Marketing & Brand Positioning

IS ENTERTAINMENT INDUSTRY THE NEXT ‘BOOM’? A STUDY ON HOW TO PROVIDE A COMPETITIVE EDGE TO INVESTORS THROUGH MARKETING & BRAND POSITIONING IN THE INDUSTRY OF ENTERTAINMENT

Submitted to: Name of the Guide (Department) Submitted by: Name of the Candidate Enrollment No. Session Years

NAME OF THE INSTITUTE & UNIVERSITY

Acknowledgement The present work is an effort to throw some light on “A Study on how to Provide a Competitive Edge to Investors Through Marketing & Brand Positioning In The Industry Of Entertainment”. The work would not have been possible to come to the present shape without the able guidance, supervision and help to me by number of people. With deep sense of gratitude I acknowledged the encouragement and guidance received by my organizational guide xxxxxx (Professor) and other staff. I convey my heartful affection to all those people who helped and supported me during the course, for completion of my Project Report.

Name of the Candidate Enrollment No. Session Years

2

Many of life’s failures are people Who

did not realize how

close they were to Success”

3

PREFACE

Marketing is the most dynamic and challenging function of modern business. In the ultimate analysis it is marketing, which determines a firm’s success and ability to prosper in a tough competitive environment. With

the

integration

technological

of

the

developments,

global

economy,

media

rapid

revolution

pace

of

intensified

competition, discriminating customer markets and massive changes in distribution, business enterprise in India have started realizing the significance of entertainment industry. Corporate success is today synonymous with Product Placement. With the liberalization of the economy privatization and entry of MNC’s, the Indian business firms have become conscious about their brand placement. The focus is on the complex and dynamic nature of marketing with emphasis on creative problem solving for brands. Many business firms, their top executives and marketing managers gave their valuable time and materials for preparing my thesis.

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TABLE OF CONTENTS

CHAPTER- 1 SYNOPSIS ENTERTAINMENT INDUSTRY 1) NTRODUCTION: i) RESEARCH MODEL ii) TELEVISION SHOWS: 2) BRAND LOYALTY VERSUS PERCEIVED VALUE LOYALTY: i) Jassi Jaissi Koi Nahin… 3) MOVIE MANIA i) "Film Industry" ii) 'Hollywood' iii) An Overview: 4) MARKET HIGHLIGHTS & BEST PROSPECTS i) Market Profile ii) Statistical Data in USD Millions iii) Best Sales Prospect iv) B. COMPETITIVE ANALYSIS v) U.S. Market Position: vi) C. END-USER ANALYSIS: vii) D. MARKET ACCESS viii)Import Climate

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5) Distribution/Business practices i) BRAND WARFARE ii) Venture capital: iii) Overseas experience: iv) Main Study: 6) FINDINGS OF THE CONCLUSIVE RESEARCH i) Koi Mil Gava ii) Baghban iii) Hum Turn iv) Average Recall 7) Percentage of Respondents remembering atleast one Brand Name i) STATISTICAL ANALYSIS ii) CALCULATIONS: 8) CONCLUSIONS OF THE RESEARCH 9) ANNEXURES’ 10)QUESTIONNAIRE

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SYNOPSIS

Introduction:

Every generation has its own buzzword or in fact, sometimes a couple of them. The 21st century is no such exemption that is ubiquitously filled with the buzzword of ‘entertainment’ in every context. This particular term has given a different sight or an angle to the industry. Every event, function, market, product or any business proposition is somewhere or the other related or getting close to the industry of entertainment.

Media and entertainment industry is arguably going through a fast growth phase; it is a golden opportunity for the various brands to latch on to the chance to take the charge of positioning their brand in the right way. Understanding the mindset and motivations of this emerging section “The New Age Indian Consumer” is the key to success. The amateur film market has seen an encouraging growth of about 10% in the recent times.

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Definition: Creating and implementing advertising and promotional efforts designed to make a film stand out in a competitive market environment, film marketing typically uses the same methods. Movie marketing could take months of planning and organizing and its success can make or break a film. Movie marketing can be costly and usually considered in the whole cost of the movie.

Topic Of the Study: Market Potential of entertainment industry for various consumer products.

Objective of Study: The primary objective of this thesis is to exhibit the market potential for the investors through extensive marketing and brand positioning in the entertainment industry. It could also be referred as publicity and various image-building actions.

Other objects are as follows:  To analyze and examine all aspects of film marketing.

 To do an intensive research about the entertainment spending habits of the new age Indian consumer with special reference to cinema viewing.

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 Also to identify countries providing the incentives for the production.

Commercial Viability: This study would give some crucial guidelines to corporate houses and the film fraternity that would help them in business decisions. How can the film fraternity use these findings to market their films more effectively? How can the corporate get maximum visibilities in the mass media?

I would try and answer these questions to add value to anyone who reads the thesis. Here I list down few possible groups that can gain help out of this report:

•

Current players in the entertainment industry

•

Potential entrants in this industry

•

Global brands looking towards identification in the Indian market.

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Methodology:

I believe that no one source of information would suffice to support the findings and recommendations. Thus, a combination of primary and secondary sources would serve the purpose. At some stages of research and analysis, the justification of sources might face the secrecy code through the company, in such a case the data would be supported by the summary of the depth interview or a tentative questionnaire report.

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A. Primary Research: The following sources have been identified to provide primary information regarding the existing business dynamics.



Discussion Guidelines/ Questionnaire’s



Depth Interviews



Industry Experts



Industry specific consultants

B. Secondary Research: This is required before I can proceed and conduct the market research. There are various sources of secondary data available, viz.

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

Magazines



Newspapers



The Internet



Industry reports of private firms



White Papers & Fact sheets.

INTRODUCTION:

Every generation has its own buzzword or in fact, sometimes a couple of them. The 21st century is no such exemption that is ubiquitously filled with the buzzword of ‘entertainment’ in every context. Every event, function, market, product or any business proposition is somewhere or the other related or getting close to the industry of entertainment. This particular term (entertainment) has given a different sight or an angle to the industry but leaves one question completely unanswered i.e. Are there any guts to think beyond advertising? The latest trend in advertising is to make it, well, less advertorial. The tendency is to move away from in-your-face ads, where the product is the star, to mini movies or quasi-documentary vignettes that feature “real life scenarios” with the product(s) hovering in the background. Some would argue it’s a sort of

“art imitating life”

scenario- - where ads imitating the practice of product placement.

Have you ever watched a T.V. show or movie and felt like you were watching a really long commercial? If so, then you have been the

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victim of bad product placement. There is a very thin line between being visible and overly visible or you can say overly exposed. When done correctly product placement can add a sense of realism to a movie or a television show.

Product Placement is the process that integrates that integrates an advertiser’s product into T.V shows and movies for clear on screen visibility. It is the part of rapidly expanding entertainment industry reaching millions of people through movies, television and videos.

Brands and popular Indian cinema have aligned quiet famously, and the trend of in-film advertising is gaining ground as producers and advertisers see long-term benefits. Now, advertising agencies also see film advertising as a big revenue-earner and a way to build big brands.

Media and entertainment industry is arguably going through a fast growth phase; it is a golden opportunity for the various brands to latch on to the chance to take the charge of positioning their brand in the right way. Understanding the mindset and motivations of this emerging section “The New Age Indian Consumer” is the key to success. The amateur film market has seen an encouraging growth

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of about 10% in the recent times and is looking far more promising and lucrative, than expected. It just depends on the new age marketers to position their brands competently and nattily. The new generation is no such an exception, but its different and very much alert about the happenings around.

Positioning of the brand would exorbitantly depend upon the purchasing

power

consumer as well.

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and

entertainment

spending

habits

of the

RESEARCH MODEL The particular research model focuses on the two main aspects of entertainment industry, i.e. Television Soaps and Movies. The chart below would give a better understanding: -

PRODUCT T.V. SHOWS -

MOVIES

Soaps,

Game

Endors ements

Shows -

Ad

-

Commerc

Bollyw

ials

ood

-

-

Celebrity

Hollyw ood

15

Celebrity

16

Endo rsements

TELEVISION SHOWS: In

recent

times

the

winds

of

change seen in Indian market place

in

recent

times

have

brought

a

clear

shift in consumer behaviour.

The

misconceptions

of

everlasting

loyalty of that

the

marketer

basic

consumers product have

and

enjoyed

service have

finally ended. However the Indian market

has

completely

transformed and consumers are now loyal to ‘perceived value’ and not necessarily to brand.

BRAND LOYALTY PERCEIVED LOYALTY:

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VERSUS VALUE

Consumers

are

more

loyal

to

‘perceived value’ than to ‘brands’. If a product without fail delivers ‘perceived value’ over a phase of years, it may arrive at brand loyalty. But this cannot happen before Perceived Value Loyalty. Perceived

Value

Loyalty

is,

therefore, more important index in today’s context. There

are

six

reasons

why

consumers make decisions in the branded

sector

‘perceived

value’

based and

not

on just

price. In fact ‘perceived value’ wars

work

in

brands

for

the

reason that they are fought for the mind and heart of consumers. Price wars do not work in the branded division because they are fought mainly in the short-term trade and pocket level.

