Critical Study of Financial Practices and Systems in Organized Feature Film Industry Sectors in India

Article No.23

CRITICAL STUDY OF FINANCIAL PRACTICES AND SYSTEMS IN ORGANIZED FEATURE FILM INDUSTRY SECTORS IN INDIA

Amit Padmakar Oak Faculty, SASMIRA

Abstract: The Union Government of India gave industry status to the movie business in the year 1999. As a result there has been a greater involvement of the Corporates in producing and financing the movies but the Film Industry and Hindi Film Industry has yet to acquire the character of professionalism on a large scale.

Film Industry is that which is involved in producing and distributing movies. The Film Industry involves motion pictures studios, manufacturers of technical equipment and software, distribution and personnel on a global scale.

The Financial Management aspects for Hindi Feature Films are the subject matter of the study. The biggest hurdle today is getting finance for the Feature Film Production in India. From writing the screen play to the final release of the movie, there is value added at every step of movie making.

The proposed study has the following objectives: 1. To understand the practices of Film Financing for Feature Films 2. To develop a financial plan with criteria of ROI and Debt Equity as a system to verify the financial feasibility of a feature film. (Budget of the film assumed to be Rs 2 to 4 crores). 3. To receive the opinion and judgment of various stake holders on a model.

Keywords: Financing, Business Model.

Introduction

The emergence of Cinema as the most popular medium of entertainment is one of the significant events in the history of mankind. No medium has acquired such a universal acceptability and attraction, as the cinema within a short period of its invention. It is appealing to all, the intellectual and the layman, the young and the old, the rich and the poor. Millions of people see movies regularly in all parts of the world. It is the wide popularity which has made cinema a great commercial endeavor. Within a few years of the invention of scientific mechanism of cinema it has grown into a regular industry.

This study shall focus on the philosophical path of the research. Cinema is such a medium of entertainment that it is very attractive and also very entertaining. It is full of imagination and the viewer sees himself into the body of a hero or a heroine or any such character with which its profile matches. This is the true source of entertainment. Similarly people have a different kind of curiosity about the actors; they like to read the love stories, gossips of characters which are very popular. Even old films and songs make

AIMA Journal of Management & Research, November 2012, Volume 6, Issue 4/4, ISSN 0974-497 Copy right © 2012 AJMR-AIMA the persons nostalgic. So if we look at cinema absolutely from marketing point of view it is a product which is mysterious.

However this product needs very high level of intelligence in terms of creativity which can catch the pulse of the public. There are many such examples of creativity. Now if we see Cinema from the view point of finance, in India we find that the finance available for making a film is believed to be invested from the source of unaccounted money.

From the year 2000, Cinema has been given the status of industry. Now almost a decade has passed. Once we accept that it has a status of industry then logically it should be at par with in respect of the process of sourcing the finance as shall be applicable in case of any industry which is service one. The reason is the intangibility characteristic of the product. For example if an entrepreneur approaches a bank with a proposal to finance a hotel with accommodation facility, in this case the occupancy of the rooms cannot be guaranteed. In case of cinema, similarly the box office collection for the show has no assurance. But over the last ten years the cinema producer has not only one source of collection that is box office, but now he can receive revenue from sale of various rights like internet and mobile, also he can sale such rights either at pre production or post production.

In case of Cinema the level of risk is higher than any other manufacture of the product. But this market also follows higher the risk higher the gain. Here the gain is of the nature which we can call super profits, super premium and unprecedented windfalls.

Thus the dream of this academic effort is to draw a path for such young talent for making a film which will remunerate him as an entrepreneur (Producer), over and above as an artist/actor/director and also earns up money to plough back as capital, for the next film. Similarly with de risking, he will be insulated from agency problems and vicious circle track. This shall be dealt adequately from the view point of academics in forth coming chapters.

The researcher does not look at this research only from the theorization point of view but also look at it enriching application value and catalyzing such youth in future.

Film Finance Evolution and Sources

Film finance is an aspect of film production that occurs before pre-production , and is concerned with determining the potential value of a proposed film. In the United States, the value is typically based on a forecast of sales over a 10 to 15 year period, beginning with theatricalrelease , and including DVD sales, and release to cable broadcast television networks both domestic and international and in-flight airline licensing.

