Globally businesses strive to be successful and the measure of success is viewed in metrics like market size, product mix, product demand, customer base, repeat customers, ticket size, upsell, cross-sell, margins, turnover, profits, competitors and geographical expansion.
As a case study let us evaluate Bollywood for each of these parameters and analyze what went wrong for the thriving industry that is now at the receiving end of boycott calls from the general public.
Evolution of product and market -
As a production factory would have it, Bollywood has grown from humble theatre beginnings with a few rupees per month salary for actors to a full-fledged multi-million dollar industry. Interestingly, the creative collaboration in this industry is unparalleled as compared to any other industry with technicians and crew working across multiple projects simultaneously. Even competing actors get along well with few exceptions and rarely pose a direct threat to each others’ productions as the timings of big releases are well coordinated.
Market size
Bollywood as the home to the Indian film industry has direct access to one of the largest markets covering 1/7th of the human race. As for stats the Bollywood industry is Rs 18300 crore industry with an overall market of 3 lac crores for the entire media and entertainment industry in India and projected to grow at ~11% CAGR and touch ~4.5 lac crore by 2026.
Consumer
With average Indian per capita GDP rising steadily above $2200 and a high percentage of disposable incomes indicates that movies have a huge potential market to win.
Additionally, the strong presence of a prosperous Indian diaspora across the globe with a heavy concentration in the developed world has enabled a secondary market running into thousands of crores.
Ref — https://www.statista.com/statistics/627473/overseas-theatrical-film-revenue-india/
Acquisition and retention
Interestingly while customer acquisition is a challenge for businesses spending millions of dollars on sales and marketing, Bollywood has its customer base sorted out. Every Indian is a default customer cutting across age, gender, and demographics, movies are the top entertainment options for Indians with an average user spend on entertainment increasing from $19 in 2016 to $35 in 2021. And instances where businesses are desperate to get more business, Bollywood movies invariable have fans at multiple levels of the loyalty pyramid from first-day first show fans to weekly moviegoers to monthly family getaways to festive family entertainers. There is a section of obsessive repeat watchers too.
Ref — https://www.statista.com/statistics/756067/india-per-capita-spending-on-media-and-entertainment/
Revenues
With almost 14 crore Indians watching a movie at least once a year, the repeat consumer of Bollywood is giving them huge revenues. And with a ticket size averaging Rs 207, decision-making for the consumer is never a challenge.
Ref — https://www.statista.com/statistics/948750/india-average-ticket-price-by-company/
Upsell
65% of cine-goers spend on F&B inside the movie hall. A whopping 41% of spending 200–500 Rs on popcorn and cold drinks makes the proposition even stronger for business.
Ref — https://in.yougov.com/en-hi/news/2018/07/20/movie-viewing-experience-average-indian-cinemagoer/
Geo Expansion
With a huge diaspora following Bollywood across the globe, Indian movies are a huge hit across the US, Europe, the Middle East and Australia virtually covering the globe. Apart from Telugu, Tamil, Malayalam, and Hindi, Baahubali was dubbed in Japanese, Chinese, Taiwanese, French, German and Spanish languages as well giving it much wider exposure.
According to Statista, the Indian movie overseas business has doubled from $8.1 billion in 2014 to over $17.5 billion.
Ref — https://www.statista.com/statistics/627473/overseas-theatrical-film-revenue-india/
In light of all these favourable factors, the only thing Bollywood needs to do is create good quality original content. However, on the contrary, Bollywood has continued to stagnate with multi-generational nepotism to mediocre talent networking. While the funding and investment track record of Bollywood has always been shady, it can be scrutinized in depth at a later point in time.
For now, it seems despite all the favourable factors, Bollywood has further agitated their core consumer base by being arrogant about their position and also refusing to acknowledge the pre-release cues of critics and audiences who have vociferously called for boycotts of movies like Prithviraj, Lal Singh Chaddha and now Brahmastra. To rub salt into the wounds for Lal Singh Chaddha, newcomer Vijay Deverkonda turned off the audiences with his arrogant Liger release press conference and belligerent attitude mocking audiences supporting boycott trends. In the meantime, the lesser-known movie Dobaara release saw Tapasee and Anurag were seen seeking attention by begging the audience for a boycott of their film, which most audiences were unaware of anyways.
For the record, LSC failed to even generate 25 crores which is roughly a tenth of its input costs. Liger was damaged even more and Vijay had to return his professional fees after theatre owners protested the losses incurred due to his irresponsible attitude.
Worse still this impact showed up in the stock prices of two major multiplex chains that lost over 20% of their stock value days after the screening of the Aamir Khan movie. (Ref — attached stock price graphs).
In contrast, Nikhil Siddhartha’s movie Karthikeya 2 has received rave reviews from audiences across India and the actor has been humbly thanking the audiences for their appreciation. Time will tell if Bollywood makes corrections or if the current mainstream lot will be edged out by the south counterparts with their pan-India films.