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It's

been a through thing in the

west but, as with quite a few other innovations in the media, Indian television is just about waking

up

to

the

thought

of

plugging brands in small screen programs in a big way. In the age of clutter and meager recall, can a brand name meet the expense to hang around in the sidelines for its twenty seconds of fame? Advertising did try to hop out of the well - there are instances to sustain that - but is it showing? If yes, where? If not, why? It appears that, either the concept is a non-starter or, possibly, it is happening

but

away from

the

media defiant stares. Then again, there are layers underneath the first coat. All the same, the core rules

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of the game

are

pretty

simple - like they always are. In television,

as

in

films,

brand

placement is a function of a very fundamental question: What's the big idea?

“Show me honey!”

the

money,

‘It is always about the money and big money is all about the big idea. A big idea can command up to 100 per cent premium over regular

ad rates

applicable

to

commercial breaks.’ Now, that it is fairly clear that the perceived value loyalty has scored over the brand loyalty, let us look into the following case studies in support of the above statement.

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Case Studies:



Brand positioning in the game shows



Jassi

Jaisi

Koi Nahin! 

Indian Idol

The case studies discussed further has

become

debate

topics

the at

educational maximum

‘B

schools’, mainly because of the products

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placed

in

the

programmes, shows and the ads aired

during

breaks

are

anticipated of having maximum brand

recall

among

the

consumers.

GAME SHOWS

KBC

KBC:

KHULJA SIM SIM Kaun

Banega

Crorepati: Talking about KBC and talk not talk about Mr. Subhash Chandra would

be

injustice.

Subhash

Chandra was an undisputed king of T.V. till late nineties. He had a deal

with

Star

prohibited channel

Network

Rupert to

that

Murdoch’s

telecast

Hindi

programs. Star was free from

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bondage

in

television

2000

history

and

created

that

is

still

unfolding. A laggard behind the market

leader

and

hugely

successful Sony, Star had become a channel that housewives used to watch

only

when

surfing

channels

they

out

of

were sheer

boredom. Then

came

Bachchan

and

along Ekta

Amitabh Kapoor

of

Balaji Telefilms catapulted Star into

unheard

of

success

in

cluttered market. From out of the blue,

Peter

Mukherjea

and

Sammer Nair of Star unleashed a double whammy on prime time viewers that had been dominated by Zee and Sony. At 9PM it was Mr. Bachchan in a new avatar that simply wowed India with a phrase like ‘Lock kar diya jaye’ in KBC. This was followed by what is now

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known

by

saas-bahu

paradigm

when ‘Kyunki saas bhi kabhi bahu thi’ and ‘Kahani ghar ghar ki’ hooked viewers like never before. Marketers also soon realized the importance of the shows being aired on different channels and were able to place their brands not during the commercial breaks, but very much inside the show where they could achieve 80% of the targeted customers. Well, all we can say that it was just

the

start

of

another

beginning, a start of war among the channels, a beginning of a confrontation among the brands. On

conducting

the

conclusive

research with the different age group consumers the brand recall for the ICICI bank in KBC topped the list among the other game

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shows on television. Principally, there are two factors in play that decide

how

remunerative

the

placement is - the involvement of the brand in the TV show and the ratings

that

the

program

commands. A brand that is actively talked about or visually positioned by the actors commands better rat Big ideas seen on television in the recent and not so recent past have been the positioning of ICICI bank in ‘KBC’. There were cheques to be signed by one bank or the other and ICICI, perhaps, found the right opportunity

at

the

right

time.

That's a big idea and as bright as it gets. Besides ICICI, the brands endorsed by the host of the game show, our very own Mr. Amitabh Bachchan are bombarded during

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the commercial break. Being high on

TRP

ratings

irrespective

other of

brands celebrity

endorsements, pitch and shell out high

price

to

get

the

utmost

visibility.

Brand positioning may look like a tempting there's

pie

in

television

more

to

the

pie

but than

meets the eye.

In quick span of time, Star Plus has gained immense popularity and

viewer

ship

among

competitors. An in-program placement

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definitely

has

the

more

exposure

commercial

vis-à-vis

breaks

the where

audiences begin surfing. But the concept has to be very carefully built-in, in order to maintain the dominance over the competitors. If not done with in the norms, it could just be an added liability, e.g.

‘Khulja

exceptional

Sim

podium

Sim’, for

an

brand

placement but bigger clients like automobile disinclined

maker to

products

as

preferred

to

were

position

their

rewards.

They

stick

to

the

commercial breaks. The not-soregular advertising clients like Hi Design were the ones that came up with gift hampers and such.

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Jassi Jaissi Koi Nahin…! The

Indian

fraternity

television

has

exponential

seen

rise

an ever

since satellite television first came to India. On

consulting

Nina

Jaipuri

-

Assistant VP, Marketing SET India Private Limited

Today, though cable access is only about 50 per cent (according to various industry educated guess), this category of people is defined as the “consuming class” in India. By 2002, the share of cable & satellite television was 86.9 per cent of total television advertising as against a too little 31.3 per cent

in

1994.

The

count

has

reached over 90 percent till date,

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crediting the expansions of media in recent past.

Hindi

general

entertainment

television is the energy for growth in the television business with a 62.8

per

cent

share

of

total

viewership and an even higher 74.6

per

cent

share

advertising returns.

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of

total

Sony Entertainment Television is a key player in this space and has been

a

constant

and

strong

number two behind Star Plus. The other

contenders

are

Zee

TV,

Sahara TV and SAB TV. Star Plus had established a clear dominance over

Sony

Television.

Entertainment

(Star

Plus

average

range of Television Ratings (TVRs) approx 13.2 TVRs, as compared to Sony Entertainment Television’s 1.3

TVRs).

Besides,

Sony

Entertainment Television was now perceived as a “me-too” to Star Plus.

Understanding Women: Sony

Entertainment

Television

specially made research among women, the chief target audience for

the

channel.

“Understanding

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The the

research woman”

conducted in seven cities across India

provided

helped

insights,

which

define

its

content/programming

tactic,

which is, “To provide intelligent and innovative entertainment to its viewers”.

These women were looking for something routine

dissimilar

kitchen

from

politics

dominated

the that

television

programming.

The

challenge

therefore was to generate and sell a

different

going

past

dramas.

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viewing the

alternative,

clichéd

family

The Marketing Challenge: Traditionally, television advertising has always been about huge, bold poster

advertising

depicting

glossy lead actors shouting down at you from billboards. In this case, the protagonist “Jassi” was less than ordinary to look at yet was truly beautiful if you met her. The challenge therefore was how do we get viewers to sample the show?

Marketing Strategy: As in the old adage, we decided that we will not give the viewer an opportunity to judge a book by it’s cover — therefore never show Jassi in any pre- and post-launch promotional material and activity until we get a critical mass to sample the show. Also keeping in mind the Indian culture, a literal

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translation of “ugly” was unlikely to cut ice with the viewers. Hence Betty was transformed into Jassi and her extraordinary qualities were played up. Like Jassi, her marketing was also unique.

The primary goal was to fuel inquisitiveness

about

Jassi and

build endearment for her as a personality, by giving the viewers different facets of her qualities. The desired response was, “I’ve heard so much about her, now I can’t wait to meet her.” In addition Jassi merchandise was now being made available - the ring tone download being the first in

a

series

of

items

to

be

launched. Sony

Entertainment

Television

share of the 9.30 pm slot is up from 8.2 per cent prior to the

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launch

to

32.4

per

cent

by

December, within three months of launch, and still growing. Star Plus is down from 81.8 per cent share to 62.6 per cent share.

Along Came The Spider! The advertiser response has been so overwhelming driving slot rates up by 50 per cent. The show today has a full house of 12 sponsors as against the single one when it launched. Every brand wanted to get associated with show and the artist. But, different brands were selected matching the script and situation in order to avoid the clutter. Currently twenty five percent cost of the show has been

earned

from

the

endorsements. To name few Satya Paul, Maruti Udyog Ltd., Tanishq Jewellery are some of the brands

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associated with the show. Leaving the brands, the film fraternity was exorbitantly impressed, that the ultimate king Mr. Yash Raj Films promoted there film Hum-Tum on the episodes of the programme. If people

can

remember

Saif

Ali

Khan meeting Jassi in a well fitted role of two episodes of the show. Marketing a film on a show was itself a trend-setting step as the viewership

shooted

up

tremendously for the particular episodes and the show was one of the most talked about in daily gossips.

Hence it was proved that brands have certainly got an immense scope, whether be it a product, service or as a matter of fact a movie

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too

in

an

attempt

to

achieve

maximum

visibility

today’s cutthroat competition.

36

in

Indian idol hits ad revenues of Ekta Kapoor shows: Backed

by

sky-scraping

TRPs

reality talent hunt show 'Indian Idol,' aired on Sony Entertainment Television succeeded in hitting ad revenues of ‘saas bahu’ soaps aired daily on Star Plus channel of Star

TV.

advertising

The

Rs

returns

1,750-crore bazaar

for

Hindi daily soaps has stooped by about five percent in the last few months.

Apart from the grand finale, when it was the second most watched show on television after Star Plus' Kyunkii Saas Bhi Kabhi Bahu Thi, the

programme

has

been

has

been consistently achieving high TRPs since the first show was telecast.

