Entertain-omics!

23 Jan 2023, Mumbai
Entertain-omics!
The 70s kids, especially those from a tier 3/4 towns would remember a sight vividly, jadugar – surrounded by many bystanders, a man promises to show a fight of snake and mongoose (which never happens). He starts by showcasing a snake and a mongoose separately, tells stories about them and gets the crowd into conversation. Suddenly in between he would start discussing some “power” medicines and get one from the audience to discuss his problem. The jadugar would ask him a few things, to which the stranger resist, but suddenly the jadugar would play trick and the stranger behaves as being hypnotized and eventually buys the “power” medicine! Seeing him buy, many from the crow buy that medicine, leaving a small chaos. And the show of snake-mongoose never happens! Public leaves the place, and after some time, one could find the “stranger” hobnobbing with the jadugar later! See, how smart seller that jadugar was! His man would act as the first customer, acting as satisfied of his med, which would generate “demand” from the buyer – unknown villagers.
 
In the mid-90s, a television company had launched a new brand and was competing against the established ones. In those days of limited advertising, word of mouth was more effective. Obviously, this new brand faced stiff competition. In order to create a hype, a smart marketing head hired a few yellow-black taxis in Mumbai, out the empty box of his brand on top or in the back (the dickie would remain open) and have them roam around the major residential areas. Innocuous people would think that the new brand has a good traction and that brand saw good uptick in sales. Still an effective way to generate hype and drive sales.
 
Circa, 2000’s, in the ear of digital marketing, social media, many of us must have seen smart selling through WhatsApp and other SM platforms. Albeit using the same click-bait technique!
 
So, what does this have to do with entertainment?
Well, the entertainment industry survives on positive word of mouth and reviews. And a mix of initial sales numbers (box office) or the TRPs. Television Rating Point (TRP) is crucial for television channels, as evidenced by the fact that 70% of their revenue comes from advertising. The alleged inflating of several television networks' viewing numbers by such channels was the subject of the great TRP scam of 2020. The investigation was conducted as a result of a Mumbai Police complaint.  

The Mumbai police discovered the TRP scam in October 2020, and they identified a leading TV network as the primary offenders. The ED charge sheet alleged a bigger conspiracy between channel viewers, agents, and regional managers to persuade or compel panel families to watch channels in order to benefit financially. According to the research, TRP is based on statistical data from 45000 Indian households and about 1800 homes in Mumbai. It is unclear to say when the manipulation started, but the chargesheet claims that numerous channel owners took use of the system over time. So, as of now there is some smoke! It will be very embarrassing, if any of them are found guilty, because it would then cast doubt over credibility of the entire industry!

The Indian Film industry..
As per estimates, there are some 9500-10,000 screens (single/multi) across India. During 2019, the Indian film industry has said to have a turnover of Rs.19-20,000 Cr. In pandemic time, this must have changed, rather reduced. During the pandemic the model of entertainment too changed, especially the delivery of content. Earlier it was Many viewers coming to one screen, but due to Corona regulations, theatres were shut down, so content was delivered digitally via OTT. So, the mode and delivery both changed. This indeed affected the industry.

Before that, Rs 100 crore in net collections, which are determined after subtracting entertainment tax of up to 50% from gross receipts, had evolved as the new industry benchmark for box office success. Releasing higher number of prints in maximum screens (digital prints offer huge cost savings ), increased ticket prices in urban areas, were some of the tricks the producers/distributors of big budget movie would do to get to the tag of fastest Rs.100 Cr! But would the movie still be worth Rs.100 Cr or not? Only the industry insiders can take a position on that.
 
In today’s era of digitalization, booking tickets has become easier. One can book in advance and those numbers can be used by producers/distributors or PR agencies to create hype around their property. It is all legit, however, how many of those bookings really turn into actual viewership, and whether those viewers were organically attracted, could be a grey spot. While there are some agencies which do audit of audiences, one hopes that there remains transparency unlike the TRP scam.
 
