How do Bollywood movies earn money in 2023
Introduction to Bollywood: A Global Film Industry
Ajay Devgan got so angry that he complained in the competition commission of Indianhead Yash Raj is misusing his powers. For example, Anushka Sharma, Sushant Singh Rajput - all of them had signed the contract with Yash Raj. For the movie 'Band Baja Baraat' Ranveer Singh's father Jagjit Singh Bhavnani invested 20 crore rupees in Yash Raj production, the only he got the movie. The movie that flops, comes very earlier in OTT.
The reason behind is that be it Diwali, Eid - everything is fixed since before that whose movie will be release date no one else dares to bring their own movie against them. That we'll give you the movie 'Ek Tha Tiger' only when you'll release our other film 'Jab Tak hai Jaan' on Diwali. None of the actor dares to refuse to work in his film otherwise, he gets boycotted from bollywood. You don't remember anything apart from the item song 'Sheila Ki Jawaani' India's film industry is one of the world's biggest film industry. Bollywood,
Box Office Collections: The Major Revenue Source
Tollywood, Sandalwood - altogether make more than 2000 movies in a year. Now, among these 2000 movies - how many of them can you remember?20 or 25And how many among them are there - about which you might've just heard their name? Maybe 100 or 200 and talking about going to theatres & watching the movie - how many of them have you seen? So, on a n average you're only able to watch 10 or 15 movies.
The 2000 movies that come in a year - 90% of them are flop. And they can't even recover their cost production from the box office. But even after that, the trend of making movies every year doesn't decrease .Instead, it has been increasing every year. More and more movies are being made - now, nobody makes movies for charity they make movies for profit & the business for making movies is considered very risky, all over the world.
Theatrical Releases: Capturing Audiences Worldwide
You invest lot of money for several years & if you make bad movie, then the movie gets out of the theatre within 3 days. And once the movie is released then you don't have a chance to correct the mistake. That's why there's a lot of risk in making movies. This year, a film starring Kartik Aryan & Kriti Shanon 'Sehzada' film was so bad that critics had given it 0 stars .And because people didn't come to watch the movie in the theatre,
it had to be removed from the theatre within 2-3 days But even after that as well, this movie was a profit for the business it took 65 crores to make this film and 20 crores in the promotion this film was made in a total of 85 crores. Its lifetime gross collection was 38.33 crores. Gross collection means how much of the tickets were sold in total but since the government takes entertainment tax so, if we remove this tax then net collection is 32 crores. And the international ticket collection from this film was 9 crore rupees. Even after that –
Satellite Rights: Broadcasting Success
this movie earned more than more than 105 crores so, how does a movie make money even after being a flop after making a movie, how does it reach to you - what is the arrangement of selling the tickets why did single screen got close dand why are we watching multiplexes everywhere? We'll discuss all these things in detail here today.
Long ago when movies were made, then they weren't that organized nor a corporate structure existe dearlier some independent producers used to keep their property on lease or they took money on interest from the financer and then made movies & if the movie flops, then they would be bankrupted. Risk was so high at that particular time –
Overseas Markets: Bollywood's International Appeal
only underworld & politicians would invest money in movies. And the movies during that time used to only be shown in single screen theat resit didn't come on TV safter some years, enters the big production houses like Dharma productions, Yash Raj, UTV, Reliance Viacom, Balaji international so, earlier the independent producers and financers that used to take risk to make movies big production houses started doing that but as a company. And turned this entire movie industry to a systematic structure like you
might've heard about a production house - Phantom. This production house was started by Anurag Kashyap, Vikramaditya Motwane, Madhu Mantena and Vikas Bahl And in future Reliance took 50% of its stake now, if Anurag Kashyap would have made movies by investing alone then he would've high risk but they made a movie, gathered lot of people & the third party- reliance also invested money by taking stake so, the problem of money for them decreased,
Merchandising and Brand Tie-ups: Expanding the Film's Reach
along with their risk. There are cases as well where they invest in production houses to launch their children like as it is said - for the movie 'Band Baja Baraat 'Ranveer Singh's father - Jagjit Singh Bhavnani invested 20 crores in Yash Raj production, only then did they get the film. Although, Ranveer Singh had denied that this isn't true. And
when production houses were made this way, then they did one more thing they started making portfolio so, now what does this portfolio means? Means instead of investing in only one movie, they started investing in multiple moviesl ike, they bought some movies from independent producers, some movies were made by themthey made some of the movies with other studios with partnership they invested some movie.
