film financing

PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICSFILM FINANCING Chapter no 1 FILM FINANCING Page 1  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Introduction to film financing Film finance is an aspect of film production that occurs during the development stage prior to 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 revenues (generally 10 years for films and 20 years for television shows), beginning with theatrical release, and including DVD sales, and release to cable broadcast television networks both domestic and international and inflight airline licensing. About Film finance is a subset of project finance, meaning the film project's generated cash flows rather than external sources are used to repay investors. The main factors determining the commercial success of a film include public taste, artistic merit, competition from other films released at the same time, the quality of the script, the quality of the cast, the quality of the director and other parties, etc. Even if a film looks like it will be a commercial success "on paper", there is still no accurate method of determining the levels of revenue the film will generate. In the past, risk mitigation was based on pre-sales, box office projections and ownership of negative rights. Along with strong ancillary markets in DVD, CATV, and other electronic media (like streaming video on demand -SVOD), investors were shown that picture subsidies (tax incentives and credits), and pre-sales (discountable-contract finance) from foreign distributors, could help to mitigate potential losses. As production costs have risen, however, potential financiers have become increasingly insistent upon higher degrees of certainty as to whether they will actually have their investment repaid, and assurances regarding what return they will earn. Past film slate's poor performance records are showing up in public court documents. Property and casualty companies (P&C) like AIG had offered insurance against film slates and the bonds issued to fund them, but now fully refuse to cover film slates. This ended in many lawsuits, starting in early 1999 (with Steve Stabler's Destination Films $100M bond fund failure and subsequent lawsuit), and continue to this day with Aramid's lawsuit on Relativity's Beverly-1-Sony film slate and the Melrose-2-Paramount slate. Citigroup attempted to wrap the Beverly-1-Sony slate with a property and casualty insurance wrapper (from the formerly bankrupt Ambac Assurance, Corp.). After these "uninsured" slate financing arrangements (SFA) failed to return even the original principal to investors, the market has sought solutions. Traditionally, banks like JP Morgan have an entertainment division that uses proprietary risk mitigation regression analysis to see if future film revenues can meet an exceedance probability (where in the ultimate revenues allow the loan to break even), but this is calculated guesswork, and has caused all of the major national banks to lose millions in bad loans. An alternative to such loss FILM FINANCING Page 2  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS protection was developed by Geneva Media Holdings, LLC (originally as risk mitigation for affluent individuals and "direct investors" under US tax incentive IRC 181). Fully insured media funds are now being carefully reviewed by risk analysts at major hedge funds, banks and institutional pension plans specializing in investor risk mitigation. Many outside of Hollywood fail to realize the longevity of film and television after-market income streams. Many commercial films and network television shows will make money for decades. For the investor who pays for part of the negative costs, the time value of money is important. For many movie investors the required rate of return for this "risky" investment may be 25% or more. This means that while there may be TV revenues for an additional 10 years after the movie is released, the PV (present value) of those revenues is diminished by the required rate of return and the time it takes for these revenues to accrue. Ancillary revenues (VOD, DVD, Blu-ray, PPV, CATV, etc.), tend to accrue to the studio that purchased these residuals as part of their overall distribution deal. For many movie investors in the past, the theatrical box office was the primary place to gain a PV return on their investment. VaultML has developed technologies usually seen in high frequency trading to predict box office success and investor risk using artificial intelligence. They claim to analyze over 300,000 elements from screenplay to form a basis for prediction.Based on their published future predictions for 2015 they out yielded the market on a return on investment basis. Ryan Kavanaugh of the recently bankrupted Relativity Media offered participation in profits to actors, rather than up-front fees, to lower production costs and keep profits protected. Kavanaugh has attempted to use data from major studios like Sony and NBC/Universal to build a complex Monte Carlo system to determine movie failure rates prior to production. His projects and business models have failed miserably, causing a half-a-billion dollars in losses. The box office results of his movies have been mixed, as there is no set ratios, blends, mixtures, method or secret crystal ball that can project movie revenues, investor risk or rejection parameters. Slated is the first dedicated online film finance marketplace for professional equity investing. Combined with Slated's team, script and financial analysis, investors can have ownership in films with real profit potential. Epagogix has developed a system using neural networks to assess factors that contribute to box office success. They assess a wide variety of movies of different box office returns. Another film finance analyst, Steve Jasmine, claims to have developed a system for predicting a film's box office success. This system claims to quantify 800 creative elements of billion dollar grossing movies to determine what audiences are most interested. Worldwide Motion Picture Group offers a service termed "script evaluation" where a team of FILM FINANCING Page 3  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS analysts compare draft scripts to those of previously released movies in an effort to estimate the box office potential of the proposed script. They also conduct surveys and use results of previous focus groups to assist this analysis. A final consideration is securing title. Since the collateral for film financing arrangements can be based on the ownership of intellectual property rights, film finance transactions generally commence with a title analysis. Chapter No 2 Methods FILM FINANCING Page 4  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS There are five main methods of financing the production of a film: 1. government grants; 2. tax incentives and shelters; 3. private equity and hedge funds 4. debt finance; and 5. equity finance. Government grants A number of governments run programs to subsidise the cost of producing films. For instance, until it was abolished in March 2011, in the United Kingdom the UK Film Council provided National Lottery funding to producers, as long as certain conditions were meant. Many of the Council's functions have now been taken over by the British Film Institute. States such as Louisiana, Massachusetts, New York, Connecticut, Oklahoma, Pennsylvania, North Carolina, Michigan, and New Mexico, will provide a subsidy or tax credit provided all or part of a film is filmed in that state. Governments are willing to provide these subsidies as they hope it will attract creative individuals to their territory and stimulate employment. Also, a film shot in a particular location can have the benefit of advertising that location to an international audience Government subsidies are often pure grants, where the government expects no financial return. Tax incentives Some U.S. states and Canadian provinces have between 15% and 70% tax or cash incentives for labor, production costs or services on bona fide film/television/PCgame expenditures. Each state and province differs. These so- called "soft-money" incentives are generally not realized until a theatrical or interactive production is completed, all payments are made to workers, financial institutions, and rental or prop companies within the state or province offering the incentives. Many other limitations may apply (i.e., actors, cast and crew may have to take up residence in the state or province). Often, a certain amount of physical shooting (principal photography) must be completed within the state borders, and/or the use of the state's institutions. This would include rental facilities, banks, insurance companies, sound stages or studios, agents, agencies, brokers, catering companies, hotel/motels, etc. Each may also have to be physically domiciled within the state or province's borders. Finally, additional incentives (another 5% to 25% on top of the already generous soft money), may FILM FINANCING Page 5  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS be offered for off-season, low-income area, or family entertainment projects shot in places of economic impoverishment or during poor weather condition months in a hurricane-prone state or Arctic province. A number of countries have introduced legislation that has the effect of generating enhanced tax deductions for producers or owners of films. Incentives are created which effectively sell the enhanced tax deductions to wealthy individuals with large tax liabilities (e.g., IRS code sections 181 and 199). The individual will often become the legal owner of the film or certain rights relating to the film. In 2007 the United Kingdom government introduced the Producer's Tax Credit which results in a direct cash subsidy from the treasury to the film producer. German tax shelters A relatively new tactic for raising finance is through German tax shelters. The tax law of Germany allows investors to take an instant tax deduction even on non-German productions and even if the film has not yet gone into production. The film producers can sell the copyright to one of these tax shelters for the cost of the film's budget, then have them lease it back for a price around 90% of the original cost.On a $100 million film, a producer could make $10 million, minus fees to lawyers and middlemen. This tactic favors big-budget films as the profit on more modestly budgeted films would be consumed by the legal and administrative costs. That being said, the above schemes are all but gone and are being replaced by more traditional production incentives The main production incentive is the German Federal Film Fund (de) (DFFF). The DFFF is a grant given by the German Federal Commissioner for Culture and the Media. To receive the grant a producer has to fulfill different requirements including a cultural eligibility test. The film finance calculator on germanfilmfinance. checks online if the project passes the test as well as it shows the individually calculated estimated grant. British tax shelters Now, the same copyright can be sold again to a British company and a further $10 million could be raised, but UK law insists that part of the film is shot in Britain and that the production employs a fair proportion of British actors and crew. This explains why many American films like to shoot at Britain's major film studios like Pinewood and Shepperton and why a film such as Basic Instinct 2 relocated its action from New York toLondon. These are commonly referred to Sale & Leaseback deals; they were discontinued in March 2007, though those initiated prior to Dec. 31, 2006 were grandfathered in. Entertainment Tax FILM FINANCING Page 6  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Maharashtra - 45% No tax for Marathi Films. Besides tax exemption subsidy of Rs.15 lakhs is given to Marathi Films. In Maharashtra the subsidy given to the producers are as under: 1. Rs.15 lakhs at the time of starting the next production. 