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Indian

Idol

maximum

garnered

viewers

in

the

Mumbai,

Delhi, Kolkata, Gujarat, Punjab, Maharashtra,

Madhya

Pradesh,

Uttar Pradesh and West Bengal. Figures revealed by V.P. Marketing on Sony said, that 53 per cent of the total TV audience in North, West and East India watched the final episode of Indian Idol. The show saw a consistent rise in the ratings and viewership, resulting in

raining

sponsors

Entertainment.

38

for

Sony

With the success of Indian Idol, market analyst say daily soaps may be losing their esteem as viewer fatigue has set in. The broad invention categories that are advertised in daily soaps are FMCG, banking, automobiles, food & beverage, telecom and lifestyle. It was said to be the highest viewership time at the time of Indian idol and the bidding for the spot

went

in

crores

for

the

marketer’s

On the day of the finale of the Indian Idol programme TRPs of other entertainment also took a hit. The channels that lost the maximum entertainment

viewers channels

were (Star

Plus) movie channels (Star Gold, Zee Cinema) and news channels (Aaj Tak, Star News, Zee News).

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Now it remains to be seen if Sony can sustain these TRPs with the second coming of the Indian Idol.

Zee TV has number 2 position in prime time band, with 5 out of 10 programmes. It is at number 1 position in 7.30 p.m. to 9.30 p.m. band

and

has

a

very

strong

presence in 8.30 p.m. to 9.30 p.m. band. Overall, during 8.00 -9.00 p.m. slot, Zee TV is at number 1 position, followed by Star and Sony at Number 2 and 3 respectively.

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The network share of the various channels is as under

2004 Zee

27%Network Share

Star

19%

Sony

23%

DD

22% (Source:

Sony Television)

Market share details Channel

Market Share

Zee Cinema

62%

Zee News

33%

Zee Music

11%

Star

24%

SET

21% (Source:

Sony Television)

REVENUES

41

Revenue Break Up

2003

2004

Advertising

74%

78%

Subscription

21%

20%

Others (mainly

5%

2%

100%

100%

Education) Total (Source: Sony Television)

Advertising revenue continues to be main source of income for network, which earned Rs. 722 crore in FY 2004 (Rs. 642 crore in FY 2003). Though competitive environment had impact on viewership of network, advertising

revenue

demonstrated

positive growth of 24%.

Though the companies has increased advertising rate in prime band slot. But,

still

it

is

getting

more

advertisements mainly due to higher reach and viewership has constantly increased the sales of the products. The credit cannot be taken away from the marketers for placing their

42

product or brand at the right time and spot efficiently and consistently.

TELEVISION

SCENARIO

IN A NUTSHELL:

It

is

clear

from

the

above

discussion and analysis that small screen viewership and exposure has not only opened the doors for the marketers to showcase their brands but also given them a fair chance to get noticed and hit the consumers with heavy impact of brand

reconciliation

time

and

again. Placement of brand still remains the top priority in order to have an effect of recall on consumers, in order to match the fierce competitors in the market.

On

interacting

with

different

marketers, it was noted that more than selection of a show or a soap

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consumers are more perceived by the

characters

endorsing

the

particular brand. Taking character Tulsi (Smriti Irani) of soap Kyunki saas bhi kabhi bahu thi, since the time the actor has endorsed the brand not only it has increased the brand recall, but also has become

a

household

product,

simply because of the positive influence of the character on the viewers of the No. 1 show on star plus.

This indicates the importance of, first the popularity of the show for the

purpose

of

getting

the

particular brand noticed, second convincing the consumers about the credibility of the brand by their favourite star on television. This

is

just

one

example

for

understanding, but as we know

44

the commercial breaks are loaded with

stars,

sports

icons,

celebrities etc. at times making the

whole

confusing

area and

of

advertising

difficult

for

the

customers to make an ultimate choice. Hence it makes it all the more

important

facilitators

to

for

the

place

brand

name

by

analyzing all the prospects of the show.

Taking

the

perspective industry

international

of

the

the concept

Television entirely

differs from the Indian market, from

programmes

revenues.

The

to

star

concept

to of

perception of the consumers also varies, and it’s nothing to do with the language. The key role is played

by the

system of pay

channel that is incorporated in

45

West. All the viewers have to pay a stipulated fee for watching a particular

show

on a channel,

whereas there is no such fee or if there is, its just a nominal fare paid to the cable operators. This makes a huge difference on the viewership on both parts of the world.

For instance a show like ‘Friends’ that carried on for years in the west, had no takers, no sponsors or

brand

programme.

promoters

in

the

Considering

the

same situation or same kind of show in India the show would have been loaded with brands from the attire of the characters to the each and every accessory or products used in the serial. The basic

difference

probability

46

and

comes risk,

in

the

which

promoters would have faced in West

and

in

India,

as

the

probability of seeing the show in West

is

phenomenally

comparison

to

India

low or

in

as

a

matter of fact in Asia. Therefore, as

the

market

differs

promotional

the

strategy

automatically gets an alteration.

Similarly,

there

is

a

huge

difference when we take the film industry as the area for promoting the brand or a product, which is discussed in detail in the project.

47

48

The film industry is one of the most competitive industries in the world, ruled by public opinion and susceptible

to

popular

whim.

Whether it be Hollywood or be it Bollywood, entertainment remains the fuel for driving any industry. Today both world cinema have come a very long way, and has improved as each day has passed by. Harry

Davis

opened

the

first

nickelodeon, a small storefront theater or dance hall converted to view films, in Pittsburgh in June of 1905, showing The great train robbery.

Urban,

working-class,

foreign-born, immigrant

audiences loved the cheap form of entertainment

49

and

were

the

predominant cinemagoers. Onereel

shorts,

silent

films,

melodramas, comedies, or novelty pieces were usually accompanied with

piano

playing,

sing-along

songs, illustrated lectures, other kinds

of

'magic

lantern'

slide

shows, skits, penny arcades, or vaudeville-type

acts.

Standing-

room only shows lasted between ten minutes and an hour. The demand for more and more films increased

the

volume

of

films

being produced and raised profits for their producers.

An Overview: Knowing the age of the industry, it has certainly come a very long way since 1930. With 21st century initiating innumerable brand new

50

innovations all round the globe, film fraternity has also moved into the new and hi-tech world of cinema

with

hi-fi

technology.

Talking about anything relating to business, West has always been ahead from Asia or as a matter of fact been a world leader. Movies are also no exception in this case, it has been extremely superior and quick in its growth and

expansion.

It

has

always

been a complete entertainment for the audiences and the number has always increased with time. The film production has always been one of the most bloodthirsty industries in the humankind, ruled by

community

outlook

and

vulnerable to popular whim. The idiosyncratic

style

of

American

films repeatedly ranks ahead of European

51

productions,

which

often are deficient in the panache of their American counterparts. Despite some critics claiming that American

films

have

oversimplified plots aimed at the mass

indiscriminating

audience,

American films have a proven worldwide petition. The

European

film

market

is

comparable in size to that of the U.S.

domestic

market.

The

number of films produced in most European climbing

countries and

an

is

now

increase

in

demand benefits the U.S. film industry. For the past ten years, the film industry in France has established itself

as

the

largest,

most

successful film market in Europe, with France as the leading film producer

52

(134

films

were

produced in 1996, up from 124 in 1995). France is also Europe's largest film-viewer market with a total of 4,419 movie theaters. In 1997, total sales amounted to nearly USD 800 million. French films represented 37.5 percent of all revenues, up 11 percent from the previous year. U.S. films were seen

by

70.3

representing

a

million

people,

steady

market

share at 52 percent. 51 million people viewed French films.

53

MARKET HIGHLIGHTS BEST PROSPECTS

&

* Market Profile Despite

severe

across

Europe

unemployment and

recent

economic difficulties, the French movie market continues to grow. In

2000,

increased,

box-office reaching

USD

sales 51.5

million as a result of 9.1 million new

movie

admissions.

The

French movie market is at its strongest since 1987. This can be in part accredited to the success of

huge

American

productions

such as "Independence Day," as well as to increasingly profitable French comedies. French market information

can

easily

be

accessed through the state-run Centre

Nationale

Cinematographie which receipts,

54

monitors assures

de

(CNC)(source), box

office

distributors

accurate box office revenue, and reports on market trends. As is the case in the United States, the French film industry enjoys financial and infrastructure support

from

comparison

other

to

media.

other

In

European

countries, the French film industry has

greatly

profited

relationship

with

pay-per-view television.

from

video,

and In

its

cable,

standard

1995,

French

television networks (including the pay-TV

channel,

Canal

Plus)

showed well over 1000 feature films.

Since

the

late

80's,

television stations have become an important source of financial support

for

the

French

film

industry. In 1995 for example, 9 percent of total sales by Canal Plus went to support the industry, not

55

including

other

significant

production projects financed by the

pay-channel's

subsidiary,

Studio Canal Plus. In addition, the four

major

national

television

stations (TF1, France2, France3, and M6) are required by law to invest a minimum of 3 percent of their

total

industry

sales

and

to

in

the

film

broadcast

a

minimum of 60 percent European films. These stations spend over USD 70 million each year on purchasing the

rights

Despite

to

strict

American regulations

films. and

attempts to limit the number of foreign films entering the French film

and

television

markets,

interest in satellite-TV is growing and

should

detractors,

offset sustaining

demand for American films.