Film finance is a subset of project finance, meaning the film project's generated cash flows are used to repay investors, and generally not from external sources. This however has been met with new ways to protect principal, and insure against loss of investor's assets.

Bollywood spends significantly more time in the production stage compared to Hollywood. Some possible reasons are, • Cost overruns due to inadequate planning in the development stage itself and • Lack of smooth funding during various stages of production (especially in the case of mid and low budget films) • In the post-production stage, too, Bollywood tends to spend relatively lesser time compared to its US counterparts.

Some probable causes are, • Unavailability of funding (due to the film being over-budget at the production stage itself) • Lack of importance given to post production • Haste in releasing the film in order to recover the money.

Present Financial Scenario of Film Financing

The seeds of corporatization have been sown and early forms of vertical integration between content producers, distributors, exhibitors, broadcasters and music companies can be observed in the industry. The stakeholders, especially the new generation of,

• Producers, • Directors and • Performers, are now much more receptive to international best practices to redefine the way of doing business. Better discipline has resulted in a slow turnaround in the industry, which recovered from an unsuccessful 2002 to record better profitability in the last two years.

Literature Review

It is needless to stress upon the significance of literature review not only in case of writing a thesis but even for a small or elaborative research. The literature review is made with two dimensions,

1. Critical reading for the purpose of developing the conceptual clarity of the context. 2. To examine the relevance to the context of the study by following the process of elimination.

The researcher has not only conducted literature review in India but he was fortunate and effortful to visit Universal Studio, California State USA where he spent almost two weeks to review the literature. The researcher came across very valuable material as

AIMA Journal of Management & Research, November 2012, Volume 6, Issue 4/4, ISSN 0974-497 Copy right © 2012 AJMR-AIMA regards overall film making and in particular the issues related to the topic of the research. Since the researcher was then a convener for Brihan Maharashtra Mandal’s bi-annual Convention visited California for three months. Specifically a fortnight was card out for this period for the purpose of visiting the studio and library of California State University. This resulted into broadening of perspective about the issues of the topic.

Voluminous information is available as regards to film making. However while reviewing the literature in the light of the context of the study that is financial plan, critical parameters, financial feasibility, debt and equity proportion are the major elements of consideration. Most of the literature talks about art, story, creativity, film making process and such other things. The select material with concentration on financial dimensions is reviewed thoroughly.

Data Analysis and Findings

Following are the various sources of literature review. 1. Film Dictionary 2. Books 3. Journals & Publications 4. Websites 5. Reports 6. Magazines 7. Government Notifications 8. Working Committee Reports 9. Thesis 10. Newspapers 11. Encyclopedia

Going Global

On the global scene, Hollywood is the undisputed leader in the entertainment industry. However, many other regional film industries are competing at the second tier. Italian, French, British, Japanese, and Hong Kong-based industries are among them. In the recent years, the bug of globalization has hit Bollywood. With the expansion of its operations in the overseas markets, even though to a limited extent, Bollywood has attracted a great deal of international interest.

One of Bollywood's most recent and prestigious achievements was the film Lagaan's nomination for the Oscar in the Best Foreign Film category in 2002. Even though India witnessed a slight disappointment when it did not win the award, the nomination helped Bollywood gain international presence and proved that Indian films have the potential to make it big overseas.

Lagaan was a door opener for Bollywood in the international market as it has made the world aware of Indian cinema. In 2002, Devdas became the first Indian commercial film

AIMA Journal of Management & Research, November 2012, Volume 6, Issue 4/4, ISSN 0974-497 Copy right © 2012 AJMR-AIMA to be shown at the Cannes International Film Festival. Earlier, Indian films at Cannes included stark tales of poverty, feudal oppression and unemployment made by renowned directors like Satyajit Ray, Shyam Benegal and Raj Kapoor. 1 Bollywood is slowly entering the consciousness of western audiences and producers. Mira Nair's Monsoon Wedding, which won the Golden Lion Award at the Venice Film Festival and was nominated for a Golden Globe in the U.S., earned over US $30 million worldwide on an investment of just US $1.5 million and is set to become a Broadway play in 2004. Andrew Lloyd Webber's musical production Bombay Dreams, with replete with all the ingredients of a Bollywood film, is a hit in London's West End and is set to open soon on Broadway. 2 In August 2002, film ‘Mr. & Mrs. Iyer’ was named the Best Asian Film at the Locarno Film Festival in Switzerland and in October 2002 it won the best Feature Film Award at the Hawaii International Film Festival. 3