Celebrity Endorsements: Leveraging Star Power
in huge budget films, which starred big stars. They invested some money in small budget movies. They invested some in mid-budget. If I take the example of EROS then EROS makes 20 Hindi movies in a yearamong which it produces two of them itsel fit takes 6 movies from independent producer sand co-produces 12 of them
and it includes 7 big budget films7 medium budget films and rest of them are of small budgetsand if we talk about Viacom, then it has owned a little bit different strategy from themViacom has made a portfolio of all small budgetseven today, they play with small budget films, likeTanu weds Manu, Pyar Ka Punchnama, Gangs of Wasseypuruntil now, looking at the success of this production model, the big starswho had good amount of money,
Budgets and Profit Margins: The Business Side of Bollywood
they felt like - film is successful due to themso, we'll also open our own production house.So, even the big stars became a co-producer with big production houses orthey started with their own production house.Which includes - Shah Rukh Khan's Red Chillies EntertainmentOm Shanti Om, Ra.One, Chennai ExpressHappy new year,
Dear ZindagiShah Rukh Khan made all these movies from his own production.Similarly, Aamir Khan, Ajay Devgan - everyone started their own production houseswhen these big production houses arrived, they made a systematic system of production & financebut the money that they earned from tickets of single screenthey also opened up various ways for earning that.So, to understand these - its very important to know what the rights are.A film is an intellectual property, not a physical property.Physical property like
lops and Failures: Lessons Learned from Box Office Disappointments
Soap.You buy soap with money, then that soap belongs to you - now if you want, you can shower with itor destroy it or let your friend use it - its depends on youbut intellectual property like movies - songs - if anyone has written any bookwhich includes an Idea, creativity - you can experience it by giving moneybut you cannot sell it to someone else.You might say that - we've bought the movie ticket with money - now go to the movie hall &
record with mobileand you can even show it your siblings at home as wellso, this is an illegal activity because - movie is an intellectual propertyfor example, you bought a CD of a song & you're thinking of selling it to people by copying it to the computeror start sharing it to your friendsSo, this is also an illegal activity - if the company interferes then you can even have Jailso, these production houses made it systematic as well.Since,
The Future of Bollywood: Trends and Innovations
movie is an intellectual property & whoever made that moviewill decide who'll get that move and song for how much time and how much timeNow, this concept comes to be a gamechanger.The movies that were made during that particular time were run on single screen halland in some areas - there wasn't even a movie hall.So,
who could afford movie halls or whoever had movie halls in their area,only they could watch the movies.But in future, production houses started giving rights of movies to the TV as wellnow, with this - the movies that were aired in hall and then removed within few daysnow after being removed from the movie hall - it started to air on TV.
Music and Soundtracks: Tapping into the Audio Market
With this they earned profit as well as film industry had reached door to door.Due to this, film industry became more famous and people used to watch movies on TV a lot.So, TV staffs inserted advertisements in between movies earned a lot of money.And production houses started getting more money after giving the movie rights to the TV.
When SOORYAVANSHAM was released, it was a flop film but when the producer sold its rights to the TVthen the money it hadn't earned during its releasehe earned more than that from the TV rightsthis movie was a flop at that time but after coming in TV - everyone remembers until this date that'Heera Thakur was given poisoned porridge.'And this movie was aired multiple times by SetMAX - due to which it earned so much money from the advertisementsthat was even more than what one movie would have earned.