56

these high

Following the lead of the United States,

France

considerable

seen

development

megacomplex

theaters,

multi-screen centers

has

of huge

entertainment

with

more

than

1500

seats and often housing cafes, video

games,

bars

and

restaurants, in addition to the traditional movie theater set-up. Since 1993, Gaumont, UGC and Pathe have built approximately 30 megacomplexes here. This panEuropean

trend,

in

part

responsible for a relatively recent partial

renaissance

attendance,

is

in

movie

expected

to

continue in the future as these megacomplexes considerable

potential

have in

the

French market. As

megacomplexes

helped

redefine and reinvigorate French

57

moviegoers' behavior, so has the renovation

of

older,

existing

theaters over the last four years. Many movie theaters in France had become dilapidated, thereby discouraging

moviegoers.

As

a

result of renovation efforts and the

construction

of

megacomplexes

mainly

concentrated in urban areas, the French film market has curbed a decline in movie attendance and regained some of its lost strength, particularly

in

the

European

context. Paris

proper

is

the

grossing

area

in

American

movies.

highest-

France Other

for

urban

centers such as Lyon, Bordeaux and Marseille show an interest in American films, but follow Paris at a distance.

58

In

1996,

video

publishers

in

France grossed USD 616.7 million, according to the Video Publishers Association 80

(SEV),

percent

of

representing

all

publishers.

Nearly two-thirds of SEV member turnover came from direct video sales, representing more than 90 percent of total turnover.

* Statistical Millions

Data

in

USD

Avg. Annua 2001 2002* 2003* Growth Rat For following 2 years

59

Import Market

468.9 501

523

4%

Local Production

355.6 362

373

4%

Exports

70

74

4%

Total Market

754.5 791

823

4%

U.S. Imports

407

443

452

4%

Exchange Rate used: 6.0

6.1

6.5

72

* Estimates Inflation Rate Assumed: 2.5% Estimated 2001 Import Shares: (in percent)

Market

United States: 88.4 U.K.

3.6

Italy

3.1

Germany

2.4

Belgium

1.1

Others

1.4

Receptivity code (1-5): 5 Range: 5 (extremely receptive) to 1 (not receptive) The popularity of American films is firmly rooted in French culture. Market

demand

for

U.S.

films

promises to remain constant into the next century.

* Best Sales Prospect American action films, animated films, and adventures continue to

60

be the three most popular genres among French moviegoers. Large budget American action movies such as "Independence Day" have traditionally been very successful in the French market. The biggest film successes in the U.S. are also moneymakers in France. Having followed, national ratings of U.S. movies, media,

usually French

through moviegoers

the are

often already aware of American films

before

their

release

in

France. Co-productions partners

can

be

with

French

an

effective

method for U.S. companies to increase

their

market

share.

Employing this method would be particularly

suitable

independent producers

for who do

not have the resources to carry out

61

the

necessary

marketing

campaign

needed

to

attract a

French audience. In addition, coproductions can be used to evade French claims regarding American domination of the European film market.

The

CNC

officially

considers

co-productions

to

be

French films. It must be noted, however, that co-productions, in any country, are often logistically difficult. The French market for American independent

films

is

meagerly

developed.

Distribution

and

marketing efforts of major U.S. film

companies

barriers

for

have

created

lower

independent

budget

American

film

producers. In

addition

financial enter

62

to

the

resources this

significant needed

market,

to

French

moviegoers sometimes view U.S. films as being too "action-based" and as "lacking dialogue." Despite these obstacles, independent U.S. films may be able to tap into a relatively unexploited art cinema market, primarily in and around Paris and in other important urban centers in Southern France, such as Marseille and Lyon.

Particularly in Paris, theaters are the beneficiaries of government and municipal subsidies designed to preserve and revive the French film industry, thereby providing a good

environment

for

independent films. U.S. companies have been able to establish themselves firmly in the French

video publishing

sector,

valued at approximately USD 700

63

million. American video publishers are

expected

to

continue

to

dominate this market as the next century draws near. U.S. video companies should be particularly aware of high market demand for special-interest

videos,

which

represent a significant turnover in France. The rental video market, however, has showed only modest gains over the last 8 years and remains underdeveloped. France offers an untapped

market

companies

in the rental video

sector.

for

Companies

U.S.

such

as

Blockbuster Video and Hollywood Video have been able to penetrate other European markets, but have seen

little

Despite

success

regulations

franchising management,

64

in

and U.S.

France.

governing store video

companies entering

should and

consider

developing

the

French video rental market.

B. COMPETITIVE ANALYSIS * Domestic Production French movie market flourished with

more

than

51

million

admissions and proved to be a record year. With the success of films

like

"Pedale

Douce",

"Le

Jaguar", "Les Trois Freres" and "Le Bonheur est dans le Pre.” the French movie industry enjoyed a market share of 39.5 percent. This represents a slight increase from previous years, but does not signify a reduction in U.S. market share or dominance. French film production remained at a high level with 134 films on

65

an investment base of USD 550 million, a slight drop from 1995. French

investment

stayed

relatively stable, whereas foreign investment

declined

percent.

Of

produced

in

the 78

by

19.1

134

films

percent

were

French-initiative films, totally or principally

French-financed

productions. On the other hand, French coproduction

films

represent

a

marginal 15.5 percent of boxoffice

receipts.

Co-productions

have continued to increase over the last 15 years, but have not fared as well as single-country financing projects. Co-productions have typically been plagued by prohibitively

66

high

costs

logistical

complications

from

the

and arising

unsuccessful

management

of

the

inherent

cultural and legal difficulties. * 3rd Country Imports Third country imports constitute a negligible portion of the French film market. British, Italian and German

films

figure

most

predominantly in this market with a

9.1

percent

market

share,

generating USD 1.3 million from admissions.

U.S. Market Position: The U.S. film industry plays the most dominant role in the French market. U.S. films represented 54.3

percent

of

all

box-office

admissions. A fiscal and financial

67

environment conducive to rapid and

effective

technological domestic

film

superiority,

demand

established

production, strong

and

and

an

efficient

production network buttress U.S. market dominance. U.S. films have consistently held about

55

percent

of

French

market. This trend promises to continue into the next century. On average, Americans watch 4.7 films per capita in a movie theater each year, compared to 2.2 films per capita in France. In addition to heavy demand in terms of boxoffice admissions, the U.S. film industry

benefits

from

well-

developed home video, pay-perview and cable TV markets.

C. END-USER ANALYSIS:

68

France's (4,519

2,139

movie

theaters

screens

and

952,137

seats) showed a 5 percent gain in admissions

reaching

136.24

million. While Paris is home to less than 4 percent (2.2 million) of the French population (58.5 million),

the

city

approximately French

20

moviegoers,

attracted percent with

of 26.2

million admissions. Other urban centers with more than 100,000 inhabitants, university towns and the

Southeast

of

France

also

enjoyed high movie attendance rates.

Cities

with

more

than

100,000 inhabitants represent 11 percent of France's population. Admissions

to

French

movie

theaters can be divided into three main time periods, but remain relatively through

69

high April.

from The

October

months

of

October-December generally see the highest admission rates, with an average of 14 million tickets sold

per

month.

During

summer

(June

September),

movie

drops

to

only

the

through attendance 8.5

million

admissions. Moviegoers can be divided into two

categories:

occasional

moviegoers.

moviegoers movie

regular

see

per

at

and

Regular

least

week,

one

whereas

occasional moviegoers generally see no more than one per month. Regular moviegoers represented only 33.6 percent of audience market share, but accounted for 73.1

percent

of

all

movie

admissions in France. Eighty five percent of moviegoers are aged 6-24, representing 26

70

percent of the French population. But accounting for 40 percent of movie admissions. The 20-24-age group accounts for more than 18 percent of admissions but only 7 percent of the population. The 2550 age group constitutes nearly 40 percent of France's population and also represents 40 percent of attendance. Education plays a significant role in the behavior of the average French moviegoer. In 2002, 80 percent of all moviegoers had some form of higher education and saw an average of 7.5 movies per

year,

compared

to

a

4.6

national average. Conversely, only 40 percent of agricultural and blue-collar

workers

go

to

movies each year in France.

71

the

D. MARKET ACCESS * Import Climate Industry

experts

predict

that

public demand for American films will

continue

to

grow

despite

significant French market barriers. The general sentiment within the French government appears set against

the

massive

influx

of

foreign films, mainly American. As a

defensive

measure,

the

government has created special funds to finance production of French

movies

and

television

films.

The 1989 EU Broadcast Directive requiring a "majority proportion" of

TV

programming

to

be

of

European origin was incorporated into French legislation in 1992.

72

France,

however,

percentage

specifies

of

a

European

programming (60 percent) and French

programming

(40

percent). These broadcast quotas were less stringent than France's previous quota provisions, which required that 60 percent of all broadcasts be of EU origin and that

50

percent

produced

in

percent French

be

France.

originally The

European/40 television

60

percent

quotas

are

applicable throughout the day, as well as during prime times slots. The prime time rules go beyond the

requirements

Broadcast

of

Directive

the and

EU limit

access of U.S. programs to the French market. Nevertheless, the market

share

remains

high.

of

U.S.

