One of my favorite activities during my leisure time is to go see movies at the theater. I love movies for their visual, emotional, and artistic impact. The main sources of movies I have seen come from Hollywood, California. Hollywood has been the center of the movie world since the â€œGolden Age of Hollywoodâ€ from 1927 to the late 1950’s, which has persisted to this day. However, Hollywood is not only recognized for its glitz and glamour, it’s also recognized for the financial impact it has on the world economy. The Hollywood Film Industry churns out on average 520 movies a year, with growth of 1.8% per year. The domestic box office returns in 2008 reached $9.8 billion, at a growth rate of 1.7% from 2007. The international box office returns of 2008, which accounted for 65% of total revenue, reached an all time high of $28.1 billion, rising 5.2% from 2007. Hollywood is not only the heart of the American film industry; it is the center for home movie and television production as well. When you incorporate home movie and television production with the film industry, this Hollywood giant contributes close to $80 billion to the U.S. economy.
Recently, another player in the world film industry has stepped up to challenge Hollywood for a share of the world cinema market. This film industry, which is located in India, is known as Bollywood. Bollywood is known for its theatrical productions that include music, dancing, and singing. This movie hub releases close to 1000 movies per year, double that of Hollywood. However, Bollywood movies have been plagued by poor funding, stagnant story lines, and complacent producers and directors. Starting in 2006, a revolution has taken place to create better movies, which includes a shift in business ideology from a cash-flow to profit-loss. Directors and producers were solely worried about the money they could get from their next film, whether or not their current project flopped. Once the industry began looking at movies from a profit-loss perspective, the standard of movie making in Bollywood began to rise. With the Indian economy growing greatly, more and more Indian businesses are entering the movie market by funding higher priced films. These budget increases allow film makers to spend more time in pre-production, cast better actors and actresses, pay them accordingly, and to film higher quality movies.
With the increase in Bollywood’s quality over the last few years, Hollywood has taken notice of the new competition. Hollywood recognizes that Bollywood is a growing force, so much so that some movie houses are creating joint ventures in order to gain capital funding and to work on bigger and better project. One of the most notable collaborations to date has been the merging of DreamWorks, run by Steven Spielberg and Stacey Snider, with one of India’s largest entertainment conglomerates, the Reliance ADA Group. With this cooperation between Hollywood and Bollywood, how much growth can the two movie giants sustain? What will be the impact of these international mergers on the U.S. and Indian film industries? Will Bollywood take jobs (especially post-production) away from the Hollywood due to lower costs in India? These are all the questions to consider. For more information please refer to:
– Jason Silver