2. Rs.20 lakhs if the film is being produced in 35 mm Dolby/Digital. This subsidy is given to 5 producers in a year on the basis of the script selected by the government. 3. Additional Rs.15 lakhs if the film gets a National Award. Orissa Admission rate upto Rs.2/- 60% Admission rate above Rs.2/- 70% Panjab – NIL Rajasthan - 35% Tamil Nadu Tamil Films No Tax Others 15% Uttaranchal - 40% FILM FINANCING Page 7  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Uttar Pradesh - 60% (likely to be 30% soon) West Bengal Bengali 30% Others 10% Andhra Pradesh 21% For films produced 08% Low budget Films 16% Big budget films outside the State produced in State produced in State Asaam Up to Rs.2000/- 80% Above Rs. 2000/- 100% Chapter no 3 FILM FINANCING Page 8  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Types of Film Financing Private equity financing Generally tax-advantaged theatrical film and television investment for affluent individuals comes with little risk. Most often, the cost of production is recouped by a combination of federal and state tax incentives, thereby eliminating most of the risk. Capital is still required as a direct investment (partnerships can be used), but must also be "at risk", which allows § 181 IRC write-offs. For example, if a private equity source is found (individuals with capital or a private wealth management firm representing individuals personal funds), the investor pays for the film or TV production, and receives back an equal amount of capital in tax-incentives, pre-sales and state tax credits, thereby making the investment and recoup a wash. This is a highly specialized tax play, and is often looked upon as risky by those who do not understand the risk mitigation offered through state tax and federal tax in centives like § 181 IRC. WHY DON'T PRIVATE EQUITY FIRMS ACTIVELY INVEST IN FILMS, DESPITE THEIR POTENTIAL TO CREATE HUGE RETURNS IN LESS TIME? The short answer: films don't produce consistent, predictable cash flows to pay off the debt load created by traditional PE strategies. At best, they are lumpy windfalls. At worst, they are complete disasters that fail to break even. In either scenario, you are not getting steady-eddy cash generation to pay off the interest until premiere weekend. As others have mentioned, a more practical strategy that plays to the financial engineering strengths of PE shops would be to buy the studio or buy the distribution/syndication rights to portfolios of films, but even then, the valuation would be extremely difficult as is most things artistic. Relativity Media is an example of a financial player that has attempted to play the movie space. They started out as an offshoot of a hedge fund, providing financing to studios who struggled to find backers. But to my knowledge, even they have not enjoyed tremendous success and struggled in the early years. As evidenced by the sheer number of films they finance these days, they have clearly moved to a much more diversified portfolio strategy versus placing their chips on a select few films and taking huge stakes in them. Hedge-fund financing FILM FINANCING Page 9  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS WHAT IS A HEDGE FUND? A hedge fund is an alternative investment vehicle available only to sophisticated investors, such as institutions and individuals with significant assets. Like mutual funds, hedge funds are pools of underlying securities. Also like mutual funds, they can invest in many types of securities—but there are a number of differences between these two investment vehicles. First, hedge funds are not currently regulated by the U.S. Securities and Exchange Commission (SEC), a financial industry oversight entity, as mutual funds are. However, it appears that regulation for hedge funds may be coming soon. Second, as a result of being relatively unregulated, hedge funds can invest in a wider range of securities than mutual funds can. While many hedge funds do invest in traditional securities, such as stocks, bonds, commodities and real estate, they are best known for using more sophisticated (and risky) investments and techniques. Hedge funds typically use long-short strategies, which invest in some balance of long positions (which means buying stocks) and short positions (which means selling stocks with borrowed money, then buying them back later when their price has, ideally, fallen). Additionally, many hedge funds invest in “derivatives,” which are contracts to buy or sell another security at a specified price. You may have heard of futures and options; these are considered derivatives. Many hedge funds also use an investment technique called leverage, which is essentially investing with borrowed money—a strategy that could significantly increase return potential, but also creates greater risk of loss. In fact, the name “hedge fund” is derived from the fact that hedge funds often seek to increase gains, and offset losses, by hedging their investments using a variety of sophisticated methods, including leverage. Third, hedge funds are typically not as liquid as mutual funds, meaning it is more difficult to sell your shares. Mutual funds have a per-share price (called a net asset value) that is calculated each day, so you could sell your shares at any time. Most hedge funds, in contrast, seek to generate returns over a specific period of time called a “lockup period,” during which investors cannot sell their shares. (Private equity funds, which are similar to hedge funds, are even more illiquid; they tend to invest in startup companies, so investors can be locked in for years.) FILM FINANCING Page 10  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Finally, hedge fund managers are typically compensated differently from mutual fund managers. Mutual fund managers are paid fees regardless of their funds’ performance. Hedge fund managers, in contrast, receive a percentage of the returns they earn for investors, in addition to earning a “management fee”, typically in the range of 1% to 4% of the net asset value of the fund. That is appealing to investors who are frustrated when they have to pay fees to a poorly performing mutual fund manager. On the down side, this compensation structure could lead hedge fund managers to invest aggressively to achieve higher returns—increasing investor risk. As a result of these factors, hedge funds are typically open only to a limited range of investors. Specifically, U.S. laws require that hedge fund investors be “accredited,” which means they must earn a minimum annual income, have a net worth of more than $1 million, and possess significant investment knowledge. The popularity of these alternative investment vehicles—which were first created in 1949—has waxed and waned over the years. Hedge funds proliferated during the market boom earlier this decade, but in the wake of the 2007 and 2008 credit crisis, many closed. One, Bernard L. Madoff Investment Securities, turned out to be a massive fraud. As a result, they are subject to increasing due diligence. Some of the more popular hedge fund investment strategies are Activist, Convertible Arbitrage, Emerging Markets, Equity Long Short, Fixed Income, Fund of Funds, Options Strategy, Statistical Arbitrage, and Macro. Despite these recent challenges, hedge funds continue to offer investors a solid alternative to traditional investment funds—an alternative that brings the possibility of higher returns that are uncorrelated to the stock and bond markets. As a result, hedge funds are likely here to stay. Get comprehensive and up-to-date information on 6100 + Hedge Funds, Funds of Funds, and CTAs in the Barclay Global Hedge Fund Database. Also known as slate financing deals. Private investors One of the hardest types of film financing pieces to obtain is private investor funds. These are funds invested by an individual who is looking to possibly add FILM FINANCING Page 11  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS more risk to his investment portfolio, or a high-net-worth individual with a keen interest in films. Debt finance Pre-sales Pre-sales is, based on the script and cast, selling the right to distribute a film in different territories before the film is completed. When the deal is made, the distributor will insist the producers deliver on certain elements of content and cast; if a material alteration is made, financing may collapse.In order to gain the “marquee names” essential for drawing in an international audience, distributors and sale agents will often make casting suggestions. Pre-sales contracts with big name actors or directors will often (at the insistence of the buyer) have an "essential element" clause that (as per the example above) allows the buyer to get out of the contract if the star or director falls out of the picture and a marquee equivalent cannot be procured. The reliance on pre-sales explains the film industry's dependence on movie stars, directors and/or certain film genres (such as Horror). Typically, upon signing a pre-sale contract, the buyer will pay a 20% deposit to the film's collection account (or bank), with the balance (80%) due upon the film's delivery to the foreign sales agent (along with all the necessary deliverable requirements.) Usually a producer pre-sells foreign territories (in whole or part) and/or North American windows/rights (i.e. theatrical, home video/DVD, pay TV, free TV, etc.) so that the producer can use the value of those contracts as collateral for the production loan that a bank (senior lender) is providing to finance the production. Television pre-sales Although it is more usual for a producer to sell the TV rights of this film after it has been made, it is sometimes possible to sell the rights in advance and use the money to pay for the production. In some cases the television station will be a subsidiary of the movie studio's parent company. Negative pickup deal A negative pickup deal is a contract entered into by an independent producer and a movie studio wherein the studio agrees to purchase the movie from the producer at a given date and for a fixed sum. Until then, the financing is up to the producer, who must pay any additional costs if the film goes over-budget. Generally, a producer will have a bank/lender lend against the value of the negative pickup contract as a way to shore up their financing package of the FILM FINANCING Page 12  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS film. This is commonly referred to as "factoring paper". Most major North American studio and network contracts (incl. basic cable) are collateralized/factored by the bank at 100% of the contract value, and the lender just takes a basic origination/setup fee. Splitting the roles of studios and networks necessitated a means for financing television series appropriate to the varied risks and rewards inherent in the separation. A practice known as "deficit financing" consequently developed – an arrangement in which the network pays the studio that make a show a license fee in exchange for the right to air the show, but the studio retains ownership. The license fee does not fully cover the costs of production – hence the "deficit" of deficit financing. Deficit financing developed after the varied risks and rewards were determined and carried out through film financing. Deficit financing occurs when the license fee for a show doesn’t fully cover production fees. A studio has ownership of the production, but as license fees are handed out in exchange to air a show, the phrase deficit financing comes into play as costs were not being met and paid. From the late 1960s through the mid-1990s special regulations from financial regulation's and syndication's rules created relations between television networks and independent production companies. These rules stated that ownership of the rights to the programs reverted to the producer/production company after a specified number of network runs (syndication). Profits from any other sales, including syndication, generally benefited the production community. Because of this, production companies produced