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Technology Changing Bollywood's Business

Digital technology has reduced distribution costs drastically and a movie can be exhibited at hundreds of cinemas on the day of its release

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The good old projector with the spool of reels symbolized cinema commerce for decades. The director's labour of love captured in spool of reels that would be sent out to different territories across the country. A typical two-hour movie will probably be divided into five or six reels. Do you know all that has changed now? Bollywood has gone digital and commerce in Bollywood is a different game now.

Satellite-based Cinema

Digital cinema takes away any physical handling of the film or print. Satellite delivery enables it to first transfer a film to a digital medium, which is then beamed via satellite or cable to all the theaters at once. This reduces distribution costs drastically. The cost of sending it to one theatre or to a hundred theaters is the same.

Reels Out - Satellite In
No longer is the delivery of spool of reels but companies like Hughes Communications, one of the leaders in the industry, enables an end-to-end platform for the satellite delivery of movies to exhibitors across India, which then exhibit movies received using specified digital cinema equipment.

Curbing Piracy

Moreover the movie transmitted is encrypted data, and decryption occurs at the projection system itself and is therefore protected. Also, prior to digitisation, the Indian film industry was plagued by piracy, lack of transparency, leakage of revenue and opportunities lost in terms of exploitation of the theatrical rights of films.

One of the biggest reasons why Bollywood is opting for an aggressive digital roll-out, is that against traditional cinema delivery, digital cinema offers the most effective ability to curb piracy, a menace that has afflicted the industry for years.

Bollywood - Reigning Supreme

In terms of content volume, the Indian film industry is the largest in the world and produces more than 1,500 films annually. In 2011, an estimated 3.3 billion movie tickets were sold in India.

The Commerce of Bollywood

Come Friday and film trade magazines are buzzing with figures of the latest ticket sales of the latest release. The Khans and the Kapoors almost have a Mughal like presence over Bollywood commerce. Take for instance the case of a full-length feature film. It has always been a highly perishable commodity as far as theatre collections are concerned. With the exception of about 10 per cent of 'hit' films, the rest have an average life span of 6-14 days in any given cinema.

Increasing Collections
One of the main reasons for the boom in Bollywood commerce is the maximization of revenues due to the change in delivery platform. For maximum collection, it is essential that theatrical collections are maximised in this short span, which is only possible if the film is simultaneously released in an optimum number of cinemas.

In the past, to exhibit a film in a cinema, the producer/distributor had to provide a print (reel) of the movie, which cost between Rs. 50,000 to Rs. 60,000 per print. Hence the producer/distributor, depending on budgets, would make a specific number of prints to send to cinemas and would maximise revenues by ensuring that such prints were sent to the 'most profitable centers' in the metros first.

After that, the reel would be passed on to cinemas in Tier 2 and Tier 3 cities/towns. By this time, the print would have suffered in quality and also fallen victim to piracy. Also, the audience in Tier 2 and Tier 3 cities needed to wait weeks for the prints to trickle into the local cinemas. As a result, cinemas suffered loss of business. In addition, the exhibition and distribution sector were highly disorganised and there was a need to consolidate the market and increase the distribution spread to efficiently maximise revenues.

The Digital Solution
Just a few years ago, blockbusters reached barely 500 cinemas. That too for a top of line Shahrukh Khan type release. Earlier small low-budget films found it tough to secure a release in even 100-plus cinemas across India. Today, a blockbuster release can easily reach 3,000 cinemas across India, a win-win solution to the entire ecosystem. Take for instance the case of Bajirao Mastani which recently mopped up Rs 90.80 crore in three days with an initial release in 3,750 theatres according to trade news.

Territory distribution prices have as much as tripled in certain regions vis-à-vis the analog days. Also, regional language cinema, which was badly affected by the lack of outreach to the audience and spiralling print costs, is now revived. Small-budget, niche cinema has also benefited immensely, the latest case being Paan Singh Tomar, a 100 per cent digital release that actually witnessed a week-on-week increase in the number of screening cinemas, a hitherto unheard of phenomenon. In its third week, the film was screening in 310 cinemas versus its opening figure of 135. In addition to saving costs and time, it also helps 1 million kg of polyester waste from film reels.

According to Shivaji Chatterjee, SVP Hughes Communications, "Digital cinema has enabled a huge cut in cost of delivery of movies to theatres. Distributors are happy with the new delivery system because earlier the number of reels was a distributor's risk. Today no distributor loses money because unlike earlier there is no investment in reel cost."

The Future of Bollywood

Bollywood may soon reach 100% digitization. The benefits of digitization and satellite-based delivery means an increase in revenues of films in spite commercial screening cycle decreasing with the volume of new movies coming. This is good news for niche films and budget filmmakers as their films will find space on screens in spite of their budgets. Considering the way art forms and various cultural expressions have a lifespan. Take for instance the case of theatre in India. At one time it was mainstream entertainment before popular cinema overtook over it. Digitization of cinema is one of the best things that ever happened to Indian cinema.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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Puneet Mehrotra

Puneet Mehrotra is an author and columnist who loves inspiring people and writes on business and technolog

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