Is Bollywood an Opportunity or a Competitive Threat to Hollywood - Case Study Example

CAN BOLLYWOOD GO GLOBAL Globalization in the film industry Feature films have high development costs, and this is accompanied by relatively large minimum market sizes for profit making. However, the film industry also faces uncertainty in demand, and to counter this, the need for integration of exhibition channels becomes a necessity. Furthermore, the process of internalization i.e. export of films from the country of origin, also serves to expand the market. Globalization in the film industry denotes the aspect of internalization, and to a broader sense involves the interconnectedness between a multitude of countries that leads to, in this case, a form of integration in social, economic, and cultural fields. Globalization in the film industry can be approached from four main categories as discussed by Lorenzen (2008). He enumerates these approaches as being globalization of involvement in film-making, film consumption, film production and organization of film making. Globalization involvement in film-making is characterized by a rapid growth in the number of feature films that hit the market, either for TV, cinema or exhibition. For instance, Lorenzen observes that India and China have considerably experienced steady growth in the film industry, a situation backed by their respective growth in purchasing power and investment in the industry. The rise of global consumer taste the world over characterizes globalization in consumption. Lorenzen notes that apart from continuous expansion of the global market, the ease with which producers can reach the prospective market has also improved. The advantage that comes with this phenomenon is that products can be released simultaneously to global audiences on a good number of national markets. This consumption globalization is immensely boosted by such quick distribution and exhibition platforms as internet, Satellite TV and DVDs. India and Japan have been noted to be more aggressive in adopting new technological distribution means compared to Hollywood. Cross-border co-production of films is what marks production globalization. Even though this practice has been around for some time, it has recently witnessed a great surge, with most films from US, Canada, Asia, and Europe involving cross-border production. India, due to is conservative nature, is yet adopt cross-border co-production, hence the relatively low external market share for its films. The final aspect of globalization is global organization, characterized by the advent of global corporations. With the onset of internalization, Lorenzen observes that most Hollywood film production companies formed mergers with or were acquired by Japanese, French and even Australian corporations, resulting in multinational companies with global ownership. It is worth noting that India has always been an exception when it comes to global organization, although recent studies show that a section of Bollywood filmmakers are moving towards this goal. Globalization has impacted positively on the film industry, with a greater number of film productions with global coverage being experienced. In addition, there has been an increase in talent mobility between different countries, something that can be attributed to the effectiveness of these global production and distribution networks. Is Bollywood an opportunity or a competitive threat to Hollywood? In the recent years, there has been a significant improvement in the market share of Indian films. For instance, improved economic condition at the beginning of 2010 translated to an increase in consumption of Indian films within the country and most parts of South Asia. Furthermore, there has been a substantial increase in investment in the Indian film industry, which has seen a greater improvement in the industry. The question remains how significant the influence this turn around in the Indian film industry might have on consumption of Hollywood movies in India and South Asia, and whether a corporation between Bollywood and Hollywood would prove not only commercially viable, but culturally tenable given the finite similarity between the respective film settings. To begin with, the growth of Bollywood has massive impacts on the market share for Hollywood films in India and most parts of South Asia. An increase in consumption of Bollywood films in this region translated to a decrease in consumption of Hollywood films. Given the conservative nature of the inhabitants of this region, coupled by the appeal these Bollywood films had on the population, there has been an observable decrease in consumption of Hollywood films. Ayres (2005) notes that Bollywood industry records an annual output of about 1000 films, a figure that far exceeds the output of Hollywood, which implies that their consumption has far exceeded that of Hollywood films, thus the sustainability. Ayres also observes that the Indian films are slowly adopting western antics and creating hybrids that are finding their way to markets that were once dominated by Hollywood films. Rai(2009) notes that although Hollywood is still looking for synergy in Bombay, currently Mumbai, their approach is more of exploitative than partnership, a situation that seems to stimulate the proliferation of indigenous Bollywood media houses. Rai points out the fact that one Bollywood actor, Ram Gopal Varma directed the film Ek Haseema Thi (2004), which was produced by the Twentieth-Century Fox, a phenomena that Varma termed as a strategic pursuit of the best of the West. This infiltration has the potential of alienating Hollywood films completely, in favor for Bollywood films. Analysis of the Indian film market shows that Hollywood remains a formidable competitor to Bollywood. Regardless of the slim success so far recorded by Hollywood in their attempt to penetrate the Indian film market, there is hope that with increased investment, the reluctance of Bollywood to work hand in hand with Hollywood will subside, the result of which will be a flourishing partnership, or even a formidable corporation. Furthermore, the competition faced by Bollywood from Chinese film industry can only be overcome through adoption of Hollywood marketing and distribution strategies, as was the case with Indian film ‘My Name is Khan’, which was made famous by the Twentieth Century Fox. The overall belief is that this apprenticeship tradeoff between Bollywood and Hollywood might result in the Indian market becoming more liberal to Hollywood. Best strategy for Bollywood to go global Bollywood as an industry has been the heart of Indian