original shows at a loss, hoping that they would eventually be run by syndication and make their money back. Gap/supergap financing In motion pictures, gap/supergap financing is a form of mezzanine debt financing where the producer wishes to complete their film finance package by procuring a loan that is secured against the film's unsold territories and rights. Most gap financiers will only lend against the value of unsold foreign (non-North American) rights, as domestic (North American: USA & Canadian) rights are seen as a "performance" risk, as opposed to more quantifiable risk that is the foreign market. In short, this means that the foreign value of a film can be ascertained by a foreign sales company/agent by evaluating the blended value of the quality of the script, its genre, cast, director, producer, as well as whether it has theatrical distribution in the US from a major film studio; all of this is taken into consideration and applied against the historical and current market tastes, trends, and needs of each foreign territory of country. This is still an unpredictable practice. Domestic distribution is also unpredictable and far from ever a sure thing (e.g. just because a film has a big FILM FINANCING Page 13  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS budget and a commercial genre and cast, it could still be unwatchable and thus never receive a theatrical or television release in the US, thus being relegated to being a big budget, direct-to-video film.) Any certainty in the entertainment business, lending against foreign value estimates is preferable to betting on strictly a domestic success (comedies and urban films being two notable exceptions: they are referred to as "domestic pieces" or "domestic plays".) True to its mezzanine nature, in the pecking order of recoupment of investment, generally, gap (or supergap) loans are subordinate to (recoup after) the senior/bank production loan, but in turn, the gap/supergap loan will be senior to (recoup before) equity financiers. A gap loan becomes a supergap loan when it extends beyond 10-15% of the production loan required to shoot the film (or in other words, when the percentage of the gap required to complete the film's financing package becomes greater than a bank is willing to bear, which is traditionally 10-15%, but can sometime be a flat dollar threshold like US$1,000,000.) Gap/supergap lending is a very risky form of capital investment and accordingly the fees and interest charged reflect that level of risk. But at the same time it is not unlike buying a house: nobody pays 100% of the purchase price with cash; they pay about 20% in cash and borrow the rest. Supergap financing works by the same principle: put down 20-30% cash/equity and borrow the rest. Over the years, because of the high risk nature, many supergap companies have come and gone, but a few established players have survived the ups and downs of the markets with Relativity Media, Screen Capital International, Grosvenor Park, Helios Productions, Endgame Entertainment, Blue Rider, Newmarket Capital, Aramid Entertainment, MDG Entertainment Holdings, Limelight, RJG Entertainment and 120 dB all active in the current debt financing space. The Internet portal germanfilmfinance.com] aims to support national and international film makers in the acquisition of production financing. By combining national and regional financing components including a Supergap loan, it is possible to finance up to 50% - 65% of the entire film project budget. Product placement financing Income from product placement can be used to supplement the budget of a film. The Bond franchise is notable for its lucrative product placements deals, bringing in millions of dollars. In the film Minority Report, Lexus, Bulgari and American Express reportedly paid a combined $20 million for product placement, a record-high amount. Product placement may also take the form of in-kind contributions to the film, such as free cars or computers (as props or FILM FINANCING Page 14  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS for the production's use). While no money changes hands, the films budget will be lowered by the amount that would have otherwise been spent on such items. A feature film that has expectations of reaching millions of viewers attracts marketers. In many cases no payment is made for product exposure and no promise of marketing support is made when consumer brands appear in movies. Film productions need props for scenes, so each movie’s property master, who is responsible for gathering props film, contacts product placement middlemen agencies or product companies directly. In addition to items for on-screen use, the product/service supplier might provide a production with large quantities of complementary products or services. Tapping product placement channels can be particularly valuable for movies when a vintage product is required—such as a sign or bottle—that is not readily available. One of the earliest examples is The Garage, a Buster Keaton/"Fatty" Arbuckle comedy which featured the logo of Red Crown gasoline in several scenes (although there is no definitive proof that this product placement was paid for). Fritz Lang's Dr. Mabuse the Gambler (1922) contained a prominent title card in the opening credits reading "The gowns of the female stars were designed by Vally Reinecke and made in the fashion studios of Flatow-Schädler und Mossner." Among notable silent films to feature product placement was Wings (1927), the first to win the Academy Award for Best Picture. It contained a plug for Hershey's chocolate. Fritz Lang's film M (released in 1931) includes features a banner display for Wrigley's PK Chewing Gum, for approximately 20–30 seconds. Another early example occurs in Horse Feathers (1932), wherein Thelma Todd's character falls out of a canoe and into a river. She calls for a "life saver" and Groucho Marx tosses her a Life Savers candy. It's a Wonderful Life (1946) depicts a young boy with aspirations to be an explorer, displaying a prominent copy of National Geographic. In Love Happy (1949), Harpo cavorts on a rooftop among various billboards and at one point escapes from the villains on the old Mobil logo, the "Flying Red Horse". Harrison's Reports severely criticized this scene in its film review and in a front-page editorial. In Gun FILM FINANCING Page 15  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Crazy (1949), the climactic crime is the payroll robbery of the Armour meat- packing plant, where a Bulova clock is prominently displayed. L ATER FILMS The Cannonball Run and Smokey and the Bandit film series featured conspicuous placements. The film E.T. is often cited for its multiple, obvious placements. Cheerios and Coca-Cola had product placement in the Andrew Lloyd Webber musical Evita and in Superman: The Movie and the sequel Superman II. Clark Kent eats Cheerios for breakfast in Smallville. In Superman II's climax, Superman crashes into a giant Coca-Cola advertisement and saves a bus full of people bearing an ad for Evita, before he smashes into a Marlboro delivery truck. Perhaps the ultimate example of product placement comes in the film Cast Away in which the Tom Hanks lead character is a FedEx employee. References to the delivery company FedEx are in nearly every scene in the film, with the FedEx logo and name preposterously over-emphasized. E ARLY TELEVISION In other early media, e.g., radio in the 1930s and 1940s and television in the 1950s, programs were often underwritten by companies. Soap operas were so- named because they were initially underwritten by consumer packaged goods companies such as Procter & Gamble or Unilever. When television began to displace radio, DuMont's Cavalcade of Stars television show was, in its era, notable for not relying on a sole sponsor. Sponsorship continues with programs being sponsored by major vendors such as Hallmark Cards. The conspicuous display of Studebaker motor vehicles in the television series Mr. Ed (1961–1966), which was sponsored by the Studebaker Corporation from 1961 to 1963, as well as the display of Ford vehicles on the series Hazel (1961–1966), which was sponsored by the Ford Motor Company from 1961 to 1965, are notable examples of television product placement. FILM FINANCING Page 16  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Chapter no 4 Crowdfunding With a rising popularity of online crowdfunding more and more films are getting financed directly by their consumers this way. The crowdfunding platforms Kickstarter and IndieGoGo have their own categories dedicated to films. Crowdfunding films gives the consumer a voice in what films are being produced, allow for riskier, more socially relevant, more innovative, less profit- oriented independent films with smaller and marginal target audiences that can't be found in mainstream cinema and lower the entry-barrier to new filmmakers. Crowdfunded films include Iron Sky, Kung Fury, Veronica Mars, Code 8, Star Trek: Renegades, Manthanand Anomalisa. Crowdfunding has a long history with more than one root. Books have been crowdfunded for centuries: Authors and publishers would advertise book projects in praenumeration or subscription schemes. The book would be written and published if enough subscribers signaled their readiness to buy the book once it was out. The subscription business model is not exactly crowdfunding, since the actual flow of money only begins with the arrival of the product. The list of subscribers has, though, the power to create the necessary confidence among investors that is needed to risk the publication. FILM FINANCING Page 17  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS War bonds are theoretically a form of crowdfunding military conflicts. London's mercantile community saved the Bank of England in the 1730s when customers demanded their pounds to be converted into gold - they supported the currency until confidence in the pound was restored, thus crowdfunded their own money. A clearer case of modern crowdfunding is Auguste Comte's scheme to issue notes for the public support of his further work as a philosopher. The "Premiere Circulaire Annuelle adressée par l’auteur du Systeme de Philosophie Positive" was published on 14 March 1850, and several of these notes, blank and with sums have survived. The cooperative movement of the 19th and 20th centuries is a broader precursor. It generated collective groups, such as community or interest-based groups, pooling subscribed funds to develop new concepts, products, and means of distribution and production, particularly in rural areas of Western Europe and North America. In 1885, when government sources failed to provide funding to build a monumental base for the Statue of Liberty, a newspaper-led campaign attracted small donations from 160,000 donors. Crowdfunding on the internet first gained popular and mainstream use in the arts and music communities. The first instance of crowdfunding was in 1997, when fans underwrote an entire U.S. tour for the British rock group Marillion, raising US$60,000 in donations by means of a fan-based Internet campaign. In the film industry, independent writer/director Mark Tapio Kinesdesigned a website in 1997 for his then-unfinished first feature film Foreign Correspondents. By early 1999, he had raised more than US$125,000 on the Internet from at least 25 fans, providing him with the funds to complete his film. [12] In 2002, the "Free Blender" campaign was an early software crowdfunding precursor. The campaign aimed for open-sourcing the Blender 3D computer graphics software by collecting $100,000 from the community while offering additional benefits for donating members.