Major

films

industry

players in France emphasize that

73

the development of the business side of films & videos will do more to revive the industry than any system of quotas.

*

Distribution/Business

practices The

top

ten

distribution

companies in France accounted for

nearly

89

distribution Gaumont

percent

revenues,

Buena

Vista

of with

claiming

first place at 19.8 percent. All of the major U.S. film companies have

offices

staffed

in

with

France,

often

distributors

responsible for negotiating with French

movie

distributor

must

theaters. take

care

The of

production, marketing and actual distribution. Distributors have first

74

claim to box-office receipts, which can be as high as 39 percent.

* Financing In

France,

the

CNC

(Centre

National de la Cinematographie) is responsible

for

allocation

of

government subsidies to the film and television industries, as well as for coordinating grants from the Ministry of Culture. There is generally a two or threeweek

lapse

between

the

time

accounts are rendered at each movie theater and payment is made to the distributor. The U.S. Export-Import

Bank

offers

a

credit-plan through the Foreign Credit

Insurance

Association,

which allows foreign buyers to

75

delay payment and pay off the original investment.

When

multiple

translate

into

tie-ins

film

clutter,

marketers seek other ways to lash

themselves

to

the

product. Cross promotions have become a staple in movies, particularly in summer blockbusters, but no one has

devised

a

system

to

determine what, if any, return on investment they provide.

76

Marketers recently have learned what doesn't work, though, so they

are

rethinking

their

strategies when partnering with films.

"When you get it right and match up

a

film

property

that

has

current cultural significance with a product that has brand equities that relate to that property, as a general matter, you get increased presence

in

stores

increased

volume,"

and says

see Frank

Cooper,

V.P.

promotions,

interactive

and

entertainment

marketing at PepsiCo Inc. "You can see by the sheer number of films we've associated with that, for us, it works."

77

When co-branded film promotions are

executed

well,

everyday

products can take on a hip aura. Packaged-goods companies create exciting retail presences that can drive up sales, and other types of companies like car manufacturers are able to track sales increases to their movie tie-ins. Realizing this,

advertisers

generally

are

willing to spend tens of millions of dollars

on

multiplying

movie

tie-ins,

their

own

expenditures many times over by riding the media wave created by studios that often are spending upward of $50 million on their own marketing campaigns.

But success is a hit-or-miss affair --

some

enormously

78

tie-ins well,

go while

over others

disappear into the ether -- and recently, marketers have devised their own benchmark for success. Marketers minimum

say of

that

three

while

a

promotional

partners is needed to turn a film opening into a big event, anything over 10 partners is excessive. Tom

Meyer,

entertainment

president marketing

of firm

Davie-Brown, says three to five partners on a tent pole film are ideal.

"Over the last five years, the studios have gotten greedy and brought

on

many

partners,"

Meyer notes. "It becomes hard for them to manage and overkill in the marketplace. Studios should be looking at these opportunities as a way to go deeper in their relationship with a brand, rather

79

than go broader with a whole bunch of brands."

The Coca-Cola Co. recently has scaled back the numbers of its film

promotions

promotional

to

dollars

ensure are

not

getting lost. "It needs to link to the dead center of what our brand positioning is; if it doesn't, we're not going to do it.

A souped-up Wrangler Rubicon also co-starred with Angelina Jolie in

2003's

"Lara

Croft

Tomb

Raider: The Cradle of Life." After the film's release, the automaker saw a 15% increase in sales. It was done because it helps the Jeep brand build pride by being a natural part of popular culture,"

80

Packaged goods, however, often are difficult to incorporate into story

lines.

current

frenzy

integration, other

So,

despite over

marketers

ways

to

the brand

look

connect.

for

Darth

Vader won't be seen chomping candy onscreen, but M&M's has a tie-in with "Revenge of the Sith," daring consumers to go to the Dark Side with the first-ever darkchocolate M&M's and creating a parallel universe of animated and toy

M&M's

dressed

up

as

characters from all six "Star Wars" films. "Our

goal

is

an

integrated

consumer experience, and that doesn't necessarily have to come with product placement.

81

Coca-Cola

and

focusing

on

Pepsi

also

making

are their

connections

outside

a

film

by

creating promotions that tap into the essence of the movie and its characters, says

it

though

pushes

for

Coca-Cola integration

whenever possible. The company adds that it has made it clear to the studios that it won't do a movie tie-in if a competitor is featured in the film.

But while brands such as CocaCola

and

Pepsi

are

becoming

more demanding and selective in their movie tie-ins, one thing is certain: Film promotions remain a popular and effective marketing tactic, even when an advertiser fails to win a much-coveted role in the movie.

82

Language barriers: Is only one hurdle in selling foreign films to American audiences

The strategy was simple: Screen the picture at three major film festivals,

target

younger

audiences with a zest for life as well as older audiences with a nostalgia for it, and buy spots on Latino television. Those were some of the principles Focus Features put into play after acquiring domestic rights to "The Motorcycle Diaries" at last year's Sundance

Film

Festival.

They

worked: "Diaries" hauled in $16.8 million at the domestic box-office,

83

the

second-largest

Spanish-

language takes in U.S. history.

Releasing foreign-language films is a risky business, especially in North America where they usually account for only about 1% of theatrical

business.

Marketing

such pictures requires precise and particular

skills,

but

Focus

marketing president David Brooks understands

that

a

crossover

market for such pictures is likely growing. "There are certain special movies that will cross over into a wider audience," he says.

"For

the

foreign-language

audience, you have to use your old-fashioned traditional mediums such as (major newspapers) and

84

then you have to look at (local) cable.

"Targeted" usually means limited to the biggest cities, where a run of 50 commercials on a carrier like Time Warner Cable can cost $30,000-$50,000.

85

An Overview: The Indian film industry is turning more optimistic. It is looking at touching new horizons and scale new heights. Most players are aiming

at

widening

their

operations and straddling across the entire value chain. For

veteran

filmmaker

Yash

Chopra, it could mean making more films in a year. For Subhash Ghai's Mukta Arts, it could mean setting up an integrated studio complex-cum-training

center,

upgrading

Adeus,

its

studio

implementing its portal and web casting

plans

and

setting

overseas distribution networks.

86

up

All these grandiose plans require money and muscle. Where does the moolah come from? Had it been

the

old

studio

system,

finance would not have been a problem. would

Internal have

production,

generation

sufficed.

With

distribution

and

exhibition under one umbrella, the system allowed ploughing back of money generated by the captive distribution units into production and related activities. However, in the new film industry economy that emerged after the collapse of the studio system, such funding failed to work to perfection. happened.

So,

the

inevitable

Financiers,

who

understood the dynamics of the industry, sprang up in scores. And they charged a premium for that. Says noted film maker Mahesh

87

Bhat: "The Sindhi and Marwari financiers had a field day because they had the ability to understand and negotiate the chaos of the industry, which the guys wearing ties in the bank could not." Therein

lies

an

irony.

Such

financing has worked quite well despite the usurious interest rates of the lenders. Says R Ravimohan, managing director of the Mumbaibased

Credit

Information

Rating

Services

of

and India

(Crisil): "People have paid such a price

and

have

still

survived

because the speculative nature of the business needed such people who could put up capital upfront." All this is changing now. The Indian film industry is biting the bait

88

of

corporatisation

and

attempting

to

professionalise

itself. Says Ravimohan of Crisil: "Globalisation is one major trend the Indian film industry has to contend with today. It is both a necessity and an opportunity." To

be

sure,

industry

has

beginning

to

the

Indian

film

responded

by

corporatise

itself.

There is greater recognition of the need to corporatise to be able to streamline operations and be an entity everybody would like to do business

with,

including

the

financial institutions and capital markets. Growing opportunities, including

overseas

audience,

needs to be tapped. All these imperatives

are

placing

fresh

financial demands on Indian film companies.

Financing options:

89

How

to

meet

these

The

moolah

demands?

financial has

to

come from formal sources. The informal

channels

of

finance,

including the underworld, which the industry has relied on ever since the collapse of the old studio system, would continue to be far too expensive. Technically,

film

entertainment

and

companies

have

now quite a few financing options available to them: equity (selling stock

to

financial

financial

and

institutions),

nondebt,

venture capital funds and foreign funds, among others. Companies such as Mukta Arts have already gone public with initial public offering (IPO). "The fact that these companies are going public proves that there is a

90

certain section of the investing public

which

is

interested

in

putting their money into these ventures." But this interest might wane.

A movie-making company is a riskier proposition from a debt perspective. There is a mismatch here:

a

certain

part

of

the

borrowed money has to be paid back

on

a

definite

date,

but

neither the quantum not the time of

the

cash

Uncertainty

flow

is

certain.

reigns

at

various

levels, at the distributor's, at the exhibitor's and everywhere.

A

typical

filmmaking

company,

which is going from one project to another, does not lend itself to the traditional ways of trend analysis or

91

track

record.

There

is

an

element of uncertainty associated with the success of a particular project.

