Jan 15, 2009

Business - India;Bollywood marketing budgets ignore recession

Seema Sindhu

Will Bollywood movie marketing budgets take a hit on the back of a recessionary environment?

Consider these facts. Generally, the industry spends anywhere between 25 (low budget) and 100 per cent (high budget) of the total cost of a movie on marketing. However, in the last quarter, Bollywood was seen underperforming. While some believe that it was due to lack of good releases (barring a few), others believe it was the recession which hit the entertainment industry. There’s also buzz that actors have taken a voluntary cut in fees and producers are correcting budgets.

The film industry thinks otherwise. UTV Motion Pictures CEO Siddharth Roy Kapur says: “We have a very optimised marketing budget. We spend 40 per cent of the total production cost of a movie on marketing. So, we haven’t felt any need for a cut on the budget. But in future, there can be a cut on marketing budgets among those who have fat marketing budgets.”

Navin Shah, CEO, Percept Picture Company, concurs: “Producers can’t compromise on marketing budgets. In fact, ‘saturation release’ is the trend. Everybody is doing as much promotion as one can in the first week of the release itself. If it doesn’t deliver in the first weekend, it has serious implication on the overall success of the movie.”

Kapur further explains that reduction in advertising rates has cushioned marketing spends to some extent. “Advertising rates have been cut by 25-50 per cent across the mediums. As many advertisers have cut their advertising spends, the media is obliged to reduce advertising rates. We are further negotiating with the media to reduce their rate card,” adds Kapur.

Shah has a slightly different take. He says that while advertising rates have not been cut, value deliverance has increased. Since many advertisers have cut on their budgets, there are more prime time and better spots available, he explains.

Producers, meanwhile, are also exploring the new media which can give more bang for the buck. For instance, Ghajini had a tie-up with Indiagames (a part of the UTV Group) which developed 4 games for the movie and also developed a unique customised ‘body building’ application which is a virtual mobile trainer of more than 120 exercise routines that promise to deliver users a sculpted Aamir look.

In the application, Ultimate Workout, Aamir Khan’s trainer Satyajit outlines a training schedule for all types of users, ranging from a beginner to an advanced user. An animated Aamir Khan trains the user and gives tips on how to perform some of the most complex exercise routines. Kapur testifies: “Online medium has become very integral today. We spend 10 per cent of total marketing budget on online medium.”

Besides, to overcome lesser footfall in multiplexes, producers are also looking at new mediums to add to revenue, like in case of Oye Lucky, Lucky Oye, where the film was released on direct-to-home (DTH) in a paid preview barely two weeks after it hit theatres. Usually, movies are released on DTH platforms when they start losing steam on theatre.

The experiment was so successful that Kapur says: “We will replicate the experiment in our future projects too.” Others in the industry also plan to go for a near-simultaneous release of movies on DTH and internet. Shah says: “Online and DTH reach is negligible at present. But as the reach increases, these will be intergral distribution mediums to grab more revenue. DTH will be a very important distribution channel. We do plan to experiment with this model for our forthcoming projects.”

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