Rationale of the study

Need of Framework In 1987 Faulkner, R.R., Anderson, A.B. advocated to treat each film as a short term project. If the film maker agrees to this stand then, a frame work for its financial workability is essential. 4 Epstein, E.J 5 has recognized the significance of money part in respect of the big picture in Hollywood to empower more organized way to make a film which is indirectly de risks the film making. While browsing the site, Mrinal Sen interviewed by Udyan Gupta, distills the supporting view for the need of having systematic approach of the funding and its monitoring.

The film sector was accorded the ‘Industry’ status in 2000. There was no rigid format or process of making a film except that the onus of film completion was placed on the producer. It has been observed that majority of the Indian films are never completed on scheduled time. As a result it increases the overall planned budget, making it difficult for the producers to source funds in the last stages of filmmaking.

The initial organised financing comprised of producers (private or limited companies, private traditional financiers, sole proprietors, partnerships and new players) and banks and financial institutions.

Our specific research was based on finding answers to the following broad questions:

1. What is the current structure and composition of Bollywood and Hollywood? 2. Who are the players involved in each stage of the value chain?

1 nishitdesia.com, Hollywood Vs Bollywood 2 nishitdesia.com, Hollywood Vs Bollywood 3 nishitdesia.com, Hollywood Vs Bollywood 4Short-term projects and emergent careers: evidence from Hollywood. American J. Sociol. 92/4, 879– 909.

5 The Big Picture: Money and Power in Hollywood. Random House, New York.

AIMA Journal of Management & Research, November 2012, Volume 6, Issue 4/4, ISSN 0974-497 Copy right © 2012 AJMR-AIMA 3. What are the existing linkages between Bollywood and Hollywood? 4. What are the major strengths and weaknesses, qualities of workforce and talent in Bollywood as compared to that in Hollywood? 5. What are the potential and strategic options for Bollywood with regard to Hollywood and globalization, pursuant to initiatives and incentives projected and provided by the Indian government and the industry? 6. What are the differences in the legal framework and constraints within which these film industries currently operate and what are the areas that require improvement in Bollywood? 7. What are the initiatives / policy issues that should taken at the governmental level to promote Bollywood?

This study aims at:

1. Identifying the needs of Bollywood and suggesting certain initiatives / policies that could be adopted by the Indian government to encourage and enhance the Indian film industry. 2. To study the reasons for Feature Films in the organized sector, stuck at Pre- Production, Production and Post Production stages – both Financial and Non- financial. 3. To study the Financial Management aspects of Organized Feature Film Industry Sector. 4. To study Process of Estimation of Required Funds. 5. To study Sources of Raising Funds. 6. To study Cost of Funds. 7. To study Financial Viability Parameters. 8. To study in details the actual process of Feature Film Financing in the current scenario. 9. To study the Film Financing process adopted by the banks and Financial Institutions in the angle of the lending institutions. 10. To find out the gap between the lenders and borrowers perception. 11. To study the financial effectiveness of an Organized Feature Film Industry Sector, which is financially well managed.

Objectives of the Study

Objectives The proposed study has the following objectives: (with reference to organized film production houses)

1. To understand the practices of Film Financing for Feature Films. 2. To develop a financial plan with criteria of ROI and Debt Equity as a system to verify the financial feasibility of a feature film. (Budget of the film assumed to be nearing to Rs 2 crore) 3. To receive the opinion, judgment and suggestions of various stake holders on a financial framework for its validity.

AIMA Journal of Management & Research, November 2012, Volume 6, Issue 4/4, ISSN 0974-497 Copy right © 2012 AJMR-AIMA 4. To consider a financial framework as a model after incorporating the suggestions, acquired through primary data collection.

The above objectives have an impact on the methodology and other dimensions of further course of research.