TV staffs liked this model very much and the race for buying TV rights of the movie started.Be it any field, when you bring a new intelligent approach in any businessthen the chance of its success and being profitable increases.Like, how Mr. Damani increased a small business like D-Mart to a thousand times due to his new approach.And you can watch this in my new video seriesonly on SEEKHO app.This is my favorite learning app, where you get to learn lot of things other than business tipslike, new mobile tricks,
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songs started to be launched in the form of CDs, cassettes at buses, home & partiesand they earned huge money with it.That's why you'll see, whether there's a situation or not in the movie - songs are forcefully fitted.And suddenly, lot of dancers appear behind the hero.So, that later in the videos and CDs - songs should look good.And the earning should be good. Nowadays, in Youtube, SpotifyMusic channels have got their rights as well.So,
they earn with that as well.Now, as time went on - in the movies - shooting took mostly in foreign locations like UKso, these production houses targeted those destinations outside Indiawhere they got tax rebate for shootinglike, when you shoot in UK, London - you get Tax rebatethat is why - the movies that were filmed earlier in
Indiatheir songs started to be filmed out of India.And then in future along with India, they targeted international markets as wellalong with international distributers.How are these films distributed? Who is the distributer?I'll tell you that as well. So along with foreign distributorsthey started releasing movies out of India as well.
The same movie which only earned in India - it started earning from outside as well.Like, Sharukh Khan was hit in the international market before as well as now14 of Sharukh Khan's films have earned more than $10 million
dollars meansthat they get Rs 50-100 crore from outside of India.Due to this, his movie carries a safety net & that's why his film gets more value.In 2015, his film DILWALE was created in Rs 75 crore & it earned Rs 170 crore from the countries out of India.Similarly, the movie 'Secret Superstar' was made in Rs 15 croreIt earned Rs 63 crore in India
but out of India, it earned Rs 863 alone from Chinaand along with international market, multiplex was introduced in India which were expensive than single screenthe ticket for the hall of single screen was around Rs 50but the tickets of multiplex were around Rs 200.you might've noticed one thing that earlier the films that were
superhitwere known even to kidsbut in today's date - every movie becomes blockbusterand even after being a hit film - not many people know about it.So, the reason behind is Multiplex. When they came to Indiaproduction houses realized that if people watch films in multiplex thenmovies will earn more money.Because tickets of multiplex
is expensive.So, production houses realized that in India, they can earn money even though less people watch the movieand film can be made hit.The money that you earn in single screen by showing it to 1 crore peopleyou can earn the same money by showing it to 20 lakh people in a multiplex.And production houses got so addicted
to this trickthat they increased the price of tickets of each movie andthey increased the price of tickets in multiplexevery movie was made hit - 100 CR club, 300 CR clubthis became a very normal thing for these people.But due to this, single screen in India started to closeearlier, there were 12,000 single screen cinema halls in Indiabut in 2019,
they got decreased to 6500you'll notice that - the single screen hall are continuously closing &there aren't any cinema halls remaining for people of small cities.now remember and tell me that - when was the last time you saw a rickshaw driver or a labor going into the movie hall or multiplex and this caused loss to the bollywood becausethe reach of bollywood decreased. Bollywood movies were earning even beforebut by showing movies to
huge number of people.They are earning money even now but by lowering their reach.After all of this, the gold platter was when OTT rights started to sell.Netflix, Amazon, Hotstar - all of the OTT platformsthere's a race among them to keep as much content possible in their platformbecause the platform with more content, can sell their subscriptions even better.That's why even the bad movies are getting good deals on OTTyou might've noticed
one thing that - the movie which flops, comes sooner on OTTthe reason behind it is that - the negotiation of OTT & TV rights is based onthe number of days after which the movie will be launched in OTT after being released in the hallswhich is called holdback rights.The sooner the movie releases in OTT, the deal cracks in even more moneyGenerally, there're 8 weeks but if some movies are removed earlier from the theatre after being flopso,
its holdback rights decrease - the image that you're watchingin which 'Window period for OTT' is writtenthere is 5, 5, 2 written below itmeans after this much time of being released - movie has arrived on OTTthis 35 & 25 that has been written –
it means that, the movie rights were sold in this amountand beside it, the TV rights have also been written.If any of the movies become flop, then the power of negotiation of the producer decreases.And if he needs correct money