film. The films are usually characterized by love themes, revenge and to a smaller extent struggle for power and wealth. As aforementioned, the films are generally popular in India and South Asia. However, in recent times, in the wake of being labeled the largest film production industry in the world, there has been an attempt by this industry to go global. The desire among Indian filmmakers to reach out to outside audience is considered lucrative, even though the onset of this venture was marked by attempts to reach only Indians in diaspora, or those who understand the language. Proper strategies are therefore necessary for such an objective to be achieved. Currently, Bollywood has adopted a pattern of vertical ownership integration, which involves the ownership by prominent companies of production, distribution, exhibition and financial rights, a situation typical of Hollywood. Schaefer et al(2013) notes that prominent production companies such as Yash Raj Films and Percept Picture Company have an integrated production means, a move that has resulted in significant improvement in budget allocations and choice of actors to be included in a film. This move, coupled by the liberalization of the Indian economy is driving the industry towards making it to the global stage as a formidable force. Another strategy that seems to be working well for Bollywood in its quest to go global is the change of content of the films to attract more viewers. Jones et al. (2008) observes that the change in content of Indian films translated to widespread consumption even in the US, unlike initially when consumption was only confined to India and bordering regions of South East Asia. Jones et al. also notes that the opening of Indian film industry to investors from abroad has had significant effect in the quest for going global. Despite the fact that the film ‘Saawariyaa’, financed by Sony in 2007 was not quite successful, it helped lay ground for future investments, given that the cost of film production in the Indian market is comparatively low. According to Jones et al, for Bollywood to completely go global, the popularity of satellite and other distribution channels have to go a notch higher. Fortunate enough, this is the current trend in Bollywood. The platform has made it possible for Bollywood products to penetrate international markets, creating awareness and providing alternative films from other parts of the world, even as it attracts foreign financiers. In addition, Jones et al. observes that the increased star power of Bollywood actors is also a fine catalyst for the industry going global, even as they take foreign audiences by storm. Globalization in the film industry is no longer an idea to be contemplated upon, but is a requirement for the success of any film making industry. Having grown from being conservative to liberal, Bollywood must adopt integration patterns that will enable proper coordination of production, distribution and exhibition procedures, improve on their film content to make them more appealing to diverse population of the world, and make use of such platforms as satellite TVs in order to make their products more accessible. Anticipation of the future of Bollywood and Hollywood Hollywood is an established film industry, unique in its organization as well as film content. This aspect puts Hollywood in the opposite side of Bollywood. While Hollywood films have been traditionally known to involve diverse themes, from romance to action packed movies, Bollywood has been traditionally characterized by themes involving love or revenge, with Hindu language prominently used. However, recent changes in the film industry have resulted in Bollywood adopting Western antics, and even collaborating with Hollywood in the production of films. The future of this association and the projected outcome, though uncertain, can be deduced. Having adopted steps towards globalization, Bollywood has made it possible for Western ideas to be incorporated both in the content as well the organization of its production procedures. Once Bollywood fully adopts an integrated production partnership, the resulting pool of diverse ideas will allow for content adjustment in order to meet standards of global consumption. It is worth noting that the step towards this goal is pioneered by Hollywood, the success of which will imply an efficacious infiltration of Hollywood into the Indian film market. Secondly, once the Indian film market goes global, there will automatically be cross-border co-production of films between Bollywood and Hollywood. Apparently, this is the most sought-after objective of Hollywood. The major reason for this is that with co-production, the vast Indian market will rally behind such films as they will involve actors from among their own. This large and growing Indian market is what Hollywood aims to tap in. Finally, a good number of analysts have shown that most film investors in Bollywood are interested in making Indian films appealing at the international stage. To achieve this, the transfer of marketing and production strategies that are used majorly in Hollywood is necessary. Such strategies can simply be transferred through apprenticeship tradeoff with global corporations in the film industry, majority of which are affiliated to Hollywood. Globalization of the Indian film industry therefore promises a lot more benefits both to Bollywood itself and to other film industries such as Hollywood. In as much as Hollywood stands to benefit from such an incidence, Bollywood also stands to benefit significantly. For instance, globalization of Bollywood in all aspects will ensure the industry fights off the competition it faces from the Chinese film industry. Furthermore, the value of non-cash benefits through knowledge transfer and cultural exchange within the film industry that Bollywood will obtain is immense. This will ensure that sustainability of Bollywood remains intact, through improved creativity and production of better quality films. References Ayres, A., Oldenburg, P., & Asia Society. (2005). India briefing: Takeoff at last?. Armonk, NY [u.a.: Sharpe. Jones, G., Arora, N., Mishra, S. & Lefort, A. (2008). Can Bollywood go global. Harvard Business School. Lorenzen, Mark. (2008). On the globalization of the film industry. Retrieved from http://openarchive.cbs.dk/bitstream/handle/10398/8146/x656557108.pdf?sequence=1 Rai, A. (2009). Untimely Bollywood: Globalization and Indias new media assemblage. Durham [NC: Duke University Press. Schaefer, D.J & Karan, K. (2013). Bollywood and Globalization: The Global Power of Popular Hindi Cinema. South Asia. Routledge. Read More