Given that entertainment business is now an industry, suffices to assume that most of the transactions are through banks, meaning, taxes are collected during production (on payments to actors, contractors) and sales too (from gate collection). Actors too get their buck. Exhibitors get standard 40-50% of the sale value, while distributors manage around 10-12%. So that part is sorted It is the producers/distributors whose fate hangs on the performance of the movie at the box office.  

Typically, artists and technicians make up to 40-50% of the production costs, while remaining large chunk could go in for shooting (40%) and some part for publicity (10-15%).  As per some experts, if a movie made on a budget of Rs.100 Cr can return 20%, if it manages to make Rs. 175 Cr at the box office. In addition the producer would have revenue through the sale of music, overseas and satellite rights. Still it is a risky game and not everyone can become profitable every time!
 
Flow of the money
The flow of money is going from many viewers to select few (artists, directors, producers, exhibitors, and technicians). While in corporate too, it would have been the same case, however, they would still have to spend those revenues on many people, plants, machinery, vendors. Compared to that, a film producer would have significantly lesser heads to spend on. In today’s digitalisation, one can assume the majority of collection at box office is coming from legit monies earned via salary or business. While the film industry had been marred with suspicion of shoddy deals in the past, one hopes that with the growing digitalization in the payments industry, this would have curtailed to some good extent. Hope.
 
Last bit…
Entertainment is a necessity for every human being. However, it is own volition how much time and money one would like to spend on that. The Indian film industry has come a long way – from artists assuming aliases in the 60-80s to establishing real name as a brand! So has the size of business and aura around it. When artists had aliases, their identity was restricted to a select few, and so were their personal views. However, times changed - with a growing media, opinions  flew faster and so the number of opinion makers. Today, artists seldom have aliases (which is great), they have opinions on everything, they make their points, and there is plethora of media that they can utilise to air their opinions. Their real identity gets attached to opinions they make, and so the reception of them among general public. That said, with humongous reach through multi-medium delivery, their opinions flow faster than air – sometime they are lapped happily while sometimes they end-up creating controversy. The issue is not whether an artist should have an opinion or not, or should they make it not (in fact India is the largest democracy) - the point is how the public receives. Can the general public be a bit discreet in seeing the two faces (artists vs actual persona) clearly, make distinction, and then make informed judgment- whether to accept or refuse their point/opinion/stand? I think it is possible.
 
Ecosystems are deep and play an important role in today’s highly polarized world. And, world is shrinking in terms of entertainers and delivery of delivery – which is great, however at the same time, the divide among general public could get broader as entertainers tend to have large mass appeal! Many artists blame public for not turning to watch their creation – there could be multiple reasons. If a product is good, most likely it will receive a good response, however, if the product comes from a maker or ingredient which public has any doubts, public would certainly like to scrutinize it before buying. It could refuse to buy too (remember, India is world’s largest democracy). So in such a scenario, makers either need to exercise good caution or they can decide to daredevils – its their choice. However, the makers need to act as corporate – make a product with due risk/benefit and to sell it professionally – but don’t play around the workers because as a maker you are supposed to have paid workers fully while they rendered their services.
 
India that lives in Bharat, is a huge market. A sensible entertainer would try to strike a good balance, and produce a quality content for an ordinary Indian - that is unique, believable, unbiased, and non-propagandistic. It is the duty of viewers to make own decision (not getting much awed by booking numbers or reviews) to watch, and applaud genuine content. However, viewer or makers - let it not become a prestige game!

While the sharks of the industry can manage to get backing some major influencers, but ordinary entertainers would not have that luxury. One must keep that in mind. It is the choice entertainers and the public must make. As a system or governance, there is a need for better checks and balances for audience measurement in the Indian film industry. Hope somebody takes appropriate steps!
 
Let us entertain/ed, Lets be joyful.
- Dhananjay M. Deshmukh, Mumbai
(Author is an independent market research and business consulting professional. Views are personal. Data and information presented is collected via online secondary research).