Film Insurance & Financing in India
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BACKGROUND NOTE contd...The industry followed
the ‘studio culture'of Hollywood in the initial days, wherein big movie
production houses (called studios) hired stars, music directors and film
directors as salaried employees for four to five years. However, over the
years, the studio system gradually gave way to independent producers. The
decades that followed saw Indian cinema flourishing and becoming an integral
part of every Indian's life. Film stars, producers, directors, music
directors, lyricists and playback singers became immensely popular
celebrities.
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The industry was broadly classified into four segments
– software (films, music and programs), hardware (studios and other
infrastructure services that support the creation of entertainment
software) and services (distribution, exhibition, film procurement and
banking services) and the front-end media segment (which film magazines,
video cassettes and promotional tools). |
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By 2001, the Indian film industry had produced about 27,000
feature films and thousands of documented short films. With around 800 films
being produced every year, in over 52 languages, India was undoubtedly the
world's largest film producing country. In March 2000, a FICCI-Arthur
Andersen report revealed that the Indian film industry was expected to grow
from Rs 84 billion in 2000 to Rs 340 billion by 2005.
However, all was not well with the Indian film industry. The success rate of
Indian films was extremely low. A majority of the films could not even
recover the investments made. Even after nine decades, the number of
‘blockbuster'movies was very low when compared to the US film industry.
Analysts claimed that the most significant problem was the lack of quality
and the mediocre production values often resulted in films sinking without a
trace in the market. The need for insuring films arose from the basic
principle of getting protection against financial loss arising on the
happening of an unexpected event. Table I gives the various categories for
film insurance:
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TABLE I FILM INSURANCE
THE PROBLEMS
THE SOLUTIONS
QUESTIONS FOR DISCUSSION
ADDITIONAL READINGS & REFERENCES
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