then he needs to go according to the OTT and OTT wantsthat the movie should be released as soon as possible.Like, Aamir Khan's 'Laal Singh Chadha'before the release, in their ongoing deal with NetflixAamir Khan demanded for 150 crore & told that - it won't be released on OTT before 6 monthsinfact, he told on record that bollywood is making a mistakeby releasing it sooner on OTT.Atleast for 6 months, before that they
shouldn't give on OTT - it leads to the decrease in value of their moviebut when his movie was a flop, then he had to deal with 70 crores & he had to give it on OTT within 2 monthsso, then he could feel the pain of other producers thatwhy do they have to give the movie sooner in OTTso, the example of the movie 'Shezada' that I gave in the
beginningthat even after being flop - how did it earn 105 crorethen now you would've understood.It was made in 85 crore rupees - 32 crore rupees of domestic box officeand it earned 9 crore of international box office.It got 40 crores from OTT, 10 crores from music rights & 15 crores from satellite rights that meansfrom TV rights.And
this was the reason that 'Shezada' movie had earned profit even before coming into the hall.And this is nothing - there was a movie named 'Tees Maar Khan'apart from the item song 'Sheila ki Jawani' you won't remember anything else.It was a flop.This movie was made by UTV in Rs. 55 crores & spent 15 crore in promotionbut
even after that - it earned Rs 81 croreand this is the reason - whether the movie is a hit or flop - movies are made back to back in Indiaso, you might say that - this is a very good businessthere's sure shot money in it - so, its not that - it includes the game of distribution as welldue to which, big and old production houses rule it. The rights
of moviesare the reason why movies earn money even before being released and in some casesit becomes a super duper hit before itself. So, when the rights are soldthe real game starts after that - of helping it to reach people after the movie is madeNow, the videos that I make - my distributor is Youtube - if Youtube won't be there
thenmy video won't reach people.So, be it a video or movie - its very easy to make it but the distributor has such a systemdue to which people receive the video or movie and distributor takes money for itto help my video reach our people, whatever AD revenue is thereYoutube cuts out 45% of it and similarly, for the distribution
of moviethere's a system and the distributors charge money for it from the producers.There are different zones in India for movie distribution - which is called circuit by some people as welland these zones or circuit are differentiated. Basically, the movie of halls of entire Indiaare divided in zones - distributor says that if you want
to show your moviethen give us money & we'll hellp it reach the hall. For this, there's a distributor agreementand in this way, different cities and towns consisting of cinema hallsreceive the movies.Like, for the distribution of Hindi movie - there're 11 circuit zones - Bombay circuit, Delhi circuitNizam circuit, East Punjab circuit –
similarly, there are 11 circuits in India.But its not that - by making any video or movie - if they reach this distributors thenthey'll help to run this movie in hall.Distributors have made this system by investing lot of money.They want to show that film which can sustain for more days in the halland more people can come to watch it.Because, only then they can make money & only then the movie hall will make money.That's why they
entertain films of only reputed film-makers and actors.you might've heard a word that - Movie screening is going on. So, when the movie comes to its finishthen producers perform screening for these distributorsin which - distributors come and watch the movieand include ideas that how will the movie perform in hall & if they think
thatthe movie will perform good, only then they agree for the distribution.So, this is Shah Rukh Khan's moviedistributors know that people will come.so, distributor are in a huge race - when the distributors agree for distributionthen there's an agreement between producer & distributor which is of 3 ways in general.Firstly, is the outright
purchase.Second is Commission based & 3rd is - MG RoyalityMG means Minimum guaranteeOutright purchase means if a movie has been under 100 crore, distributor has bought for Rs 200 croresnow, even if it earned Rs 300 crore or 400 croreproducer comes out and the profit is earned by the distributor.Second is Commission
based means if a movie is of 100 crore, then only 10% will be of the distributorthey decide whether it'll be of 10% or 8%and that much is given to the distributor.Third is the MG Royality System.Suppose a movie of 100 CR has been made & distributor demands for 20z5 of MGmeans when the movie will earn 120 crore, then the first 100 crore will be taken up by the producer.And the the 20 Cr that will be earned would be
taken by distributor.And the profit earned after that - the distributor and producer will share it in 50- 50% andonce the agreement between, distributor and producer is signed, the producer gives a 'letter of permission' to the distributorthe distributor gives this letter to the movies lab,from where copies are made & those copies are sent to
