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Case Study

Wow, such a pleasant moment! exclaimed Aditi feeling nostalgic and excited on seeing her three
best friends after over a span of 5 years. Four Friends; Aditi, Tanushree, Kapil and Neel meet at
their 25th college reunion at their Management Institute. Aditi is a Management Consultant with
one of the leading production houses in Hollywood in the United States. Kapil is the Managing
Director at a Multi-national company based in Germany whereas Tanushree looks after the HR in
Balaji Telefilms Ltd. Neel, unlike others, has resigned from his job as a CFO and is looking
forward to start his own Venture Capital firm.
As the night kicked in, all of the four friends started playing their favorite game: Antakshri.
Tanushree said Even though we are far apart, we always get time to catch a movie every weekend
and discuss the same over phone without fail. I believe Bollywood is somewhere responsible for
our friendship. Sharing the love for films and Bollywood songs, they started suggesting ideas to
Kapil that he should start a film venture, this would allow him to follow his passion as well. Kapil
was reluctant to accept their suggestion because he was well aware about the non-structured
Bollywood industry of India. Aditi further added, with her experience from Hollywood that these
four friends should do something on their own for the country and suggest the measures of reform
to authorities.
Bollywood should be defined as an industry and each production house should work as corporates?
Kapil expressed astonishment Dont they already? To which, Neel answered Presently they
dont. Then how does the Industry function? Tanushree added further, Every Friday we see
that new movies irrespective of whether they hit box office or not, bank so many crores. How does
it happen?

Background
Cinema entered India in 1896 with the screening of six soundless short films in Bombay. Dada
Saheb Phalke, considered to be the father of Indian cinema, made the first fully indigenous feature
film 'Raja Harishchandra' in 1913. The first film with sound 'Alam Ara,' was released in 1931, and
the first color film, 'Kisan Kanya,' was released in 1937.
The industry followed the 'studio culture' of Hollywood in the initial days, wherein big movie
production houses (called studios) hired stars, music directors and film directors as salaried
employees for four to five years. However, over the years, the studio system gradually gave way
to independent producers. The decades that followed saw Indian cinema flourishing and becoming
an integral part of every Indian's life. Film stars, producers, directors, music directors, lyricists and
playback singers became immensely popular celebrities.
The industry was broadly classified into four segments - software (films, music and programs),
hardware (studios and other infrastructure services that support the creation of entertainment
software) and services (distribution, exhibition, film procurement and banking services) and the
front-end media segment (which film magazines, video cassettes and promotional tools). By 2001,
the Indian film industry had produced about 73,830 feature films and thousands of documented

short films. With around 800 films being produced every year, in over 52 languages, India was
undoubtedly the world's largest film producing country.
Bollywood is also one of the largest centers of film production in the world. Furthermore,
Bollywood is one of the biggest film industries in the world in terms of the number of people
employed and the number of films produced. According to Matusitz, J., & Payano, P., In 2011,
over 3.5 billion tickets were sold across the globe which in comparison is 900,000 tickets more
than Hollywood. Bollywood produced 252 films in 2014 out of a total of 1969 films produced in
Indian cinema.
As per Forbes report, Indian Film Industry makes more movies than any other country, 1,500 to
2,000 annually. And its people are famously fanatical about those movies and their movie stars.
By almost any measure, India should be the worlds highest grossing territory in theatrical revenue.
So why does Indias movie industry gross only $2 billion per year at the box office?
The success rate of Indian films was extremely low. A majority of the films could not even recover
the investments made. Even after nine decades, the number of 'blockbuster' movies was very low
when compared to the US film industry. Analysts claimed that the most significant problem was
the lack of quality and the mediocre production values often resulted in films sinking without a
trace in the market. With concerted action, especially by Indias government, most of the
impediments could be addressed and removed, to free India's cinema business to perform at the
level it deserves.
1. Do you think the film industry would be able to transform itself completely to a corporate
setup?
2. What are the challenged faced by the production houses to adapt the corporate practices,
how can they cope up with these challenges? Support your answer with a structure.
3. Develop a strategy for the business. Construct a coherent and sound Business Plan which
should cover all primary aspects of the business (Marketing, Finance, HR etc.)

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