Digitization in the Indian film industry: Background, analysis of current trends, strategies and recommendations

Abstract

Shah Rukh Khan (SRK), referred to in the media as “Baadshah” or King of Bollywood, one of the most successful film stars in the world, sat in the boardroom of Red Chillies Entertainment, his own film production house based in Mumbai. Red Chillies Entertainment was founded by SRK and Gauri Khan, his wife in 2002. Since its inception, the company had been climbing the ladders of success in distribution and production of motion pictures. [1] Coming from a humble background, SRK’s success story was a trademark ‘rags-to-riches’ story of how an industry outsider, conquered the hearts of millions of moviegoers across the world and established himself as the undisputed king of box-office over the course of more than two decades of Indian Film industry. Red Chillies Entertainment had been privy to success in huge blockbusters across several genres of movies – most of them starring the superstar SRK himself. Equipped with the vision of making India’s first full-length superhero feature film, he laid the foundation of ‘redchillies.vfx’, which is now India’s premier visual effects (VFX) studio. [2] Along with parenting VFX – special effects, Red Chillies Entertainments has branched itself into several other domains of productions as well, including Film Production and Multi-media Equipment management. While the Indian Film Industry faced several challenges, including the cannibalization of the domestic market by Hollywood films, lack of original and impactful storylines, piracy and considerably lower standards of post-production, SRK was currently brooding about the impending proposals by Netflix India, Amazon Prime Video and Hotstar on exclusive licensing of all of his production house’s future movies to be streamed on their platform alone. He had started acquiring the rights to his own past movies and bringing them under the common banner of Red Chillies Entertainment with the view of owning any future revenue streams from his evergreen classics. The ubiquity of YouTube among the Indian populace had enabled him to generate revenues by providing the option of renting or purchasing movies online, but the response had been subdued majorly due to the rampant piracy and high price-sensitivity of the Indian consumer for past movies. The average viewer preferred to wait for the movie to release on cable television rather than pay for it online. The video-on-demand (VOD) industry also failed to show any considerable promise in the short term. The proposals while attractive would mean losing partial control over the distribution of content and sharing the profits with the video-streaming platforms. Netflix, a major player globally had recently started producing its own content. Amazon Prime Video, a close competitor of Netflix, offered a wide array of services to its Indian users for an yearly subscription fee. Hotstar, the only Indian player in the list, opted a freemium model, differentiating the offerings for its free and premium (paid) users. SRK wondered whether it was feasible of developing Red Chillies’ own digital platform or whether to partner with these players, focussing more on content creation rather than digital distribution.