movies under promotion per se, but convincing the other “revenue stream providers” convinced that their interest is being taken care of. This exercise ensures 70-85% of the cost being recouped even before the movie is released. 

This business method is reinforced by the following factors :

a. Fickle nature of the audience – Indian audience has been exposed for two decades to many things on which neither the Indian state nor the Indian civilization  had neither any seminal contribution nor any control. For example, Internet.

b. Most of the A-star actors endorse various brands as well – including global brands and they were chosen for their “area of operation” in India – a very large market. It is immaterial for the brands to know whether they are good / bad / ugly actor. In other words, acting skills do not come into the equation as long as the brand-donkey bears the load of the Indian Market.

c. Except the sensor board, ALL players in the industry are freelancers in some way or other. Whether it is A-rate actor,director or producer – everybody has the freelancer’s insecurity and terrible professional jealousy.  So, all of them are searching for avenues to mitigate risk and this business model offers quite significant mitigation of risk.

It is because of this business model, you go to a theatre ( pushed also by the incessant promotion and hype) and you watch a movie and then you ask yourself why did you land up here ?

Answer to Question 2 

One word answer : Populous country.  Every populous country can comfortably rely on statistics on every issue.

Supposing a country of 1 crore (10 million) people, let us do the math

Total days to broadcast in a year  = 365 – 52 (except sundays) = 313 days * 3 hours ( 7 pm – 10 pm) and let us consider 1000 hours of prime time. In other way, 10 million * 3 hours = 30 million hours is the total time you have with you. You need to insert the 1000 hours within some “grid” of 30 million hours.

Now, India – 100 crore (1 billion) and you need to map the 1000 hours into this grid of 1 billion hours. It is quite clear that of this 1 billion hours, there will be a significantly high population that will consider anything in that 1000 hours watch-worthy. Even if the camera looks into an empty room for 1 hour !

It is simply statistics. Nothing else can explain this phenomenon.

Only one question remains to be asked : why advertisers find this attractive to sponsor these soap operas ? They must be getting something out of it.

Of course they do.  They also get warmed up by the statistical glow – 400 million people watching your advert – although it is also clear that majority of the people who watch these adverts do not fall into any customer segment of the product being advertised ! Yes, it is true.


I have highest regard for the freelancers in these industries in various departments. I know what it takes to deliver in spite of ever present insecurity, dealing with predators of various kinds specific to third-world economies, competition of a typical kind in a populous country and the soul-crushing pettiness of professional rivalry in these industries.

In the bygone era, things were brutal but there was a grandeur in the industry where some extremely passionate people stood directly in front of the end-user.  For this courage and risk, we do remember them – not only for the technical aspects. They were more autonomous and free.

The current business model has provided security but at what cost !!!!  The first world business model is imposed on an industry with different evolutionary path and the Indian men and women who are “installed”by the “international studios” do not have access to the “soul” of the industry.  The mediocrity is written all over.

In passing, similar thing has happened in IPL. I read in the newspaper that when first teams were brought and sold, there were these “managers” who dared to ask a batsman f the class of Dravid as why did he play the way he did ?

The “manager” who asked this most likely can be mapped as below :

“A lower middle or middle class youth who had invested his entire youth to get into the I-institute – technology or management does not matter. His entire knowledge of life came from text books, TV and men of the same class of the same world-view. He never played any game for pleasure or played an instrument as to cultivate some high culture. An I-pad brandishing peasant, his only identification is the job he holds as a manager.”

This man now goes and asks as why one of the greatest batsman of the world played the way he played.

This is the greatest tragedy of our populous nation.


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