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The Indian film industry produces around 1,050 filmsand sells around 4 billion movie tickets, each year.

In 2008, the size of the Indian film industry wasestimated to be USD 2.58 billion.

While the domestic box office collections

contributed as much as 60%, the homeentertainment contributed a mere 6% to the totalrevenues, which is significantly lower as comparedto developed countries.

Source: E&Y, Apr-2009


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Source: (E&Y, Apr-09)

Indian film industry expected to grow at CAGR of 11.2% over next 5 years[compared to over 15% CAGR growth before economic downturn]

Current size of Indian film industry estimated around Rs 109.2 billion in 2008

which is expected to grow at a CAGR of 12.2% to reach Rs168.6 billion by 2013.


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Distribution Channel


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The producer completes the movie. Process of Buying Rights:

The producer decides the number of movie of reels that would beallocated to the distributor.

Rights contain: Purchase of reels

Purchase of Publicity material

Based on previous success record of the producer, the movie postcompletion is demanded by distributors.

The producer estimates the demand for his movie and accordinglysends the movie to be printed in Adlabs, Mumbai for creation ofmovie reels.

Movie reels are forwarded to distributor at the cost decided byproducer.


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Movie transfer from distributor to exhibitor begins onTuesday/Wednesday evening for a show on Friday in cinemas

halls.

The reels are transferred by road, air or rail on the basis ofthe distance of transfer. For distribution of films to easternzone, the reels are sent on Tuesday evening.

The distributors are not exhibited the film before the sale ofthe film, hence his buying is totally based on producersreputation in the market. E.g. Due to this process, Failure Chandni Chowk to China & Success Bheja Fry

Step by Step Analysis


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The distributors that approach the producer are from various

zones of the country classified in to zonal areas, namelyNorth, east, south & west.

Post the collection of movie reels by distributor, thedistributor decides the exhibitor through whom movie will

be shown.

The formats of movie presenting like printing of posters,advertising, promotion, show timings, no. of shows areprovided by producer. However used by exhibitor &

distributor.

6 Sheet (big banner), 2 sheet (small banner)



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Shuttling:This is the method used by distributors in which

distributors rotate the given film roles within cinema halls.The basic idea behind this concept is that printing of one role

for one cinema is not cost efficient for the distributor.

The cinema hall owners have a schedule given to them by

distributors stating the upcoming movies in next 6 months.

Hence, an exhibitor can decide and convey the time periodfor which he would like to present the movie in his hall.



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Producer Distributor Exhibitor

Intermediary

Information Flow


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1. MUMBAI (Bombay circuit comprising part of Maharashtra, Gujarat &Goa) Yash Raj Film Distributors, headed by Mr. Rajesh Malhotra.

2. DELHI (Delhi-U.P. circuit)Yash Raj P. P. Associates Private Limited

3. JALANDHAR (East Punjab circuit)Yash Raj Puri & Co. Pvt. Ltd.

4. JAIPUR (Rajasthan circuit)Yash Raj Jai Pictures Private Limited

5. AMRAVATI (C.P. circuit)Yash Raj Films Private Limited through Khajanchi Film Exchange

6. INDORE (C.I. circuit)

Yash Raj Films Private Limited

Distribution services provided exclusively to Yash Raj Films & Films coming to

India during International film festival(s)


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7. BANGALORE (Mysore circuit)Yash Raj Pal Films Distributors (Bangalore) Pvt. Ltd.

8. SECUNDERABAD (Nizam circuit)Yash Raj Vandana Films Distributors Private Limited

9. CALCUTTA (Bengal circuit)Yash Raj Kushagra Arts Private Limited

10. CHENNAI (Tamil Nadu circuit)Yash Raj Films Private Limited

11. ANDHRA PRADESH (Andhra circuit)Yash Raj Films Private Limited

12. COCHIN (Kerala circuit)Yash Raj Films Private Limited


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Step 1Research potential distributors. Identify the movie's genreand the audience it appeals to most. Find distributors that

have released similar titles. Step 2

Talk with distributors to determine if there is interest on bothsides. Once you have selected the company to distribute thefilm, ask them to draft a generic distribution agreement for

you to amend. Step 3

Consider the territory that the agreement covers. Use onedistributor for the zones


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Step 4Discuss whether the distribution agreement covers theatricalscreenings only or include DVD distribution, as well as thelength of the terms. It is to the filmmakers advantage to have a

short term--less than 5 years--with automatic extensions. Step 5

Include the amount of publicity and media the distributioncompany is obligated to perform on behalf of the film. Thisfigure includes number of print materials and advertisements

to be created to publicize the film, interviews, articles andreviews.

Step 6Agree upon the distribution fees. Filmmakers can either agreeto a 50/50 split of the profits after the distributor recoups the

costs of distributing and marketing the film.Source: Ravi Enterprise, Mumbai


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The document begins with following text:Agreement made and entered into as of AGREEMENT DATE by andbetween DISTRIBUTION COMPANY, ("Distributor") at ADDRESS OFDISTRIBUTION COMPANY, and PRODUCTION COMPANY, ("Producer").

In consideration of their respective covenants, warranties andrepresentations, together with other good and valuable consideration,Distributor and Producer hereby agree on following:

PICTURE - PRODUCTION FORMAT (I.E. 35MM/16MM/DIGITAL)

RIGHTS GRANTED

Advertising

Editing

Title

Territories

Dispute clause

Warranties


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Producer to Distributors:Producer to Distributors:

Conventionally, the distributor has been transferring moneyon the transfer of the reel. This is like a sale purchase. Thedistributor purchases the movie at the price decided by the

producer. The revenue generation for producer ends postsale to distributor.

Producer Distributors


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Only Weekly collection:Only Weekly collection: The exhibitor in this model only presents a percentage of

revenue collections to the distributor. In this case, scalingmodel of pricing is used.

E.g. Mangala Talkies, Deccan, Pune uses a model in whichthe 50% of the first week collection goes to the distributor. Inthe next week, scaling takes place and 40% of the box office

collection goes to distributor followed by 35% of box officecollection.The nature of hall, multiplex or single screen also decides therevenue model.


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