the cinema hall.The role of the distributor is very bigthe big distributors have so much power that, they can release a movie in either less or more cinema halls.Distributor keeps the balance that, two big movies shouldn't clash togethermovies of two big stars shouldn't clash together, accordingly they've the release date in their hand.which movie
will come in Holy, which on Diwaliand these production houses are the distributors themselves, so when their movie is releasednobody else dares to stand against them.Be it any better movie, be it any talented producersand if any new producers tries to do do things, then this system is so much dependenton these big production housesthat it doesn't get screens to be released.And they get wiped out from bollywoodthat's why be it Diwali and Eid,
everything is fixed since before that whose movie will be releasedand nobody else dares to bring his movie before them.Once, Ajay Devgan had released his film 'Son of Sardaar' against Yash raj film 'Jab Tak Hai Jaan'he faced a huge loss due to it. First he wasn't given screens and the ones that were givenamong them almost 5000 screens were given in south Indiawhere none of the Hindi audience were present.And the rest of the screens weren't
even operationalAjay Devgan gets so angry that he complained in Competition Commission of India thatYash Raj is misusing his powers.But Yash Raj rejected and told that - when their last movie 'Ek Tha tiger' was releasedthen only they had made the agreement with the distributors that we'll give 'Ek Tha Tiger' onlywhen you'll release our other film 'Jab tak Hai Jaan' on Diwali.Ans along with it they also said that - Ajay Devgan's distributors were late in preparation &in future Ajay Devgan's complaint gets rejected.This was Ajay Devgan who could fight this far.Otherwise if it had been anyone else - then releasing the movie at the same timenone of the actor dares to deny working in their film.Otherwise they get boycotted from
bollywood.During the time of Sushant Singh Rajput as well, these things were donethat they were boycotted because he denied to work in working for a big banner companythese big production houses do one more thing that - the new talented actorssign a contract of 4-5 yearsthat they need to work only with themwhatever amount of money other givesnow, when an actor isn't famous - then at that particular time he makes any dealand
then he has to stay with that particular production houselike Anushka Sharma, Sushant Singh Rajput - all of them had signed the contract with Yash Rajand when the movie was released in the cinema hall, then there's a different arrangement herethe money they earn from selling tickets is shared between cinema hall & the producerthrough
sliding scale arrangementin this arrangement, the collection of first week is distributed 50% among the owner of cinema hall & producerin the collection of next week, 40% is kept by the producer & 60% by the owner of cinema hall.And similarly, the percentage of the producer decreases every weekand the percentage of cinema owner increases.Because, as the time goes by people come less - but the main earning of cinema hall isn't from
selling ticketshis main earning comes from selling food items in cinema hall & from advertisementsthe ads that come before the movie starts & the posters of the upcoming moviesthey get money for each of themand more than the normal adbecause once you enter the hall, then you need to watch the entire adyou cannot skip it &
secondly if you've visited the multiplex, then you'll have more purchasing power the ads of cinema hall are sold in huge money PVR earns 11% from their ad revenue & INOX earns 8% from the advertisements and the food items that are sold in the multiplex, are sold expensively earlier, they used to sell cold drink & water bottle which one gets all over India as it is. But people started complaining, as they were selling it at even more
rate than MRP and selling it even more than MRP in India is illegal, so they brought the solution that instead of selling the bottle as it is - they started to sell the same thing in the glass with ice and the started to make more profit than before that's why you'll notice that - be it water or anything else, everything is their own or they have a tie up where the cut is already added in the M R P the thing whose MRP rate is same all over India –
they don't sell that and knowingly interval is kept in between the movie so that people spend for food items the price of cinema hall tickets are also set different every time if there's a huge film then its ticket price is expensive since Day 1and it decreases with time this thing depends on the audience that is coming. Like, Kashmir Files which didn't have any big star so, in the beginning its was released in less screens and the ticket prices were
also less and when this movie started gaining speed, then it was aired in multiple screen sas much screen as possible & the ticket price increased as well they always keep the morning shows cheap because at this time - they target student sand they keep it expensive during evening and weekends because its the time of people who earn & have the purchasing power and in this way - the entire system work sat last let me tell you again