There

is

no

scientific

method of evaluating either the quantum nor the timing of cash flows." Yes, the project may be a great success in terms of overall cash flow it generates, but even the promoter is in no position to tell up-front what will his monthly cash flow be.

The

conventional

financing

principles such as what exposures to have

and what debt-equity

ratios to have do not apply to film companies. You need to develop principles

of

financing

companies.

Venture capital:

92

film

At the same time, studios outside India have been able to raise debt because they are corporations and have steady cash flow streams from

projects,

properties

and

several other ventures. So, the solution

for

the

stand-alone

Indian film companies with standalone projects (read films) lies in diversifying their activities across the value chain, having a base cash flow and tangible assets, and so on. If one goes by its offer document, Mukta Arts is trying to do exactly that. By raising equity funds from public, it is trying to boost its net worth and thus offer a margin of safety to institutional lenders. Corporates such as Zee Telefilms are better equipped to raise debt if

93

they

are

to

get

into

film

production. "They have the equity, the net worth, tangible assets, advertisement support, the base cash flow and the necessary width of activities to cover the risk. However, what needs to be looked at is this: whether such steady cash flows are adequate to cover debt servicing. There might be some doubts over project-related debt, which is not dependent on the overall cash flows.

Overseas experience: How

are

films

financed

elsewhere in the world? Most houses

large are

conglomerates

US

entertainment

part that

of

huge offer

everything from movies to theme parks.

94

Over

there,

traditional

entertainment

companies

increasingly

investing

expansion

projects,

in

are in new

initiatives such as Internet-related ventures and even in acquisitions. Most of these activities are part of publicly owned companies. These companies have sold their stocks to raise funds for expansion and reducing their debt levels. Going public has also allowed them to cash in on their entrepreneurial efforts and diversify their assets. Direct financing apart, the Indian film industry needs a national film finance corporation whose equity is jointly controlled by financial institutions. Such a corporation can go public and get itself listed on the nation's bourses. All said and done, new financing options are bound to emerge for

95

the Indian film industry. But, first of

all

corporatise

and

professionalise the industry. That is a small but sure step.

Main Study: Till about the 1970’s most people believed

that

the

product

placement was unethical, but the realities of advertising and movie making has spurred Hollywood, and now Bollywood into product placement. Bollywood

isn’t

far

behind.

Industry sources have it that Mr. Subhash Ghai made 20 percent of the ‘Taal’ production budget just from Coca-Cola.

96

Rumours also have that he shot two sets of scenes, one with Pepsi and the other with Coke, and waved the carrot before both the Cola giants.

But product placement in Indian movies

is

much

older

than

Mr.Ghai. In An Evening in Paris, Sharmila Tagore was seen sipping delicately from a 200 ml bottle of Coke, struggling to make sure the logo

was

visible.

You

might

remember the Mafatlal hoarding in the middle of a song in Maine Pyar Kiya.

If you remember Awwal Number, the Dev Anand flick starring Aamir Khan- every time our hero hit a four, the ball bounced off a poster saying Garware! Coincidence?

97

In

Prem

Diwane,

an

entire

sequence with the then Ms Dixit was

shot

inside

the

famous

Benzer stores of Bombay. A lot of people unrelated to the story line are shown carrying Benzer bags. And

a

friend

of

mine

swears

having seen a song sequence in some movie, with the heroine dancing round giant columns of guess what - Emami Naturally Fair Fairness Cream! In recent times, Mc Donalds India has been quite active on the PP front. In Love Ke Liye Kuch Bhi Karega,

Mr.

Hero

strategically

holds a ball with the Mac ‘M’ on it, and just when you are about to overlook the Mac connection, you see all those girls in outfits that look

suspiciously

like

Mac

uniforms. Quite subtle. It wasn't so under-stated in Kaho Na Pyar

98

Hai,

when

the

oh-so-stranded

Hrithik Roshan flexes biceps etc and asks irritably, “McDonald's ka burger laaon kya?” Another direct reference is in LKLKBK.

Our

declares

finicky

heroine

she consumes

NOTHING but Domino's Pizza and Diet Coke. Eh? Products - brands actually - make a movie more realistic. It is that much more easier to bond with the stranded actors when Hrithik Roshan

mentions

McDonald’s

burger. Because that is probably what we’d say ourselves! Like Dil Chahta Hai, movies are getting as close to real life as possible. It would be unfair if we do not expose the other darker - greener - reasons. Producers need cold cash. If they are going to get it by

99

featuring

Snickers

or

Mafatlal

hoardings, they would. You

can’t

blame

the

poor

producers! Money eternally being in short supply, this is a great way to finance the film, minus the threatening

phone

calls

afterwards. And what do they lose? Mr. Hero would have been sipping some cold drink anyway would it hurt if it happened to be coke? At 3.5 crore, quite the contrary! Recently,

Naseeruddin

Shah

admitted to TOI that he's shelved most of his dream projects due to lack of finance.

Film

industry

unorganized

as

being it

is,

as

genuine

above-the-board funding is hard

100

to

come

by,

and

product

placement is a golden opportunity. Some

tie-ups

also

help

in

promoting the movie. The average marketing budget for a Hollywood flick is about $25 million. Most of this is spent in the 3-4 weeks before the release of the movie. Tie-ups mean that the movie is getting that shot in the marketing arm that could probably make or break the movie. The marketers think that it's costefficient. reaping

Pay the

once,

and

keep

benefits

at

every

show of the movie, or every time the kids get together and rent a CD, or the oldies celebrate their anniversary with a video, or a college movie club holds all-night movie shows. It also reaches a phenomenal number of people.

101

The

North

American

movie

audience is about 1.42 billion. Another

factor

the

marketers

bank on is the powerful influence of the medium. Movies have been typically blamed for most sins of society violence, sexual abuse, drugs, smoking - you name it, we have a politician who can link it to the

movies.

If

they

are

so

powerful that they galvanize an entire generation into the angryyoung-man mode, then they can surely sell a few cans of Stroh's? (Remember

the

great

Khan

talking at length about his plans to start a factory - Strohs - in DDLJ?) By subtly weaving a product into a

scene,

marketers

hope,

audiences will connect their brand with the glamorous stars or story

102

they're seeing on the screen. It’s a commercial of sorts - without the

obvious

hard

sell

of

a

commercial. It might not sound very nice - but quite obviously, the aim is to catch the consumer unawares, memory

to in

sneak her

into

moment

her of

vulnerability. An in-film placement is a hugely lucrative business and is raking in anything between Rs 5 lakhs and Rs 5 crore for film producers. A film - viewer has a short attention span. The best way to deliver the message is to catch the viewer off-guard

when

his

rational

defence is down. Appealing to viewers’ emotions is better than appealing

to

thought.

The

examines

the

their rational

rational gate

advantages,

benefits and features, and seeks

103

value for money; the emotional gate

is

all

about

identification

and

trust,

love,

belief.

Films

operate at the emotional level. Placing a product in a film is catching

the

emotional

viewer

at

an

when

he

can

level

connect with the brand. There can be synergies between brands and films. The successful integration of product placement within

the

film's

storyline

has

along history - the first example being the yellow Rajdhoot bike used

in

Raj

Kapoor’s

Bobby.

Hollywood also leveraged brands such

as

BMW

(Bond

movies),

Jaguar, Ford, Ray Ban (Tom Cruise in Risky Business and Mission Impossible),

Starbucks

AOL and AT &T.

104

coffee,

Right now, companies are willing to pay amounts ranging between Rs 50 lakh and Rs 5 crore for placing their brands in films, but it depends on the budget of the film. Big-budget films with big stars can expect more. The size of this advertising is expected to grow nearly 100 per cent in the next two to five years as more and more companies get attracted to this kind of advertising. In the recently placed ad for Castrol engine oil in film Chalte Chalte, the makers of the engine have reported tangibly increased sales of the oil after the film's release. The product seems to have connected on an emotional level with truck fleet drivers and owners. Ray Ban also benefited by its association with film Men in Black.

105

However it is also true that ads have to be carefully placed in a film and one bad placement can do more damage than 10 good placements. Artistic integrity is crucial

for

successful

brand

placements and the operation has to

be

woven

into

the

script.

Sometimes, unreasonable clients demand more footage although research has shown that a two-minute clip can effectively deliver a message in a credible manner. The placement should be woven into the fabric of the film and shouldn't

be

contrived

and

taken

into

during

the

unnatural. The

factors

consideration

negotiation stage include cast and credits, size of the projects and the

producers,

release,

106

brand

timing

of

impact,

the and

number of screens during release and

post-release

phase;

and

possibilities of brand associations through contests and promotions. Depending on the content of the film and its storyline, the agency can sketch a profile of viewers who would see the movie. Then the agency approaches all those brands that could appeal to the targeted viewers. This is followed by a 360-degree marketing plan for cross-promotions during the various stages of a film's release. Objections if at all could come up due

to

conflicts

regarding

a

certain star’s status as a brand ambassador. For instance Shah Rukh

Khan

could

technically

object to being associated with Coca Cola, as he is Pepsi's brand ambassador.