If the following matter is reviewed it is concluded as learned statements which are worded as follows

Hypothesis – 1(H1)

A systematic Financial Appraisal by working out the Return on Investment, Debt/Equity Ratio and Cash Flow prior to making of the feature film gives the Financial Feasibility for a feature film .

Hypothesis – 2 (H2)

A financial framework which is developed for analysis of Financial Appraisal is useful for understanding and assist in executing Financial Feasibility.

RESEARCH METHODOLOGY

Methodology

With a view to attain the above purposes and to take a stock with reference to H1 a literature was reviewed.

Data Collection

Apart from the secondary sources of data collection, Questionnaire method for data collection was administered. A questionnaire was administered to the Organised Film Production Houses and the Banks and Financial Institutions as well. In addition to the above interview method and verbal enquiry method was also adopted for the data collection.

Population

It is inferred from the table and the chart that average more than 50% of the films are produced in Hindi and Marathi language.

For the context of the study it is essential to determine the basis for the recognition of any film production house which can be called as OFPH. (Organized Film Production House) The following parameters and steps were followed for the purpose.

Listed Company

AIMA Journal of Management & Research, November 2012, Volume 6, Issue 4/4, ISSN 0974-497 Copy right © 2012 AJMR-AIMA In India, the best legal status and high level of organization is assumed if the company is a public limited company. In order to be listed on any stock exchange the company has to follow SEBI guidelines which give further higher level of organization for any company. Therefore, listed companies which are in feature film production are seen.

Although the private limited company is not listed its organization level, turnover and film production does not get affected just because it is a private limited company.

The list of such companies was source from: • Digital Source, • PROQUEST • CYGNUS • CMIE.

In order to decide the population it was necessary to find out the producers who are working as organized film production house. The parameters which were and it was found that there are twenty eight such OFPH. Thus the population is determined as number 28.

Census Survey

It was decided to have a population survey for the film producers that are to govern all 28 of the OFPH. Accordingly all 28 of the OFPH have been contacted and initial discussion was held with each of them. Out of these 28, 22 OFPH responded well. Other 6 have refused to discuss and give any information. The thesis includes the outcome of these OFPH responses.

As the nature of the research is exploratory, the researcher thought it fit to concentrate on those feature film producers who are better organized. The other characteristic which was considered as appropriate was to select them on the basis of their localization. The obvious advantages are seen from the Webster’s theory of localization of industry, which are available to concerned OFPH. Majority of them are in Mumbai. 73% of the feature films produces are by 22 production houses out of 28 (Source Film Producers guild and the FICCI report on Film Industry)

From the parameters of 75% the survey is of representative nature and it covers almost 75% of the population which is much more above the threshold of 50% which is normally acceptable.

As the all the elements of 28 OFPH are covered for the research there was no specific need to form any sample survey separately.

Additionally in order to view the other side of the coin, the banks which have financed some films in the past are also administered. The data sourced from these banks and Film Development Corporations helped in preparation of the financial framework.

AIMA Journal of Management & Research, November 2012, Volume 6, Issue 4/4, ISSN 0974-497 Copy right © 2012 AJMR-AIMA The names of such banks & Film Development Corporations are: • IDBI Bank • Exim Bank • Yes Bank • Axis Bank • National Film Development Corporation.

Secondary Data

The researcher reviewed a number of sources for receiving readymade frame work or model. However after the attempt made in India and also during the stay in USA, the literature available at Universal Studio California, any such frame work or model could not be come across.

The basic objective of the methodology was to develop a framework leading to projected cost and revenue and computation of suitable Return on Investment, Debt- Equity and Cash flow.

With reference to the film production process it was necessary to obtain standard cost for each activity of the process. (As a part of secondary data, the standard rates are taken from the websites and offices of different unions such as the Junior Artist’s Union, Assistants of the various departments union, etc.)

The details of the secondary data sources and what has been received from the data is elaborately mentioned in the chapter two. The distillation of the information process is easily comprehendible from the Appendix 1.

Primary Data.