[15] Crowdfunding gained traction after the launch of ArtistShare, in 2003. Following ArtistShare, more crowdfunding sites started to appear on the web such as IndieGoGo (2008), Kickstarter (2009), and Microventures (2010). However, Sellaband, started in 2006 as a music- focused platform, initially controlled the crowdfunding market. This can be contributed to creators and funders, who perceive the platform to be more valuable with more members. Later, Kickstarter gained popularity for its wide- ranging focus. Both platforms prohibit equity funding. However, Sellaband offered revenue sharing, a type of equity crowdfunding, for three years after the FILM FINANCING Page 18  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS platform’s founding. It was later controlled by a German company and heightened security restrictions. The phenomenon of crowdfunding is older than the term "crowdfunding". According to wordspy.com, the earliest recorded use of the word.The conspicuous display of Studebaker motor vehicles in the television series Mr. Ed (1961–1966), which was sponsored by the Studebaker Corporation from 1961 to 1963, as well as the display of Ford vehicles on the series Hazel (1961–1966), which was sponsored by the Ford Motor Company from 1961 to 1965, are notable examples of television product placement With a rising popularity of online crowdfunding more and more films are getting financed directly by their consumers this way. The crowdfunding platforms Kickstarter and IndieGoGo have their own categories dedicated to films. Crowdfunding films gives the consumer a voice in what films are being produced, allow for riskier, more socially relevant, more innovative, less profit- oriented independent films with smaller and marginal target audiences that can't be found in mainstream cinema and lower the entry-barrier to new filmmakers. Crowdfunded films include Iron Sky, Kung Fury, Veronica Mars, Code 8, Star Trek: Renegades, Manthanand Anomalisa. Crowdfunding has a long history with more than one root. Books have been crowdfunded for centuries: Authors and publishers would advertise book projects in praenumeration or subscription schemes. The book would be written and published if enough subscribers signaled their readiness to buy the book once it was out. The subscription business model is not exactly crowdfunding, since the actual flow of money only begins with the arrival of the product. The list of subscribers has, though, the power to create the necessary confidence among investors that is needed to risk the publication. War bonds are theoretically a form of crowdfunding military conflicts. London's mercantile community saved the Bank of England in the 1730s when customers demanded their pounds to be converted into gold - they supported the currency until confidence in the pound was restored, thus crowdfunded their own money. A clearer case of modern crowdfunding is Auguste Comte's scheme to issue notes for the public support of his further work as a philosopher. The "Premiere Circulaire Annuelle adressée par l’auteur du Systeme de Philosophie Positive" was published on 14 March 1850, and several of these notes, blank and with sums have survived. The cooperative movement of the 19th and 20th centuries is a broader precursor. It generated collective groups, such as community or interest-based groups, pooling subscribed funds to develop new concepts, products, and means of distribution and production, particularly in rural areas of FILM FINANCING Page 19  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Western Europe and North America. In 1885, when government sources failed to provide funding to build a monumental base for the Statue of Liberty, a newspaper-led campaign attracted small donations from 160,000 donors. Crowdfunding on the internet first gained popular and mainstream use in the arts and music communities. The first instance of crowdfunding was in 1997, when fans underwrote an entire U.S. tour for the British rock group Marillion, raising US$60,000 in donations by means of a fan-based Internet campaign. In the film industry, independent writer/director Mark Tapio Kinesdesigned a website in 1997 for his then-unfinished first feature film Foreign Correspondents. By early 1999, he had raised more than US$125,000 on the Internet from at least 25 fans, providing him with the funds to complete his film. [12] In 2002, the "Free Blender" campaign was an early software crowdfunding precursor. The campaign aimed for open-sourcing the Blender 3D computer graphics software by collecting $100,000 from the community while offering additional benefits for donating members. Crowdfunding gained traction after the launch of ArtistShare, in 2003. Following ArtistShare, more crowdfunding sites started to appear on the web such as IndieGoGo (2008), Kickstarter (2009), and Microventures (2010). However, Sellaband, started in 2006 as a music- focused platform, initially controlled the crowdfunding market. This can be contributed to creators and funders, who perceive the platform to be more valuable with more members. Later, Kickstarter gained popularity for its wide- ranging focus. Both platforms prohibit equity funding.[8] However, Sellaband offered revenue sharing, a type of equity crowdfunding, for three years after the platform’s founding. It was later controlled by a German company and heightened security restrictions. CHAPTER NO 5 TYPES OF CROWDFUNDING The Crowdfunding Centre's May 2014 report identified two primary types of crowdfunding: 1. Rewards crowdfunding: entrepreneurs presell a product or service to launch a business concept without incurring debt or sacrificing equity/shares. FILM FINANCING Page 20  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS 2. Equity crowdfunding: the backer receives shares of a company, usually in its early stages, in exchange for the money pledged. REWARD-BASED Reward-based crowdfunding has been used for a wide range of purposes, including motion picture promotion, free software development, inventions development, scientific research, and civic projects. Many characteristics of rewards-based crowdfunding, also called non-equity crowdfunding, have been identified by research studies. In rewards-based crowdfunding, funding does not rely on location. The distance between creators and investors on Sellaband was about 3,000 miles when the platform introduced royalty sharing. The funding for these projects is distributed unevenly, with a few projects accounting for the majority of overall funding. Additionally, funding increases as a project nears its goal, encouraging what is called "herding behavior". Research also shows that friends and family account for a large, or even majority, portion of early fundraising. This capital may encourage subsequent funders to invest in the project. While funding does not depend on location, observation shows that funding is largely tied to the locations of traditional financing options. In reward-based crowdfunding, funders are often too hopeful about project returns and must revise expectations when returns are not met. EQUITY Equity crowdfunding is the collective effort of individuals to support efforts initiated by other people or organizations through the provision of finance in the form of equity. In the United States, legislation that is mentioned in the 2012 JOBS Act will allow for a wider pool of small investors with fewer restrictions following the implementation of the act. Unlike nonequity crowdfunding, equity crowdfunding contains heightened "information asymmetries". The creator must not only produce the product for which they are raising capital, but also create equity through the construction of a company. Syndicates, which involve many investors following the strategy of a single lead investor, can be effective in reducing information asymmetry and in avoiding the outcome of market failure associated with equity crowdfunding. FILM FINANCING Page 21  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS SOFTWARE VALUE TOKEN Another kind of crowdfunding is to raise funds for a project where a digital or software-based value token is offered as a reward to funders. Value tokens are endogenously created by particular open decentralized networks that and are used to incentivize client computers of the network to expend scarce computer resources on maintaining the protocol network. These value tokens may or may not exist at the time of the crowdsale, and may require substantial development effort and eventual software release before the token is live and establishes a market value. Although funds may be raised simply for the value token itself, funds raised on blockchain-based crowdfunding can also represent equity, bonds, or even "market-maker seats of governance" for the entity being funded Examples of such crowdsales are Augur decentralized, distributed prediction market software which raised US$4 million from more than 3500 participants; Ethereum blockchain; Digix/DigixDAO;[32] and "The DAO." DEBT-BASED Debt-based crowdfunding (also known as "peer to peer", "P2P", "marketplace lending", or "crowdlending") arose with the founding of Zopa in the UK in 2005 and in the US in 2006, with the launches of Lending Club and Prosper.com. Borrowers apply online, generally for free, and their application is reviewed and verified by an automated system, which also determines the borrower's credit risk and interest rate. Investors buy securities in a fund which makes the loans to individual borrowers or bundles of borrowers. Investors make money from interest on the unsecured loans; the system operators make money by taking a percentage of the loan and a loan servicing fee. In 2009, institutional investors entered the P2P lending arena; for example in 2013, Google invested $125 million in Lending Club. In 2014 in the US, P2P lending totalled about $5 billion. In 2014 in the UK, P2P platforms lent businesses £749 million, a growth of 250% from 2012 to 2014, and lent retail customers £547 million, a growth of 108% from 2012 to 2014. In both countries in 2014, about 75% of all the money transferred through crowdfunding went through P2P platforms. Lending Club went public in December 2014 at a valuation around $9 billion. Debt crowdfunding in the U.S. has further evolved with the May 16, 2016 enactment of Title III of the JOBS Act, which allows FILM FINANCING Page 22  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS unaccredited investors to invest directly in private businesses through regulated Funding Portals or Broker-Dealers. LITIGATION Litigation crowdfunding allows plaintiffs or defendants to reach out to hundreds of their peers simultaneously in a semiprivate and confidential manner to obtain funding, either seeking donations or providing a reward in return for funding. It also allows investors to purchase a stake in a claim they have funded, which may allow them to get back more than their investment if the case succeeds (the reward is based on the compensation received by the litigant at the end of his or her case, known as a contingent fee in the United States, a success fee in the United Kingdom, or a pactum de quota litis in many civil law systems). DONATION-BASED Charity donation-based crowdfunding is the collective effort of individuals to help charitable causes. A form of charity crowdfunding is civic crowdfunding, in which funds are raised to enhance public life and space. ROLE The inputs of the individuals in the crowd trigger the crowdfunding process and influence the ultimate value of the offerings or outcomes of the process. Each individual acts as an agent of the offering, selecting and promoting the projects in which they believe. They sometimes play a donor role oriented towards providing help on social projects. In some cases, they become shareholders and contribute to the development and growth of the offering. Individuals disseminate information about projects they support in their online communities, generating further support (promoters). Motivation for consumer participation stems from the feeling of being at least partly responsible for the success of others’ initiatives (desire for patronage), striving to be a part of a communal social initiative (desire for social participation), and seeking a payoff from monetary contributions (desire for investment). Additionally, individuals participate in crowdfunding to see new and innovative products