But

Kaante

was

associated with Thums Up and

107

Amitabh Bachchan is the brand ambassador of Pepsi but there was no conflict as Thums up was associated with the entire film and not one actor. Does it work? Well, now that's a tough question to answer. Research shows that 98%

of

the

total

audience

remembers at least one brand name after the movie. So Brand recall is definitely there. But does it actually boost sales? There

were

branded

toys

a

whole

host

featured

in

of Toy

Story. One such toy company Slinky,

which

had

folded,

was

back in business and sold $27 million after the movie release. Sales of Red Stripe beer increased by 53%, after Tom Cruise was seen slugging it in The Firm.

108

Industry BMW

sources

made

estimate

$240

that

million

in

advance sales alone, purely due to the

Golden

eye placement.

Reese's Pieces – the Hershey’s candy featured in ET - saw a phenomenal sales growth of 66%.

But the same cannot be said for every product. Primarily because it hasn’t been researched well to date.

Unless

marketing

majors

analyze the sales figures purely attributable to product placement, there's no saying if this works. There’s also, what we are going to term the Pass-Pass trap (Have you seen Yaadein? After seeing that movie - no, product-array is more like it - some have sworn they would never touch Pass-Pass again, even if it were the last

109

mouth-freshener left in the world, and they were on their dream date)

-

an

extreme

case

of

product placement that actually turns off the consumer. The idea that one would go out and buy a coke just because it is the object de l’amour on screen is quite

funny,

if

not

downright

ridiculous. Some experts agree, but they have more meat to their argument than personal opinion. They

argue

that

given

the

multitude of products seen in a movie, and the usual tying-upwith-the-storyline, audiences do not register the brands separately. That is, in their opinion, product placement

does

not

push

the

consumer from the awareness to the trial stage of the marketing life cycle.

110

But as with experts, there are others who disagree. They feel that

certain

market

age

groups

segments

vulnerable

to

advertising.

Like

are

this

and more

kind

the

of

rickshaw

puller in the second row during the late night show of Yaadein, who might go out and buy PassPass out of some sense of loyalty (for want of a better word!) to Kareena! Placing captures the essence of a new kind of selfhood. The idea is that the era of Branding is passe. Now

is

the

dawn

of

Placing.

People live with brands, brands that are a part of their day-to-day life. If they don’t, its up to you, the marketer to place your brand in their life... to twine it in so cleverly that they'll never know. To explain it better, we quote from

111

the site: “Just as most of us spend

more

time

with

our

coworkers than our families, it’s even more true that we spend more time with products than with people - and the relationships we build around these products are worthy

of

attention.

It's

the

interaction between the product and

the

person

that

we

call

placing.” Ahem! No doubt it's a powerful idea. But powerful ideas are like stem cells. They

need

to

be

grown

and

nurtured if you want to make something

of

them.

Product

placement has to go beyond a mere 10-second shot or even a 5minute exposure on the silver screen. It is no longer enough to see a brand on 70mm. Marketers need to take it beyond that. Also, marketers would do well not to

112

shoot in the dark, and place their brand in some flick as a kind of me-too thing without a definite strategy

and

without

knowing

what exactly the association can do for them. Coca-cola India is a case in point. The company’s market research apparently threw up a statistic that showed them the idea of family and bonding appeals to every Indian - no matter which market segment he/she belonged to. Now how do they go about appealing to the finer sensibilities of Indian youth, without mushing about it? Get someone else to do the mush - and who understands mush

better

makers?

This

company’s

than has

strategy,

the

masala

shaped leading

the to

extensive tieups with Bollywood blockbusters of the family and

113

bonding variety. They tested the waters with Taal, and went the whole hog with Hum Saath Saath Hain. The association was not restricted

to

placement.

mere

It

product

extended

to

promotion, sponsoring events etc. It helped that the company had a clear goal. The top promotion of 1995, as designated

by

the

Promotional

Marketing Association of America, was BMW's tie-in with Golden eye. And one of the great strengths of this promotion was to involve and entice

the

company's

retail

network to take part as much as was possible. BMW dealers have embraced

the

association

with

Golden eye, and, more recently, Tomorrow

Never

Dies,

helping

BMW to get maximum leverage from the deal. Again, note that

114

the company did not just stop with making.

115

FINDINGS OF THE CONCLUSIVE RESEARCH

1. Frequency movies.

of

watching

No. Of

Percentage ('x)

Respondents Once a month

87

42.4

Once a week

54

16.4

Fortnightly

32

15.6

Others

32

15.6

205

100

Total 

42.4% of respondents watch movies once a month

2. Place of watching movies.

Rank

Theatre

VCD/DVD

Cable

1

108

50

48

2

49

73

81

3

47

82

76

Total

205

205

205

Rank

116

Theatre

1

VCD/DVD

3

Cable

2



Majority of respondents usually watches movies in the theatres.

3. Usually watch movies with: -

No. of

Percentage (%)

Respondents Friends

112

54.6

Family

64

31.2

Spouse/GF/BF

20

7.8

9

4.4

205

100

Alone Total 

117

'

Majority of respondents usually watches movies with their friends.

Koi Mil Gava 1. Which beverage does Hrithik Roshan ask for at Preity Zinta's house? Bournvita Recalled Did not recall Total 

No. of Respondents

Percentage (%)

120

66.67

60

33.33

180

100

66.66% of respondents recalled the brand name, so the product placement of Bournvita was done effectively.

2. Which bicycle does Preity Zinta present to Hrithik Roshan? Avon Cycle

No. of

Percentage (%)

Respondents Recalled

50

27.78

Did not recall

130

72.22

Total

180

100



118

Only 27.27% of respondents recalled the brand name, so the product placement of Avon Cycle was not done effectively.

3. Which bike was awarded to the winners of the basketball game?

Hero Honda

No. of

Percentage (%)

Respondents Recalled

138

76.67

Did not recall

42

23.33

Total

180

100



76.670/0 of respondents recalled the brand name, so the product placement of Hero Honda was done effectively.

4. Which T.V. Showroom was shown in the movie? Sansui

No. of

Percentage (%)

Respondents Recalled

16

8.89

Did not recall

164

91.11

Total

180

100



Brand recall in this case was very poor. 91.11 % of

respondents could not recall the brand name, so the product placement of Sansui was not done effectively.

119

Baghban

1. Which tea does Hema Malini prepare for Amitabh Bachchan in the movie? Tata Tea

No. of

Percentage (%)

Respondents Recalled

68

37.78

Did not recall

112

62.22

Total

180

100



120

62.220/0 of respondents did not recall the brand name, so the product placement of Tata tea was not effective.

2. In which bank does Amitabh Bachchan work in the movie? ICICI

No. Of

Percentage (%)

Respondents Recalled

137

76.11

Did not recall

43

23.89

Total

180

100



76.11 % of respondents recalled the brand name, thus the product placement of ICICI Bank was effectively.

3. What was the name of Paresh Rawal’s Music Cafe? Archies

No. Of

Percentage (%)

Respondents

121

Recalled

63

35

Did not recall

117

65

Total

180

100



Only 35% of respondents could recall the brand name, so the product placement of Archies was not done effectively.

Which car does Salman Khan present to Amitabh Bachchan? 4.

FORD

No. Of

Percentage (%)

Respondents Recalled

70

38.89

Did not recall

110

61.11

Total

180

100

 Only 38.89% of respondents recalled the brand name, so the product placement of FORD was not effective.

Hum Turn

122

1.

Times Of India

In which newspaper was HUM TUM cartoon published?

No. of

Percentage (%)

Respondents Recalled

162

90

Did not recall

18

10

Total

180

100



76.11 % of respondents recalled the brand name, so the product placement of ICICI Bank was done effectively.

1. Which news channel covers the launch of Saif Ali Khan's book 'HUM TUM' in the movie?

NDTV India

No. of

Percentage (%)

Respondents Recalled

54

30

Did not recall

126

70

Total

180

100



123

Only 300/0 of respondents recalled the brand name, so the product placement

of NDTV India was not done effectively.

2. Which magazine does Saif Ali Khan read in the movie?

Vogue

No. Of

Percentage (%)

Respondents Recalled

68

Did not recall

112

62.22

Total

180

100



4.

Lays Recalled Did not recall Total

124

.

37.78

Only 30% of respondents recalled the brand name, so the product placement of NDTV India was not done effectively.

Which brand of potato chips was the cartoon character' HUM' eating in the movie? No. of Respondents 157 23 180

Percentage (%) 87.22 12.78 100



87.22% of respondents recalled the brand name, so the product placement of Lays is done effectively.

Average Recall

Koi Mil Gaya

No. of

No. of right

Respondents

Answers

Once

91

124

1.36

Twice

42

86

2.05

3 times or more

47

114

2.43

Total

180

324

1.8

No. of

No. of right

Average

Respondents

Answers

Once

106

193

1.82

Twice

44

81

1.84

3 times or more

30

64

2.13

Total

180

338

1.88

Baghban

Hum Turn Once

125

No. of

Average

Average

Respondents

No. of right Answers

119

281

2.36

Twice

40

106

2.65

3 times or more

21

54

2.57

Total

180

441

2.45



The general trend shows that as people watch the movies more and more number of times, their brand recall increases.



Brand recall also depends on how recently they have watched a movie.