The data is sourced from 1. Verbal Enquiry 2. Questionnaire for organized film production houses 3. Questionnaire for Banks undertaking Film Finance 4. Development of a Financial Frame work

The following were the assumptions for the financial framework. • Total Term of Finance from availing to repayment is twelve (12) months. • No time value of Money is taken into consideration as the film Production activity is of 60 days only and the repayment is assumed within 12 months. • Total term of Finance from availing to repayment is twelve (12) months. • Total Debt to Equity is 70:30. (Own Funds 30% and Borrowed Fund 70%) • Interest Rate Calculated @15% per annum. • Repayment of Loan is one year. • All Film Production activities are segregated into Pre Production, Production and Post Production. • Contingency is provided of 10% of total expenses.

AIMA Journal of Management & Research, November 2012, Volume 6, Issue 4/4, ISSN 0974-497 Copy right © 2012 AJMR-AIMA • Expense figures are as per the industry standards, rate of the various unions in the film industry, raw stock rate quoted by the suppliers. • Revenue items are consistent to the industry and the additional source is the data provided by KPMG & FICCI Reports on the Entertainment Industry, CRISIL, Nirmal Bang, Film & Guilds association, Financial Institutions. • Requirement of the funds is assumed as per the industry standards as 20% for Pre production, 40% for production and 40% for post production. • The inflow of own funds and the bank finance/borrowed funds shall be having the same proportion as mentioned above. • 20% funds assume to be disbursed at the beginning of the project. 40% after 15 days of commencement and 40% after 45 days of commencement of the project. • Payment of Interest is considered on Quarterly basis and the principal amount would be paid at the end of the year. • The period of the cash flow is assumed to be of 15 days progressively. • Security should be provided as per the terms of the bank. • The budget of the film is assumed to be of Rs. 1.8 crores.

Therefore a framework was developed for which the following steps were followed, 1. It was classified into two parts that is cost and revenue. 2. The items of cost were identified to maximum details with reference to the process of film production.

Financial Frame work for the ticket size of Rs. 1,80,00,000

While developing the Financial Framework the amount arrived at Rs. 1,80,00,000 is on the basis of that the amount is required by any film producer for producing a film with minimum compromise with the creativity. Thus it can be called as the minimum ticket size of the film production.

Working of figures in the Frame work.

In order to prepare the Financial Frame work, a detailed budget explaining the proposed cash out flow during the pre production, production and post production was prepared.

The entire budget was segmented into 22 different heads as follows. 1. Director 2. Story, Script, Dialogue and Lyrics 3. Artist Payments 4. Junior Artists 5. Dubbing Artists 6. Production Unit Salaries 7. Music 8. Raw Stock (up to 1 st release print) 9. Laboratory Charges (Up to 1 st Print) 10. Studio and Shooting Location Hire 11. Equipment Rental

AIMA Journal of Management & Research, November 2012, Volume 6, Issue 4/4, ISSN 0974-497 Copy right © 2012 AJMR-AIMA 12. Travel and Transport 13. Food and Hotel Expenses 14. Sets, designing, supervision, construction and special properties. 15. Costume, Make up material 16. Editing and Post Shooting 17. Recording and Re-recording 18. Expenditure on Publicity, Promotion and Release of Film 19. Digital 20. Miscellaneous Expense 21. Insurance 22. Unforeseen Expenses

The above heads are the result of the verbal discussion with the film producers and director.

The researchers experience with the National Film Development Corporation also has gone a long way in finalizing the budget heads. The banks and film development bodies to whom the questionnaire was administered have also given a positive response about the budget heads.

Working of ROI In any industry or trade generally if ROI is more than 15% it is considered very reasonable. In case of films, it must be higher than at least by 5% because of the risk and nature of the product. This is considered as critical minimum or cut off rate additionally as per the principals of financial management 5% are added on account of business risk and 2.5% are added as financial risk. Thus it aggregates to 27.5% which is pretty reasonable after considering overall merits and demerits of the product. The figure takes care of rewarding returns for creativity and entrepreneurship even if a young graduate from FTII produces the film.

Debt and Equity

Considering the nature of the process and product being a film, calls for the constraints over attracting the debts. In FMCG, services, software, electronic goods the debt has more attraction because of its value addition. In case of a film the value addition is unpredictable and there is no upper limit for the same. Generally the service industries can trade on its equity to the extent of 3 times. With a conservative view, the equity is considered as 33% which is 8% above of 25% of margin money as per RBI guidelines applicable to any general industry. Here additional 8% stake is sufficient to take care of promoter’s risk. 67% debt is conveniently possible because of globalization. The debt part now can be sourced from Foreign Direct Investment for which the Governmental permissible limit is 75%.