before the public. Early access often allows funders to participate more directly in the development of the product. Crowdfunding is also particularly attractive to FILM FINANCING Page 23  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS funders who are family and friends of a creator. It helps to mediate the terms of their financial agreement and manage each group’s expectations for the project. An individual who takes part in crowdfunding initiatives tends to reveal several distinct traits: innovative orientation, which stimulates the desire to try new modes of interacting with firms and other consumers; social identification with the content, cause or project selected for funding, which sparks the desire to be a part of the initiative; (monetary) exploitation, which motivates the individual to participate by expecting a payoff. Crowdfunding platforms are motivated to generate income by drawing worthwhile projects and generous funders. These sites also seek widespread public attention for their projects and platform. Crowdfunding websites helped companies and individuals worldwide raise US$89 million from members of the public in 2010, $1.47 billion in 2011, and $2.66 billion in 2012 — $1.6 billion of the 2012 amount was raised in North America. In 2012, more than one million individual campaigns were established globally and the industry was projected to grow to US$5.1 billion in 2013. and to reach US$1 trillion in 2025.A May 2014 report, released by the United Kingdom-based The Crowdfunding Centre and titled "The State of the Crowdfunding Nation", presented data showing that during March 2014, more than US$60,000 were raised on an hourly basis via global crowdfunding initiatives. Also during this period, 442 crowdfunding campaigns were launched globally on a daily basis. PLATFORMS As of 2012, over 450 crowdfunding platforms had been established. Project creators need to exercise their own due diligence to understand which platform is the best to use depending on the type of project that they want to launch. Fundamental differences exist in the services provided by many crowdfunding platforms. For instance, CrowdCube and Seedrs are Internet platforms which enable small companies to issue shares over the Internet and receive small investments from registered users in return. While CrowdCube is meant for users to invest small amounts and acquire shares directly in start-up companies, Seedrs pools the funds to invest in new businesses, as a nominated agent. FILM FINANCING Page 24  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Curated crowdfunding platforms serve as "network orchestrators" by curating the offerings that are allowed on the platform. They create the necessary organizational systems and conditions for resource integration among other players to take place. Relational mediators act as an intermediary between supply and demand. They replace traditional intermediaries (such as traditional record companies, venture capitalists). These platforms link new artists, designers, project initiators with committed supporters who believe in the persons behind the projects strongly enough to provide monetary support. Growth engines focus on the strong inclusion of investors. They "disintermediate" by eliminating the activity of a service provider previously involved in the network. The platforms that use crowdfunding to seek stakes from a community of high net-worth private investors and match them directly with project initiators. Chapter no 6 Film Financing Agencies NATIONAL FILM DEVELOPMENT CORPORATION OF INDIA National Film Development Corporation of India Industry film industry FILM FINANCING Page 25  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Predecessor Film Finance Corporation Founded 1975 Headquarters Mumbai, India Area served Nehru Centre, Dr. Annie Besant Road, Worli, Mumbai - 400 018, India Key people Nina Lath Gupta IRS (Managing Director) [1] Products Films Owner Ministry of Information and Broadcasting, Government of India Website Official Website The National Film Development Corporation of India (NFDC) based in Mumbai is the central agency established in 1975, to encourage high quality Indian cinema. It functions in areas of film financing, production and distribution and under Ministry of Information and Broadcasting, Government of India. The primary goal of the NFDC is to plan, promote and organize an integrated and efficient development of the Indian film industry and foster excellence in cinema. HISTORY It was established in 1975. Over the years, NFDC has provided a wide range of services essential to the growth of Indian cinema especially Indian parallel FILM FINANCING Page 26  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS cinema in the 1970s and 80s. The NFDC (and its predecessor the Film Finance Corporation) has so far funded or produced over 300 films. These films, in various Indian languages, have been widely acclaimed and have won many national and international awards. A recent example is the third ever Kashmiri feature film, Bub ('father' in English), which was directed by Jyoti Sarup. In 1982, the National Film Development Corporation of India chaired by D. V. S. Raju was also one of the production companies for Gandhi, which won eight Academy Awards Film journalist and former editor of Filmfare, B. K. Karanjia remained the chairman of the NFDC for several years, he had been instrumental in the establishment of its predecessor, Film Finance Corporartion. Director Ramesh Sippy took over the position of chairman of NFDC in 2012. He replaced actor Om Puri who was appointed in 2008. CINEMAS OF INDIA In 2013, NFDC started its label, "Cinemas of India", specifically to promote and distribute the parallel cinema film produced by it, since the 1960s. This also includes the separate "Cinemas of India" website, many of the movies which have long been out of circulation are now restored, and available as free online streaming and also as DVDs. Notable films in the series, include Mirch Masala (1987), Ek Din Achanak (1989), Train to Pakistan (1998), Mammo (1994), Uski Roti (1969), Kamla Ki Maut (1989) and 27 Down (1974). NATIONAL FILM FINANCE CORPORATION FILM FINANCING Page 27  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS The National Film Finance Corporation (NFFC) was a film funding agency in the United Kingdom which operated from 1949 until it was wound up in 1985. The NFFC was established by the Cinematograph Film Production (Special Loans) Act 1949, and further enhanced by the Cinematograph Film Production (Special Loans) Act 1952, which gave the NNFC the power to borrow from sources other than the Board of Trade. The NFFC was abolished by the Films Act 1985. The lawyer Sir John Terry served as the NFFC's manager for twenty years from 1958 to 1978. During that time he helped to secure the backing for hundreds of films and which launched the careers of several prominent film directors, including Ridley Scott and David Puttnam. John Terry was succeeded in 1979 by film maker Mamoun Hassan who changed the direction of the NFFC: "Hassan is the nearest thing to a whizz-kid that this country's film establishment has yet produced. (Indeed, to be strictly technical, it did not produce him, since Hassan is Saudi Arabian and has had an independent and international career as a film-maker.) Hassan has replied to early salvoes aimed at his policies by firing back at his detractors with more spirit than one has ever known from the NFFC before, in its generation-long history." Prior to leaving the NFFC, David Robinson of The Times commented "... Certainly Hassan's five and a half years at the Corporation have been characterized by independence and vim. His enthusiasm, pugnacity, taste and passionate championing of an indigenous cinema have made him a significant figure in the progressive areas of British cinema...."David Robinson (18 September 1984). "Interview: Mamoun Hassan A shining example". The Times. Hassan left the NFFC in 1984 to return to film production FILM FINANCE CORPORATION AUSTRALIA Film Finance Corporation Australia (FFC) was the Australian Government's principal agency for funding the production of film and television in Australia. FILM FINANCING Page 28  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Once a wholly owned government company, it was folded into a new agency, Screen Australia in 2008. It was established in 1988, its inaugural chairman being Kim Williams. Since its establishment the FFC has invested in 1,079 projects with a total production value of $2.58 billion. OVERVIEW The Australian government supports film and television production to ensure that Australians have the opportunity to make and watch their own screen stories. The FFC only funded projects with high levels of creative and technical contribution by Australians, or projects certified under Australia’s Official Co- Production Program. To support diversity, the FFC funded the most expensive program formats: feature films, mini-series, telemovies and documentaries. Cheaper formats such as current affairs, serial drama and ‘infotainment’ are fully financed by the market, whereas the more expensive formats would in many cases not be made without government assistance. In May 2007, the Australian Government announced the creation of a new agency, Screen Australia, which will merge the Australian Film Commission, Film Australia and the FFC. Screen Australia started operating in July 2008, effectively replacing Film Finance Corporation Australia. FILM FINANCING Page 29  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Chapter no 7 List of film production companies in India This is a list of film filmmaking, film distribution companies in india. A production company may specialize in producing their in-house films or own subsidiary development companies. Major production companies often distribute films from independent production companies. This list includes both active and no longer active (defunct) companies. Active production companies are either run by themselves or as a subsidiary. Film studios also create television programs for broadcast syndication. Company Country Headquarters Est. Notes 14 Reels Hyderabad, Tel India 2009 Entertainment angana FILM FINANCING Page 30  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Annapurna Hyderabad, Telangan India 1975 Studios a Aamir Khan Mumbai, Maharashtr India 2001 Productions a AVM India Chennai, Tamil Nadu 1945 Productions Balaji Motion Mumbai, Maharashtr Subsidiary India 2001 Pictures a of Balaji Telefilms Balaji Mumbai, Maharashtr India 1994 Telefilms a Bombay Mumbai, Maharashtr India 1934 Defunct as of 1954 Talkies a (then Bombay) Chilsag Mumbai, Maharashtr Entertainment India 2003 a Network Cloud Nine Subsidiary India Chennai, Tamil Nadu 2008 Movies of Kalaignar TV Dharma Mumbai, Maharashtr India 1976 Productions a Eros Mumbai, Maharashtr India 1977 International a Eskay Movies India Kolkata, West 1988 Founded as Eskay Bengal Video Private FILM FINANCING Page 31  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Limited Excel Mumbai, Maharashtr India 1999 Entertainment a Bangalore, Karnatak Felis Creations India 2006 a Fox Star Mumbai, Maharashtr Subsidiary of 21st India 2008 Studios a Century Fox Gemini Studios India Chennai, Tamil Nadu 1940 Hyderabad, Telangan Geetha Arts India 1972 a Kanteerava Bangalore, Karnatak India 1966 Studios a Kavithalaya India Chennai, Tamil Nadu 1981 Productions Mumbai, Maharashtr Mukta Arts India 1978 a Padmalaya Hyderabad, Telangan Unknow India Studios a n Pen N Camera Mumbai, Maharashtr India 2004 International a FILM FINANCING Page 32  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Percept Picture Mumbai, Maharashtr India 2002 Company a Pritish Nandy Mumbai, Maharashtr Communicatio India 1993 a ns PVR Pictures India Gurgaon, Haryana 1997 Rajshri Mumbai, Maharashtr India 1947 Productions a Subsidiary Reliance Big Mumbai, Maharashtr of Reliance Anil India 2005 Entertainment a Dhirubhai Ambani Group Red Chillies Mumbai, Maharashtr India 2002 Entertainment