{"id":660,"date":"2020-07-01T15:17:12","date_gmt":"2020-07-01T09:47:12","guid":{"rendered":"https:\/\/opiniown.com\/?p=660"},"modified":"2020-07-01T15:17:12","modified_gmt":"2020-07-01T09:47:12","slug":"economics-of-the-indian-film-industry","status":"publish","type":"post","link":"https:\/\/opiniown.com\/economics-of-the-indian-film-industry\/","title":{"rendered":"Economics of the Indian Film Industry"},"content":{"rendered":"

We discuss how Bollywood is no different than other industries, new challenges in it and our predictions about the economics of the Indian\u00a0film industry.<\/em><\/p>\n

Since Sushant Singh Rajput\u2019s suicide, there have been lot of revelations about mafia and nepotism in the Indian film and music industry. If you ask any experienced business professional that if he or she is shocked by this, then I doubt they will be surprised. We all want to believe that markets need to be free, but they seldom are.<\/p>\n

Before we dive into the economics of the Indian film industry, let’s discuss different types of markets. Dynamics of any market a be defined two parameters, that is \u201cease of market entry\u201d and \u201cintensity of competition\u201d. Both these parameters are inversely proportional. For example, if market entry is easy, then competition is going to be highly intense and vice versa.<\/p>\n

\"relay-race-competition-stadium-sport\"<\/p>\n

Further if you analyze various markets, you will understand that markets where competition is very high, cost pressure is also very high and players are barely able to meet their expenses and make decent profit. And when profit is marginal, the appetite to take risks and innovation goes down drastically. It becomes very difficult for any player in a highly competitive market to shine out. These markets thus become highly commoditized. Maybe that\u2019s the current case the mainstream Indian film and music Industry.<\/p>\n

\"oligopoly<\/p>\n

On the other hand, markets where players manage to attain a state of monopoly or oligopoly, players have adequate appetite to innovate and experiment. Peter Thiel explains this scenario in detail in his book Zero to One where he quotes, \u201cMonopoly is the condition of every successful business.\u201d Companies like Google, Microsoft, Apple have been able to innovate only because of their monopolistic or oligopolistic market position. Players who are monopolistic in their markets will always hide this fact, and players who are not will always portray themselves with a unique selling proposition.<\/p>\n