So 30-70 equity debt ratio makes the frame sound and puts in the zone of higher feasibility.

The decision regarding sale of any type of right, at what price and at what time is to be made is very critical. Cash Flow is prepared showing the position of receipts and payments after every 15 days is considered which includes the payment of interest also. The positions do not show anywhere any negative figure of balance and therefore improves the feasibility of the frame.

Limitations of the study

Every study in it natural course have certain limitations. However this study does contribute to the research although having following limitations.

• Firstly the spread of the OPFH as regards financial decisions, the main offices of these OFPH are situated in Mumbai concentrated. Therefore, small OFPH like producer and director Paritosh Sengupta and Nandikar from Kolkatta are not covered.

• Secondly, creative young film makers can have only small ticket size, the financial framework is having the ticket size of Rs. 1.8 crores (However, even for a big ticket size, the proportion of items of expenditure and revenue shall not make any sizeable difference)

• Thirdly, as the study is having absolute and pioneering exploratory nature, the scope for correlation or regression techniques was very marginal.

• Fourthly, the census itself is of a very small size as compared to Hollywood OFPH’s and (Bollywood) Indian OFPH’s is in the beginning stage.

• Fifthly, the film makers do not have a very high level of professionalism in respect of financial aspects which show of very high level in respect of technical aspects of making of a film.

Summary of conclusions Status of the Hypothesis Acceptance From the above analysis, inferences and conclusions throw light on whether, the Hypothesis is proved or disproved.

Hypothesis – 1(H1) • A systematic Financial Appraisal by working out the Return on Investment, Debt/Equity Ratio and Cash Flow prior to making of the feature film gives the Financial Feasibility for a feature film.

This Hypothesis includes the words systematically. Whenever we refer the word system, it consists of three parts, a) Input, b) Process and c) Output. Here preparation of financial estimation is a part of input. The OFPH do prepare the estimates. However, the items and

AIMA Journal of Management & Research, November 2012, Volume 6, Issue 4/4, ISSN 0974-497 Copy right © 2012 AJMR-AIMA the rates are taken at general level and not so much in particular as much shown in the framework. Most of the figures are calculated by personal judgment. (In the framework these figures are taken as per KPMG report and detailed activities particulars are taken for pre, production and post production stages of film making from the ….. which is more systematic.) The process part of the system relates to production period of which care is taken in the model. Output part should render ROI, Debt-Equity Ratio and cash flow from the estimations made. However, the analysis shows the following results.

1. ROI is not computed by 57% respondents of the sample. 2. 60% do not calculate the percentage of ROI. 3. Only 9 respondents work out Debt –Equity ratio which leads to financial feasibility. 61% respondents do not compute Debt-Equity ratio, which leads to financial feasibility. 4. Only 6 respondents are affirmative in answering that they prepare cash flow. 74% do not prepare cash flow. 5. As far as financial feasibility is concerned only UTV and Mukta Arts are two OFPH who are very systematic in preparing the framework and consider ROI, Debt –Equity Ratio and cash flow. 6. By and large it is concluded that 91% do not follow a systematic approach. 7. From above point number 1 to 6 proves the first hypothetical statement.

Hypothesis – 2 (H2) • A Financial Frame work which is developed for analysis of Financial Appraisal is useful for understanding and assist in executing Financial Feasibility.

During the collection of the primary data, on the first page itself, the assumptions were given to the respondents. Similarly the framework also was shown to them for their comments and facilitating, to respond the questions, the need of such framework is supported by all of them and few comments about the framework are mentioned here.

Mr. Sanjay Narvekar of Katha production produced a film in the year May 2011 where he mentions that if he would have had this frame work prior to his film making he would have been immensely benefited.

Secondly,Mrs. Aditi Deshpande of “my production” categorically mentions about the application of this frame work in seeking the finance as the frame work has given a better feasibility to her film proposal. Above conclusions and evidences is the basis for acceptance of second Hypothesis also.