a Mumbai, Maharashtr R.K. Films India 1948 a S Pictures India Chennai, Tamil Nadu 1999 Shree Ashtavinayak Mumbai, Maharashtr India 2001 Cine Vision a Ltd Shree Kolkata, West Venkatesh India 1996 Bengal Films FILM FINANCING Page 33  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Sudha Mumbai, Maharashtr India 2008 Productions a Sun Pictures India Chennai, Tamil Nadu 2008 Sivaji India Chennai, Tamil Nadu 1956 Productions Studio Green India Chennai, Tamil Nadu 2006 Suresh Hyderabad, Telangan India 1963 Productions a Mumbai, Maharashtr Trimurti Films India 1970 a T-Series India New Delhi, Delhi 2001 Subsidiary of UTV Software UTV Motion Mumbai, Maharashtr India 2004 Communications a Pictures a nd The Walt Disney Company Viacom 18 Subsidiary Mumbai, Maharashtr Motion India 2008 of Viacom a Pictures 18 and Viacom Mumbai, Maharashtr Vishesh Films India 1986 a Mumbai, Maharashtr Yash Raj Films India 1970 a FILM FINANCING Page 34  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Chapter No 8 Popular And Well Known Film Production Houses Balaji telefilms Balaji Telefilms is an Indian company owned by actor Jeetendra, which produces Indian soap operas, reality TV, comedy, game shows, entertainment and factual programming in several Indian languages. Balaji had a partnership with White Leaf Productions from 1997 to 2006. Balaji Telefilms is promoted by Ekta Kapoor and Shobha Kapoor and is a public company listed at Bombay Stock Exchange and National Stock Exchange of India. Its work includes Kyunki Saas Bhi Kabhi Bahu Thi,[1][2][3][4][5] Kahaani Ghar Ghar Kii, Kasautii Zindagii Kay, Kaahin Kissii Roz, Kahin to Hogaa, Kkusum, Kutumb, Kasamh Se, Pavitra Rishta, Bade Acche Lagte Hain, Meri Aashiqui Tumse Hi, "Ye hai Mohabbatein", Kumkum Bhagya, the recent popular productions are Naaginand Kasam Tere Pyaar Ki. The company registered as 'Balaji Telefilms Private Limited' on 10 November 1994, at Mumbai with the objective of making television software including serials and other entertainment content by Ekta Kapoor and Shobha Kapoor. Balaji has specialised in formatted programming that can be adapted for FILM FINANCING Page 35  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS languages around the nation as well as abroad. One notable success has been Kyunki Saas Bhi Kabhi Bahu Thi known as the master of all Indian soap operas and also for setting a golden period on Indian television. Other examples include Kahaani Ghar Ghar Kii, Kasautii Zindagii Kay, Kaahin Kissii Roz, Kahin to Hogaa, Kkusum, Kutumb, Kasamh Se, Pavitra Rishta, Parichay, Yeh Hai Mohabbatein (dubbed and produced in languages across India), Bade Acche Lagte Hain, Kya Hua Tera Vaada, and Jodha Akbar. In recent years the company has been expanding its reality shows output with shows such as titles such as Box Cricket League on Sony TV. Balaji was incorporated as a public limited company on 29 February 2000, and its name was changed to 'Balaji Telefilms Ltd' on 19 April 2000. The company made public issue of 28,00,000 equity shares of ₹10 each at a premium of ₹120 aggregating ₹36.40 crore. The issue includes a Book Built Portion of 25,20,000 equity shares and a Fixed Price Portion of 2,80,000 equity shares. In the same year, 'Nine Network Entertainment India Pvt. Ltd', a wholly owned subsidiary of Nine Broadcasting India Pvt. Ltd., merged with Balaji Telefilms Ltd. During 2000-04 the stock market capitalisation grew sixteenfold to ₹571 crore when 'Star India' acquired 21% stake in the business. In 2007, the company incorporated wholly owned subsidiary Balaji Motion Pictures which creates Bollywood movies. In 2010, the company incorporated ALT Entertainment Limited a banner to produce and concentrate on niche and youth subjects in films and television. In 2012, the company incorporated BOLT Media Limited yet another a wholly owned subsidiary of Balaji Telefilms which has produced the shows Love By Chance, Yeh Jawani Ta Ra Ri Ri and Dharmakshetra and has created and produced advertisements. In November 2014, its wholly owned subsidiary Balaji Motion Pictures had tied up a deal with B4U, a Bollywood film production company to co- produce Bollywood films. In 2014, the company and Ekta Kapoor were subject to protests in Jaipur led by the Shri Rajput Karni Sena (SRKS), a Hindutva group. These occurred because of perceived communal slights in the Jodha Akbartelevision series.[7][8] FILM FINANCING Page 36  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS RED CHILLIES ENTERTAINMENT Red Chillies Entertainment (RCE) founded in 2002, is an Indian motion picture production, distribution and a premier visual effects company based in the city of Mumbai. The company was founded in 2002 by Bollywood actor Shah Rukh Khan and his wife Gauri Khan. It was transformed from the now defunct Dreamz Unlimited. Red Chillies Entertainment has formed a full-fledged film studio in India. The studio's activities span across creative development, production, marketing, distribution, licensing, merchandising and syndication of films in India and worldwide. When it comes to digital and marketing innovations for films, Red Chillies Entertainments Pvt Ltd has always been at the top of the game and often a market leader. Apart from film production, RCE has a visual effects studio known as Red Chillies VFX. The company also has a 49% stake in the Indian Premier League cricket team Kolkata Knight Riders. Sanjiv Chawla was the executive producer of the company, while Gauri Khan serves as a producer. In February 2013, Venky Mysore, the CEO of Kolkata Knight Riders took over additional responsibility as chief of Red Chillies Entertainment as well. In 2004, choreographer Farah Khan, a good friend of Khan, decided to direct a film with him. He then took over the production company Dreamz Unlimited which he created with Juhi Chawla and director Aziz Mirza and transformed it into Red Chillies Entertainment with his wife Gauri Khan, who became the producer of the first production Main Hoon Na in which Khan starred as well. The movie did well at the box office, becoming the second highest grossing film of the year. Khan also starred in the company's 2nd release, the 2005 movie Paheli, belonging to the genre of Indian Parallel Cinema, the film was critically acclaimed and was selected as India's official entry to the 79th Academy Awards in the Best Foreign Language Film category. FILM FINANCING Page 37  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS The third film produced by the company was Farah Khan's mega-budget Om Shanti Om, which was released in November 2007. The film was set in the 1970s and 2000s and paid tribute to Indian film industry of both these eras. Upon release, it broke many box office records, grossing over ₹ 1.48 billion and thus became the highest-grossing Hindi film of all-time at the time of its release. The 2009 film Billu starring Irrfan Khan and Lara Dutta was the company's next release, the film opened to good reviews, but was a failure at the box office. The latest film produced by the production company is Roshan Abbas's Always Kabhi Kabhi, the film did poorly. The company continued working on other projects until finally deciding on Ra.One (2011) starring Khan himself, Kareena Kapoor and Arjun Rampal. The pre-production work began in 2007 after the release of Om Shanti Om. The film's crew consisted of more than 5,000 members from India, Italy and the US, and was pieced together by more than 1,000 people, working in shifts, in around 15 studios across the world. It saw the inclusion of several visual effects techniques being incorporated in the production which were carried out by Red Chillies VFX. With an estimated budget of ₹ 1.25 billion, Ra.One was the second-most expensive film ever produced in Indian cinema, and the most expensive Bollywood film. The film witnessed a level of publicity campaigning previously unseen in India films, with marketing taking place over a period of nine months and involving major brand tie-ups of a 52 crore (US$9.88 million) which set the record for the largest marketing budget in India. The film released across 3,100 screens in India and 904 prints overseas in both 2D and 3D, making it the largest Indian cinematic release in the world. Subsequently, the success of the effects and the 3D version of the film prompted multiple other Bollywood filmmakers to consider technology as a part of film- making, especially in view of the success of Ra.One and the inordinately higher returns generated from 3D ticket sales. The film went on to break multiple box- office records and according to its distributors, is the second highest-grossing Bollywood film worldwide earning over ₹ 2.4 billion. Their next production was Karan Johar's directorial venture, Student of the Year (2012), which was co- produced by Johar's production company. DHARMA PRODUCTIONS FILM FINANCING Page 38  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS DHARMA PRODUCTIONS PVT. LTD. IS INDIAN PRODUCTION AND DISTRIBUTION COMPANY ESTABLISHED BY YASH JOHAR IN 1979. IT WAS TAKEN OVER IN 2004 AFTER HIS DEATH BY HIS SON KARAN JOHAR. BASED IN MUMBAI IT MAINLY PRODUCES AND DISTRIBUTES HINDI FILMS. INITIAL SUCCESS (1980–1998) The company's first production was Raj Khosla's Dostana (1980) starring Amitabh Bachchan, Shatrughan Sinha, and Zeenat Aman. The film was the highest-grossing Bollywood film of the year. The company then went on to produce Duniya (1984) and Muqaddar Ka Faisla (1987). Its next film was Agneepath (1990), which was not a major box office success, but won a National Film Award for its lead actor Amitabh Bachchan. Its next two films were Gumrah (1993) and Duplicate (1998), which were both directed by Mahesh Bhatt. tributes Hindi films. RISE TO PROMINENCE (1998–2009) Karan Johar has directed six films for Dharma and has produced all of the company's films since his father's death in 2004. The production house reached a turning point with the release of Karan Johar's directorial debut, the blockbuster romantic drama Kuch Kuch Hota Hai (1998) starring Shah Rukh Khan, Kajol, Rani Mukerji and Salman Khan. The film won several awards, including the National Film Award for Best Popular Film Providing Wholesome Entertainmentand the Filmfare Award for Best Film, and has become a classic over the years. The company's next film was Karan Johar's family drama Kabhi Khushi Kabhie Gham... (2001) featuring a large ensemble cast including Amitabh Bachchan, Jaya Bachchan, Shah Rukh Khan, Kajol, Hrithik Roshan, and Kareena Kapoor. This was followed by Nikhil Advani's tear-jerking romantic drama Kal Ho Naa Ho (2003) starring Jaya Bachchan, Shah Rukh Khan, Saif Ali Khan and Preity Zinta. Both of these films earned commercial success and critical acclaim. FILM FINANCING Page 39  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Dharma's next release was the natural horror film Kaal (2005), which received mixed to positive reviews from critics. This was followed by Karan Johar's musical romantic drama Kabhi Alvida Naa Kehna (2006) featuring a large ensemble cast led by Amitabh Bachchan, Shah Rukh Khan, Abhishek Bachchan, Rani Mukerji, Preity Zinta and Kirron Kher. The film became a moderate commercial success despite the fact that it dealt with the controversial subject of marital infidelity, though it was the all-time biggest earner in the overseas markets at the time of its release. Dharma's next release was Tarun Mansukhani's commercially successful romantic comedy Dostana (2008) starring Abhishek Bachchan, John Abraham, and Priyanka Chopra. This was followed by Ayan Mukerji's coming-of-age film Wake Up Sid (2009) starring Ranbir Kapoor and Konkona Sen Sharma. Rensil D'Silva's counter-terrorism thriller Kurbaan (2009) starring Saif Ali Khan, Kareena Kapoor, and Vivek Oberoi. Both Wake Up Sid and Kurbaan received critical acclaim, but the latter failed to make a mark at the box office. Karan Johar inherited the company from his father and made it a bigger company in this period. SRK, his brother went on to say, "I love Dharma Productions, it is my