Strange Industry – Movies
November 21, 2009
Indian movies industry – “bollywood” is really one off/strange place with only/less then 5% success ratio. Out of roughly 200 movies release in a year, only 10 or even less earns good profit and still movie budget and star prices always go up..!!! But even more movies are made and with bigger/better budget and stars..and recession had very little impact on it..market is bigger now compare to what is was 10 year back and has grown to US, UK and Australia but still its loss..hardly someone buys CD/DVD or Cassette nowadays…
When a movie makes loss of 10 Crore who pays for that? Producer or Distributor or Financier or Common people? And its every year phenomena from last at least 30 Yrs..Sometimes a producer goes into trouble but still makes movies and as time goes everything is back on track..!! Where is the loss? Who has lost and if no one has lost money then who has paid or it is just rumor or speculations that really there is some big loss every year..!!! or common people are indirectly paying for it without knowing it??? And if overall there is loss and no profit then why many Corporates have come into that? I do not think Ambani will jump in any loss making business..
Not sure about Hollywood or other places but it might be same..
may be common people are paying in some or the other way which is not visible or known clearly..!!!
November 22, 2009 at 7:13 AM
Reason number 1 is of course black money. If you can turn some of your black money white via movies you would probably still do it if you had large amounts of black money and you were unable to use it normally because of it being unaccounted for.
By the way the entertainment industry is one of the few industries that is historically known not to be too affected by recession. In fact if I remember correctly it does better in times of recession and war because people turn to it for comfort.
November 22, 2009 at 4:01 PM
I do not think they loose money. They consider profit based on Box office collections, I think. But, there are other hidden numbers that I think we never see. Like when they advertise some product in movie (i.e. laptop, car) they get some money from companies. Then, they sell TV/Cable/Satelite rights of movie and then TV companies make profit by showing more ads. Do we really see all numbers for a movie profit? Obviously, some movies fail miserably. They might also can be hiking cost even though movie cost less to let us think movie failed and save money on tax. I do not think they need to show right numbers to anybody if producer is not public company. Just my opinion…
November 22, 2009 at 6:52 PM
@Varun. Thanks for comment again.
Agree. Its one way to convert black money into white one. And yeah people do turn to entertainment to forget things and get enjoyment for sometime..
@Samip. Thanks again.
Of course their ways of income have increased and they would play with balance sheet to save some tax but still I believe they will loose some money..Surely there are ways by which they fulfill that loss but it remains one of the curious industry at least for me..!!