Financial Frame Work to Model

THE FRAMEWORK NOW IS CALLED AS MODEL AS PECUNIARY WORKABILITY ASSESSMENT MODEL (PWAM) . The revision of model has

AIMA Journal of Management & Research, November 2012, Volume 6, Issue 4/4, ISSN 0974-497 Copy right © 2012 AJMR-AIMA rendered abundantly sound basis to the framework and hence is eligible to be considered as a model.

Contribution to the body of knowledge

The researcher has contributed in terms of the model which has passed through the acid test of validation of a framework leading to PWAM.

Such a model in India having the research inputs is not present in Indian film making industry. The model is the outcome of an approach to consider film making as an industry in true sense. If every film maker follows this model then in future, it will deserve to have the status of an industry in real sense as it transforms virtual estimations into real and live estimations because of three parameters which flow from the discipline of financial management as basic tenets of feasibility that is ROI, Debt-Equity and cash flows.

Further Scope of Research

This research although contributed in terms of foundation for financial feasibility in the form of a model, there is wide scope for further research which is as follows.

• Firstly, the model can be improved with the finance provided by hedge funds. • Secondly, whether hedge funds companies can now be benefitted by de-risking the films? • Thirdly, whether young creative producers now be educated in respect of financial aspects and render them required insights for the success of a film. • Fourthly, another model can be explored for theater (drama) which is a separate sector itself. • Fifthly, another sector where reproducing of nostalgic films like “Hum Dono” where a number of items like story/dialogue do not required to be paid. • Sixthly, banks and many others have hesitation for financing a film. Financial de- risking model can be developed to increase the confidence of banks and other financial institutions. • Lastly, further research can be in the area of finding out other measures of de- risking film making and bringing the film finance to the level of industry finance as the Government has given the status to film making of industry. The scope of the last point can continue for another ten years down the line.

Model and Suggestions In this chapter the suggestions are made to different stake holders/role players. The backward linkage of suggestions is either to the analysis and findings or to the literature review are the supporters of the suggestions.

Further the suggestions are classified into

1. General Suggestions. 2. Within the context. 3. Outside the context as under Other Suggestions.

A care has also been taken to comment on the feasibility of the suggestion and probable benefits.

Conclusion

Be it Hollywood or Bollywood, both prove the saying, "there is no business like show business." In spite of there being no definite formula for success and the risky nature of this business, the film industry has always attracted maximum attention and is still gaining in popularity.

In recent times, Bollywood experienced the increasing influence of Hollywood, especially on business and legal practices. The reason for this has been the ever-growing international exposure that talent in Bollywood is getting as a result of the globalization of the entertainment industry.

With India opening its doors to foreign investment in the film industry and permitting financial institutions to fund film projects, Bollywood is steadily witnessing a huge change in its outdated business and legal practices. It is very important to realize that films will always remain a risky business but becoming a business can mitigate the risk. Several Hollywood companies have shown an interest in co-production of films in India and the distribution of Indian productions in English. They have also expressed interest in bringing more of Hollywood to India, such as investments in infrastructure facilities, studios and multiplexes. To complement the foreign players and attract investments from overseas, the Indian film industry will have to work better and become more disciplined and organized.

Corporatization and globalization are the buzzwords in Bollywood today. The transition process to move into the next phase has begun with issues like,

(a) Drawing up of well-defined finance models (b) Planned organization structures (c) Transparency in dealings and accounting, and (d) Addressing the global market, gaining importance.

Mark Twain once said, "For East is East and West is West and never the twain shall meet.” However, with Bollywood's outstanding features like cost effectiveness, a local, English-speaking populace, a large talent pool and a rich heritage of culture, history and geography, are creating areas of synergy with Hollywood and the 'twain' are set to meet! However, for any such tie ups or new forms of film making, PWAM is essential to be applied.

AIMA Journal of Management & Research, November 2012, Volume 6, Issue 4/4, ISSN 0974-497 Copy right © 2012 AJMR-AIMA This model being the foundation work possess potential for application in respect of such new forms with necessary modifications in items of cost, items of revenue and the proportions of these elements. The new PWAF developed for different forms shall be the new versions of the basic PWAM.

Therefore it is suggested that by using PWAM if the films are financed then the objective of the board shall be achieved more efficiently and effectively.