favourite film production house in India after Red Chillies and YRF!" WIDESPREAD SUCCESS (2010–PRESENT) In 2010, Dharma produced two of the top ten highest-grossing Bollywood films of the year. The fifth spot on the list was taken by Karan Johar’s counter- terrorism drama My Name Is Khan (2010) starring Shah Rukh Khan and Kajol, while the seventh spot was taken by Punit Malhotra’s romantic comedy I Hate Luv Storys (2010) starring Imran Khan and Sonam Kapoor. Later that year, the production house produced the family drama We Are Family (2010), a Hindi remake of the Hollywood film Stepmom (1998). The film was not a major commercial success, but received praise for the performances of the two lead actresses Kajol and Kareena Kapoor. The company's first film of 2012 was Karan Malhotra's Agneepath, a retelling of Dharma’s 1990 film of the same name. It featured Hrithik Roshan and Sanjay Dutt in the roles originated by Amitabh Bachchan and Danny FILM FINANCING Page 40  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Denzongpa respectively, while Priyanka Chopra and Rishi Kapoor played principal roles not in the original film. This film emerged as much larger commercial success than the original Agneepath. This was followed by Shakun Batra’s moderately successful romantic comedy Ek Main Aur Ekk Tu (2012) starring Imran Khan and Kareena Kapoor. After this came Karan Johar’s coming-of-age comedy-drama Student of the Year (2012), which marked the debut of its three lead actors Sidharth Malhotra, Varun Dhawan and Alia Bhatt. Dharma’s first release of 2013 was the unsuccessful teen comedy Gippi. This was followed by Ayan Mukerji’s coming-of-age romance Yeh Jawaani Hai Deewani (2013) starring Ranbir Kapoor and Deepika Padukonein the lead roles with Aditya Roy Kapur and Kalki Koechlin in supporting roles. The film became a major commercial success upon its release and still ranks among the highest-grossing Bollywood films of all-time. Dharma was also one of the many production houses associated with the widely acclaimed drama The Lunchbox (2013) starring Irrfan Khan, Nimrat Kaur, and Nawazuddin Siddiqui. They finished off the year with Punit Malhotra’s relatively unsuccessful romantic comedy Gori Tere Pyaar Mein (2013) starring Imran Khan and Kareena Kapoor Khan. In 2014, Dharma produced three commercially successful romantic comedies all directed by first-time directors. The first was Vinil Matthews’s Hasee Toh Phasee (2014) starring Sidharth Malhotra and Parineeti Chopra, which Dharma co-produced with Phantom Films. They then teamed with Nadiadwala Grandson Entertainment to produce Abhishek Varman’s 2 States (2014) starring Arjun Kapoor and Alia Bhatt, a film adaptation of Chetan Bhagat’s novel of the same name. After this came Shashank Khaitan’s Humpty Sharma Ki Dulhania (2014) starring Varun Dhawan and Alia Bhatt. After these three romantic comedies came Rensil D'Silva's relatively unsuccessful black comedy Ungli (2014). In July 2015, Dharma distributed the Hindi-dubbed version of S. S. Rajamouli's epic film Baahubali: The Beginning (2015), which was originally filmed in Telugu and Tamil. Upon its release, the film became a major commercial and critical success and currently ranks as one of the highest-grossing Indian films of all-time. In August 2015, the company released Karan Malhotra’s Brothers, an adaptation of the Hollywood film Warrior (2011), starring Akshay Kumar and Sidharth Malhotra in the lead roles with Jacqueline Fernandez and Jackie Shroff playing supporting roles. Dharma also collaborated FILM FINANCING Page 41  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS with Phantom Films to co-produce Vikas Bahl's romantic comedy Shaandaar starring Shahid Kapoor and Alia Bhatt, which was released one month later. Neither of these films fared well commercially or critically. March 2016 saw the release of Shakun Batra's critically and commercially successful family drama Kapoor & Sons starring Rishi Kapoor, Ratna Pathak Shah, Rajat Kapoor, Fawad Khan, Sidharth Malhotra, and Alia Bhatt. This was followed in September 2016 by Nitya Mehra's relatively unsuccessful romantic drama Baar Baar Dekho, a co-production with Excel Entertainment starring Sidharth Malhotra and Katrina Kaif. On 28th October, 2016, Karan Johar released his directorial feature Ae Dil Hai Mushkil, starring Ranbir Kapoor, Anushka Sharma and Aishwarya Rai Bachchan, which received mixed to positive reviews from critics upon release and went on to become one of the highest grossing films of the year and also one of the highest overseas grossers for the year 2016. On 25th November, 2016, Dear Zindagi, directed by Gauri Shinde, starring Alia Bhatt and Shah Rukh Khan was released to positive response from critics, getting a good opening inspite of being an unconventional slice-of-life film EROS INTERNATIONAL Eros International Media Ltd is an Indian motion picture production and distribution company, based in Mumbai. Founded by Arjan Lulla in 1977 it is considered as one of the leading production and distribution company in India. Currently, his sons Kishore Lulla and Sunil Lulla are handling the company. Eros co-produces, acquires and distributes Indian language films in multiple formats worldwide, including theatrical, television syndication and digital platforms. The group distribution network includes over 50 countries, with films dubbed in over 25 languages and offices in India, UK, United States, Dubai, Australia, Fiji and the Isle of Man. Eros has over 2,300 films in its library, plus an additional 700 films for which the group hold digital rights only. FILM FINANCING Page 42  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS In 2006, Eros International Plc, the holding company of the Eros Group, became the first Indian media company to list on the Alternative Investment Market (AIM) of the London Stock Exchange. Subsequently, the company delisted from AIM in November 2013 to list on the New York Stock Exchange (NYSE:EROS). In 2010, Eros listed its Indian subsidiary Eros International Media Limited on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in India. RAJSHRI PRODUCTIONS Rajshri Productions Pvt. Ltd., established in 1947, is a film production company based in Mumbai, India, and primarily involved in producing Hindi films. This company produced several films that were critically acclaimed. The most popular films produced by the company include Dosti (1964), Maine Pyar Kiya (1989) and Hum Aapke Hain Kaun (1994). HISTORY Rajshri Productions, the film production division of Rajshri, was set up in 1962. Its first release Aarti was critically acclaimed and was screened at international film festivals. This was followed by Dosti, a non-star-cast film which went on to become a mega success at the box-office. Dosti was presented the National Award for the Best Hindi Film of the Year (1964) and also won six Filmfare Awards. EARLY DAYS Rajshri Productions made several successful and critically acclaimed movies between the 1960s and 1980s like Dosti, Uphaar, Geet Gaata Chal, Ankhiyon Ke Jharokhon Se, Chitchor, Dulhan Wahi Jo Piya Man Bhaye and Saaransh. At the end of the 80's, when the entire film industry was in the doldrums with the advent of video, Rajshri gave a break to its in-house talent Sooraj R. Barjatya who directed Maine Pyar Kiya, a musical teenage romance, which went on to become one of Indian cinema's biggest grosser. The film won six Filmfare awards including awards for the Best Film and the Most Sensational Debut of the Year for the 24-year-old Salman Khan. FILM FINANCING Page 43  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Salman Khan moved from strength to strength and followed up the success of MPK with blockbusters Hum Aapke Hain Koun and Hum Saath Saath Hain. Hum Aapke Hain Koun remains one of the biggest hit in the history of Indian cinema, a film which instilled a new lease of life in the ailing film industry by bringing viewers back to cinema halls. The film won the National Award for being the most popular film providing wholesome entertainment and also secured 8 Filmfare Awards and 6 Screen Awards, including awards for the Best Film, Best Actress and Best Director. 2000 AND BEYOND In the next decade, Rajshri Productions produced movies like Main Prem Ki Diwani Hoon, Uuf Kya Jadoo Mohabbat Hai, Ek Vivah Aisa Bhi (by debutant director Kaushik Ghatak), Isi Life Mein (by Vidhi Kasliwal), and Love U...Mr. Kalakaar! which were not successful at the box office. However, in 2006, Rajshri Productions released Vivah under the direction of Sooraj Barjatya, which went on to become a blockbuster. FOX STAR STUDIOS Fox Star Studios is an India-based movie production and distribution company, a joint venture between 20th Century Fox, one of the world’s largest producers and distributors of motion pictures and STAR, India’s media and entertainment company, both owned by Rupert Murdoch's 21st Century Fox. Fox Star Studios works in conjunction with Fox International Productions (FIP), the international film production arm of 20th Century Fox Film. Fox Star Studios produces Hindi and regional language films through acquisitions, co- productions and in-house productions for worldwide distribution. RELIANCE ENTERTAINMENT FILM FINANCING Page 44  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Reliance Entertainment (formerly known as Reliance BIG Entertainment) is a division of the Reliance Anil Dhirubhai Ambani Group handling its media and entertainment business, across content and distribution platforms. The key content initiatives are across movies, music, sports, gaming, Internet & mobile portals, leading to direct opportunities in delivery across the emerging digital distribution platforms: digital cinema, IPTV, DTH and mobile TV. HISTORY RELIANCE FORAYED INTO THE LARGELY UNTAPPED VIDEO RENTAL MARKET IN INDIA BY LAUNCHING BIGFLIX.  The company plans to launch TV Channels.  On July 15, 2009, Reliance and Steven Spielberg announced a joint venture with funding of $825 million.  Big 92.7 FM launched a radio station in Singapore considering 8% of the population residing there is Indian.  On April 5, 2010, Reliance acquired a 50% stake in Codemasters.  On May 28, 2010, the company achieved the first ever Bollywood cross- over into the Hollywood box office market with the release of Kites.  Reliance co-produced director Steven Spielberg's film War Horse, which was released worldwide on Christmas Day in 2011. Many other projects from the director also have the company as a producer.  In January 2012, it was announced that Reliance DreamWorks movies garnered 11 Oscar nominations.  