Percentage of Respondents remembering atleast one Brand Name Movie

Atleast one

No. of

Brand Name

Respondents

Koi Mil Gaya

160

180

Baghban

158

180

Hum Turn

173

180

Total

491

540



126

Research shows that approx. 91 % of the total audience remembers at least one

Percentage (%) 88.89 87.78 96.11 90.93

brand name after watching the movie.

127

STATISTICAL ANALYSIS

HYPOTHESIS:

Null

Hypothesis

H0:

-

Product placement is not effective.

Alternate

Hypothesis

Ha:

-Product

placement

is

effective.

LEVEL OF SIGNIFICANCE:

We will be testing at 5% Level of Significance.

TEST CRITERION USED:

This is a non-parametric test, as we

128

are

not

dealing

with

any

values. It is also known as ChiSquare test of dependence.

CALCULATIONS:

Recalled

Recalled

Did not Recall

Koi Mil Gaya

324

396

Baghban

338

382

Hum Turn

441

279

1103

1057

Movie

Column total

Chi-Square = Σ [observed value (O) - Expected value (E)] Expected value (E)

129

Row total 720 720 720 2160

Expected value = Row total * Column total Grand total

O

E

(O-E) 2

(O-E) 2 E

Recalled Did not Recall

Koi Mil Gaya

324

367.67

1907.07

5.19

Baghban

338

367.67

880.31

2.39

Hum Turn

441

367.67

5377.29

14:6-3

Koi Mil Gaya

396

352.33

1097.07

5.41

Baghban

382

352.33

880.31

2.50

Hum Turn

279

352.33

5377.29

15.26

Calculated Chi-Square

45.33

Calculated Chi-Square = 45.33

Degree of freedom = (Rl)*(C-l) = (3-1)*(2-1) = 2

Critical Chi-Square d.f. (2) And level significance (50/0) 5.991

130

at of =

DECISION:

Acceptance

Rejection 45.53 5.991 As Calculated Chi- Square (45.33)

>

Critical

Chi-

Square (5.991). Therefore we reject the Null hypothesis (Ho). And accept the Alternate hypothesis (Ha).

131

“Product placement is effective!”

132

CONCLUSIONS OF THE RESEARCH 1. From

the

Statistical

analysis we can conclude that product placement is effectively done in Indian movies.

2. Kids

are

very

influenced

by

easily product

placements.

3. As people watch the movies more and more number of times,

their

increases

brand

and

recall

it

also

depends on how recently they

have

watched

a

movie.

4. Product placement is very effective on youngsters as

133

they get influenced easily by actors/actresses. They consider

actors

as

their

idols and would want to do what ever their idols do.

5. Very rarely does product placement purchase people.

affect decision

In

most

the of cases

people don't change their brands unless it has been endorsed by their favourite celebrity.

6. The number of times the product is shown in the movie

also

affects

the

brand recall, but it should not be overdone.

7. Product

placement

advertisers

get

helps their

messages across to people who aren't forced to watch

134

ads

sandwiched

in

the

middle of the show.

8. Product placement has the potential

to

create

tremendous

product

exposure

for

a

comparatively

small

expense.

9. Product

Placement

is

an

effective strategy to gain exposure products

and to

promote

the

general

public.

10. Product placement is more effective in the rural market as compared to the urban market.

11.Compared

to

traditional

advertisement,

product

placement is being more convincing,

135

diversified,

imaginative,

and

emotionally appealing.

12.In regards to the Studios and Production Companies, it offsets production costs. Products and / or services are provided f of charge to the Studios and Production Companies.

The

Departments of props, set decorations, wardrobe and transportation can save a sizeable amount of money by using Product Placement agencies. If there were no placement agencies, these departments

would

be

forced to buy or rent these items.

13.

So

in

conclude advantages

short that of

placements are:

136

we

can the

in-film



Big stars at a fraction of the costs.



Films

transcend

geography,

class

and

culture barriers. 

Clutter-

free

environment. 

Not subject to surfing, zipping

or

muting

(unlike in TV and other media). 

Catches

people

in

a

receptive mood. 

Revived

and

revisited

several times as a film's length

always

get

lengthened. 

Target specific.



Opportunities for crosspromotions.

137

‘ANN EXUR ES’

138

QUESTIONNAIRE 1. How often do you watch a movie?

139

 Once in a week  Once in a month  Once in fortnight  Others (Please specify)

2. Where do you usually watch movies? Please rank the following according to your preference (1-Highest, 3-lowest)  Theater ______  VCD/DVD ______  Cable ______

3. With whom do you usually watch movies?  Friends

140

 Family  Spouse/Girlfriend/B oyfriend  Alone 4. Which of the following movies have you seen and how many times?  Koi Mil Gaya ________time(s)  Baghban ________time(s)  Hum Tum ________time(s)  Viruddh ________time(s)

Please answer the following questions as per the movies marked.

“Koi Mil Gaya…”.

141

1. Which

beverage

does

Hrithik Roshan ask for at Preity Zinta’s house? Ans. ___________________________ ___________________________

2. Which Bi-cycle does Preity Zinta present to Hrithik? Ans. ___________________________ ___________________________

3. Which bike was awarded to the

winners

of

the

basketball game? Ans. ___________________________ ___________________________

4. Which T.V. Showroom was shown in the movie? Ans.

______________________ ______________________

142

“Baghban” 1. Which tea does Hema Malini prepares for Big B? Ans. ________________________ ________________________ ___ 2. In which bank does Amitabh Bachchan work in the movie? Ans. ________________________ ________________________ ___

3. What was the name of Paresh Rawal’s music café? Ans. ________________________ ________________________ ___

143

4.Which car does Salman Khan gifts Amitabh Bachchan? Ans. ________________________ ________________________ ___

“HUM TUM” 1. In which newspaper did Hum Tum cartoons published? Ans. ________________________ _____________________

2. Which news channel covers Saif’s book launch in the movie? Ans. ________________________ _____________________ 3. Which magzine does Saif read in the movie?

144

Ans. ________________________ _____________________

4. Which brand of potato chips were the cartoon characters eating in the movie?

Ans. ________________________ _____________________

“Viruddh” 1. Which service

money

transfer

does

Amitabh

Bachchan use in the movie?

Ans. __________________________ _______________________

2. Which brand of automobile oil did Sanjay Dutt use in the movie? Ans. ___________________________ ________________________

145

END (The above questions on the movies were included to get the unaided brand recall in some cases.)

“RESPO NSE

146

SHEETS ”

147

RESPONSE SHEET NO. 1 Name: Puneet Sood ID Number: FW04722 Title Of Study: Marketing & Brand Positioning In The Industry Of Entertainment.

Date

of

Consultation

with

Guide: August 2005 The Outcome of Discussion: Being the first discussion about the thesis, I was able to clear out my vision regarding the study.

The Progress Of Thesis: The thesis would be divided into 2 parts, Television and Movies. The main focus would be on the differentiation that exists in both the fields while placing the brand.

148

RESPONSE SHEET NO. 2 Name: Puneet Sood ID Number: FW04722 Title Of Study: Marketing & Brand Positioning In The Industry Of Entertainment.

Date

of

Consultation

with

Guide: September 2005 The Outcome of Discussion: The second discussion comprised of the detailed discussion about the market, which is expanding for the marketers in the entertainment industry. Detailed discussions were made about the small screen placements and a brief overview of the film market.

The Progress Of Thesis: I’ve completed the study of the market prevailing in the small screen, mainly

149

comprising of game shows, reality shows etc. As, the market is huge and it is not possible to take all the shows as example, therefore short and crisp case studies on the most popular T.V. programmes

are

taken

into

consideration for research and analysis.

RESPONSE SHEET NO. 3 Name: Puneet Sood ID Number: FW04722 Title Of Study: Marketing & Brand Positioning In The Industry Of Entertainment.

Date

of

Consultation

Guide: October 5, 2005’

150

with

The Outcome of Discussion: The third discussion turned out to be very informative session with Viraj sir, as he pointed out key points that were not very

visible

Discussions

in about

the the

research. marketer’s

preference depending on the price, viewership and repetitions, gave a base for

better

understanding

and

positioning strategy.

The Progress Of Thesis: I’ve completed the study of the market prevailing in the small screen, mainly comprising of game shows, reality shows and an overview on daily soaps etc. As, the market is huge and it is not possible to take all the shows as example, therefore short and crisp case studies on the most popular T.V. programmes

are

taken

into

consideration for research and analysis. An

interview

session

with

Nina

Jaipuria (V.P. Sony Set India Ltd.) turned out to be very informative and

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enriching experience as she explained the

whole

business

prospective

hovering around the T.V. soaps and other game shows.

RESPONSE SHEET NO. 4 Name: Puneet Sood ID Number: FW04722 Title Of Study: Marketing & Brand Positioning In The Industry Of Entertainment.

Date

of

Consultation

with

Guide: October 5, 2005’ The Outcome of Discussion: The fourth discussion was mere analysis of the job and researched conducted previously. It

consisted

of

analyzing

the

information received from the death interviews conducted last week.

The Progress Of Thesis: The study is at an important stage, as it is

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almost going to complete the first hurdle of television industry and its brand placements. It has reached the analytical part.

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