BUSINESS MODEL OF FILMS 2020- How Films make Money

The business model of films is not known by everyone. Therefore in this blog, I will tell you the money-making process of the films.

You will also know about the persons involved in buying and selling of the film.

Everyone knows that one of the biggest profit-making industries is the film industry. We often hear about the box office collections of the films that have released. But not everyone knows about the collections are made.

So In this blog You will find:

1. MARKETING OR PROMOTION OF FILMS
2. HOW DO FILMS MAKE MONEY
3. CONCLUSION
4. FAQs

MARKETING OR PROMOTION OF FILMS

• IMPORTANCE OF MARKETING AND PROMOTION
• EARLY BUSINESS MODEL OF FILMS
• EVOLVED BUSINESS MODEL OF FILMS
• EXPENDITURE
• RELEASE ON OTT PLATFORMS

IMPORTANCE OF MARKETING AND PROMOTION

In the earliest days of the film,  movies were the source of marketing.

People bought tickets just to see the pictures move on the screen. So it became clear that films were a large source of mass entertainment.

To that, a permanent infrastructure emerged- like movie studios and theatre chains. Those Studios started making more films to keep up with the demand.

 Because of the increased options audience also became the most sophisticated viewers. Therefore now they wanted movies that had stories and stars 

Due to the more competition, every film distributor Wanted the audience to see their film. And from here they started marketing the films

EARLY BUSINESS MODEL OF FILMS

 In the early days, the studios that produced in making the film noticed that people watched movies with the stars in it.

 As a result, they started marketing their movies through celebrities. Therefore Celebrities can be sent to talk shows, magazines spread where hundreds of journalists are served, and given precious moments with the celebrities.

On the other hand, nowadays celebrities also show up their game on social media to increase hipe for their movies. In order to know more about the Superstars of the films click here: Superstars of the Film Industry

But the cornerstone of the film marketing is poster or one-sheet. They might be organized around an image from the film and would have their lead star cast in them and Eventually these are transformed into billboards that are displayed outside the theatres.

Trailers and teasers were also at the early stage of film marketing. In the early days the trailers would come after the serials or short film.

 But from the 1980  studios were purchased by the big multinational corporations.In that, the marketing professionals were consulted before the products were fully developed.

EVOLVED BUSINESS MODEL

Studios like Marvel taken marketing to a whole new level. From announcing the release date and creating the promotional strategy before they have developed the script or hired the actors. Sponsorship and product placements also reached to a new level.

The internet Transformed marketing in many ways. Now it has become cheaper to deliver trailers on the internet or YouTube.

So now every television network for the advertisement of the film.We can aim ads by  researching the viewers browser history

EXPENDITURE

Before marketing your film you have to decide how much money you have to spend on the promotions. Generally, marketing costs an additional quarter to half of a films budget. Some of the high budget films are: INTERSTELLAR

The biggest chunk of a marketing budget is spent on something called Prints and Advertising Department. Marketing departments will often buy Print ad space in local newspapers, they will also make advertisements on the radio. 

Depending on how you have to release your film will decide the cost of your printing and advertisement will change.

 Theatrical release is generally costlier .The film itself has to be physically delivered to the theatres which used to cost more when that meant hauling around with heavy metal cans.

If you make a big enough marketing splash when your film opens in theatres, and at the time when it is released on some other platforms, people would remember hearing about it. 

Films released on the cable television lower marketing cost is the audience is already watching the channel.

So If you want to see more worth-watching films and know more about them by their reviews then here are some of them: Beauty and the Beast, Maleficent,

RELEASE ON OTT PLATFORMS

 Recently the films are released also on the page streaming services like Amazon Prime and Netflix they allow films that had a  theatrical Run but also let you stream original movies on your television, tablet, or wherever you want.

So these were some marketing strategies that the distributor opts before making a theatrical release.

HOW DO FILMS MAKE MONEY

• Producer earns money
• Distributor earns money from the Film
• Famous Production Companies

Here starts the main profit-earning Business Model Of Films. From Here you will learn how do movies do their business and make money.

All of us know that that film industry is a profit-making industry but no one knows how do they make a profit and about their business model. Let me tell you about the business model of the films and the profit-making process of the films. Before studying the profit we need to know the stages in the making of the film. So there are four  stages of film production, 

Namely.

1. Development
2.  Pre-production
3.  Production
4.  post-production

 In these  4 stages, the story of the film is decided on the cast and crew are decided. second stage, the actor and actress are decided.

When third-stage starts actual shooting of the film is done and in the 4th Stage the scenes shot are then edited.

To learn about these stages in detail click here: 4 STAGES OF FILMMAKING

 The expenses of these stages are borne by the producer of the film. Payment of actors, payment of cast and crew, payment for the props and etc.

Now the producer has spent his money. Now it’s his time to earn the money. let me tell you how does producer makes money.

This whole business model of films is based on the supply chain. This is divided into 2 cases.

HOW DOES PRODUCER EARNS MONEY ?

 The film is ready for its release. here comes the DISTRIBUTOR

 A distributor is a person who purchases the movie from the producer and sells it to the sub-distributors region wise. This is how the producers earn money through distributors

First case: The producer is also the distributor like Yash Raj Films, Dharma Productions, Eros Now and etc.

Second case: there are some individual producers who sell their movie to the distributor and from there earn the profit through the distributor.

If we talk about the second case, so there the film is already hit for the producer as he sold his movie by making the profit from the distributor. If ever the film doesn’t work then the distributor has to bear the whole loss.

Now the game from here is played by the distributor. a lot on the marketing and the promotion of the film. As they have an important role in making film hit or flop.

Now after the marketing and promotion is over here comes the total cost of the film. this film is ready for release.

HOW DOES THE DISTRIBUTOR MAKE MONEY ?

 First of all the distributors sells the satellite rights and music rights of the film.

Satellite rights mean when the movie is to be telecasted on the TV the channel has to take the rights from the distributor. It is the same for the music of the film and Distributors from these recovers a fair amount of money.

 After that, the distributor sells the film for the release to the sub-distributors the sub-distributors are divided region-wise in the whole country.

Now the sub-distributors give the film to the theatre Honours of the respective region. When the film is released money generated from selling the tickets is called gross income and after paying all the taxes the money left is called net income. That is divided between the theatre owners and the distributor.

This money is divided between the theatre owners and the distributors in a fixed ratio that is mentioned in the agreement when the film is sold to theatre owners.

 If enough movie tickets are not sold then both the theatre owners and the producers would be in a major loss.

FAMOUS FILM PRODUCTION COMPANIES

1. .Yash raj films
2. Dharma productions
3. Cape of good films
4. Ajay Devgan Films
5. SalmanKhan Films
6. Red Chilies Entertainment

CONCLUSION

So to sum up this was the business model of the films. Here and this blog I stated how do films make money and who all are involved in buying and selling of the film

FAQs