In November 2014, the company announced plans to begin the acquisition process of the North American and European mobile game studios of DreamWorks Studios in early 2015. FILM FINANCING Page 45  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS PVR PICTURES PVR Pictures is the film production and distribution arm of PVR Group, which also owns PVR Cinemas, one of the largest multiplex companies in India. HISTORY The company has its origin is Priya Cinema in Vasant Vihar in South Delhi, which was bought by current owner 's father in 1978, who also owned a trucking business, Amritsar Transport Co. In 1988, Bijli took over the running of the cinema hall, which was revamped in 1990, and its success led to the founding PVR Cinemas. PVR Pictures film production début came in 2007 with Taare Zameen Par and Jaane Tu Ya Jaane Na. It has distributed over 200 Hollywood films, including The Aviator, Mission: Impossible III, Kill Bill, The Hurt Locker, The Twilight Saga and Chicago; over 100 Bollywood films, including blockbusters such as ‘Ghajini’, ‘Golmaal Returns’, ‘All The Best’, ‘Don', ‘Sarkar Raj’, ‘Omkara’ and nearly 25 regional films since its inception. In October 2012 the company acquired the Indian distribution rights for the film adaption of Salman Rushdie's Booker Prize-winning novel Midnight's Children. Its president is Kamal Gianchandani, and its current promoters are Ajay Bijli and Sanjeev K Bijli. Ajay Bijli is the chairman and Managing Director of PVR Ltd while Sanjeev K. Bijli is the Joint Managing Director of PVR Ltd. FILM FINANCING Page 46  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Chapter No 9 Film Funding Companies MOVIE FUND – A FILM FINANCE COMPANY How The Movie Fund.com Can Help raise Film Finance FILM FINANCING Page 47  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS TheMovieFund.com is a revolutionary new film finance and investment company that can help filmmakers take advantage of the new trend in crowdfunding movies by linking film investors and filmmakers through a shared passion for film. Bringing together ordinary members of the public, film financing companies, and producers, with writers and directors, it’s the one-stop shop for filmmakers to find movie investors and film financing. One thing that many new filmmakers fail to realize is that there is a huge investment of time, effort and energy required in the movie financing and funding of any film. Orson Welles was once quoted as saying, “I spend 5 percent of my time making movies and the other 95 percent of the time looking for the money to make them.” Well, look no further than TheMoviefund.com. Would-be, best-selling film producers first have to get the serious, large- scale movie investors interested in their latest films before they will be given the funds to pay for the actual filming. To do this, they need a plan. Filmmakers must develop the idea behind the film, create a convincing pitch to sell the movie to those angel investors who really matter, work on the film’s script to attract actors that can secure investments, create a working storyboard to give investors a visual that allows them to envision the movie on the big screen, consider casting ideas that will help raise film funding or limit the budget, and scout the right locations for the film. Filmmakers need to create a solid movie and film finance package. Without many of these details, they may fail to come across as a serious investor who truly has the funds to invest in movies. Yet, all this costs money. TheMovieFund Keywords: film finance inc, watch movie online, watch movies now, online free movies, online movie, movie showtimes, new movies releases, movies in theater, movie release dates, movie ratings, film funding. About Movie Funding Investing : The Movie Fund is designed for Investing and everyone who wishes to upload their scripts, film ideas as well as other movie related projects that require funding. It assists the filmmakers by providing start upfunds needed for location scouting, pre-production scripts, post-production funding, castings and budgets for film production. When it comes to getting funds for their films, investors or FILM FINANCING Page 48  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS filmmaker has to typically submit their short description of film or project to the site. The site already holds several registered investors who can access the submitted project and allocate funds accordingly. In this way, the filmmakers are contacted directly by the investors by cutting down the middleman. There are numerous non-profit organizations available, which focus on assisting independent filmmakers to get funds to finance as well as distribute their films. Being a filmmaker, you can easily do investing in movies by getting funding from the online websites. There are many kinds of movie funding options available such as pre-sales, equity, crowdfunding, tax incentives, gap, private equity and so on. While raising capital to the film project, there are plenty of elements to consider such as talent, creativity, timeline and many others. Therefore get some basic funds for investing in movie production that you create. Other benefit behind investing in movies is that you will get high returns on investment as well. When comparing with other websites that offer funding, The Movie Fund seems to be the best choice to get funding and also ideas to develop your script. investing-in-movies. Seeking Assistance Of Film Investor: The Movie Fund offers one-stop solution for a number of filmmakers by holding a big network of industry professionals who are willing to offer wonderful advice regarding all characteristics of film making process. Films are usually considered as high-risk investment because it involves tax credits, genres, film budgets, and distribution output and producer track records. However, it is iniquitous to create a film without much investment. By getting assistance from The Movie Fund, you can obtain the golden opportunity to meet the movie stars along with that you can attend international premieres as well as after-show partiers. Since, the Investing can get support in terms of tax incentives, film contracts and legal fees for investors. Benefits Offered By Movie Funding Option: The financial environment of film production is undergoing massive changes these days due to the advancement of technologies that has greatly modified the filmmaking process. The independent film investors can get training and understand about filmmaking process easily through online site. Media and entertainment industry is considered to be the biggest industries in the globe. Due to the opportunities and lifestyle thrown open due the developments in FILM FINANCING Page 49  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS technology, the worldwide filmmaking industry is also attaining higher heights. In today’s life, most of the business is concentrating on filmmaking process and they are in need of funds to complete their film production without hassle. The Movie Fund acts a wonderful source for funding films of distinct concepts with numerous investment prototypes so as to spend in the film project. FILMMAKER & FILM INVESTORS RESOURCES TheMovieFund is also an extensive resource for filmmakers. The company provides a resource centre to download; film investment contracts, film investment agreements & have templates for film Investor contracts for a single purpose entity (“SPE”). We provide weekly updates, documents and film investor and investment news via our investor blog covering all aspects of; investing in independent films, investing in movies and finance films. The blog also provides our filmmakers with independent film financiers blogs; movies on finance articles and an overview on Prescience film finance, papers on Indie film financing and film equity financing. Our film Investor blog also covers International movie funds like the Aegis film fund to International production tax breaks providing the best film finance advice for movies in pre-production and development stages. Film investors can read entertainment news on “large scale movie slate investments” and opportunities on “multi-award worthy independent film” investment opportunities and everything you need to know to invest in movies and investing in films. Whether you need to finance a Movie; find a Movie on finance, access our Film investor’s directory to help finance movies or find film financiers to make a movie investment…..The Company has an extensive database of independent film investors & film funding companies for movie investing and private equity film financing. TheMovieFund is here to help. ALCON ENTERTAINMENT- A FILM FINANCE COMPANY FILM FINANCING Page 50  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Los Angeles-based Alcon Entertainment develops, finances and produces feature films for broad and diverse audiences. The Company was born out of a business plan written by co-founders and co- CEOs Broderick Johnson and Andrew Kosove for FEDEX Founder, Chairman and CEO Frederick W. Smith, who ultimately agreed to personally finance the Company, which was officially incorporated in January of 1997. To this day, that plan's fundamental concept remains the core principal of Alcon's business philosophy in that the Company integrates the optimal incentives and fiscal accountability of independent filmmaking with the principal assets of a major studio alliance. Alcon is an independent film company in the truest sense given that the Company secures its financial resources independently, thus enabling it to focus on and produce economical, cost-effective content, while offering filmmakers and creative talent a streamlined, non-bureaucratic environment in which to work. Early in its history, Alcon established a long-term distribution arrangement with Warner Bros. Under the terms of the deal, Warner Bros distributes the films Alcon finances and produces while the two companies work closely in the marketing of the films. Alcon offers the considerable advantages of a truly "independent" film environment while concurrently capitalizing on the most important attribute offered by a major studio, namely: access to a powerful, worldwide distribution pipeline. This dynamic combination has allowed Alcon to consistently minimize costs, remain nimble, streamlined, and "filmmaker friendly," while at the same time maximizing each of its films' revenues through Warner Brothers' distribution mechanism. Most crucially, Alcon Entertainment determines its own destiny by retaining ownership of the films it finances/produces. Today, Alcon Entertainment is one of the most enduring, well-respected independent film companies in the world. It controls a 20-title library and has generated over $2 billion in revenues throughout its history. The list of successful films the Company has financed, and/or produced span multiple genres from family classics such as MY DOG SKIP and the recent hit DOLPHIN TALE to thrillers such as INSOMNIA (director Christopher Nolan's FILM FINANCING Page 51  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS first studio distributed film) and THE BOOK OF ELI, starring Denzel Washington, to dramas such as the Academy Award nominated THE BLIND SIDE, which is the highest grossing sports-themed film in history. Alcon has expanded beyond its core activities of film finance and production into the related businesses of television, talent management and music. Sharon Hall, a highly respected television executive who was previously head of drama at Sony Television, is President of the newly formed Alcon Television. The Company also formed Alcon Management Enterprises (AME), a holding company for as many as six or seven talent management companies that Alcon may acquire in the future. The first acquisition under the AME banner was Madhouse Entertainment, run by partners Robyn Meisinger and Adam Kolbrenner. Madhouse is a successful boutique literary management firm representing over 50 film and television writers. Alcon Sleeping Giant (ASG) Music Group is a joint venture designed to integrate the combined companies' music enterprises into a new music model for the modern business of film, television and commercial media production. As part of ASG's unique services model, the company will provide revolutionary solutions for music supervisors, film companies, television companies, brands, gaming and commercial media companies by utilizing an in-house and global network of top talent for music and song creation, production, composition, licensing, promotion, distribution and label services. Michael Hodges will serve as Co-CEO of ASG with Alcon COO Scott Parish. For those interested in Greek mythology, Alcon was a companion of Hercules and an archer who never missed his target. Johnson and Kosove decided on the name for Alcon Entertainment while perusing a book entitled "Obscure Greek Heroes." VIACOM 18 MOTION PICTURES Viacom 18 Motion Pictures Type Public Industry Film Headquarters Mumbai, India[1] FILM FINANCING Page 52  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Key people Ajit_Andhare, [COO] Parent Viacom 18 (Viacom, Inc./Network 18) Website www.viacom18movies.com Viacom 18 Motion Pictures, a part of Viacom 18 (a Viacom and Network 18 joint venture) based in Mumbai, is one of the first studio model based motion picture business in India, with an operation that involves acquisition, production, syndication, marketing and worldwide distribution of full-length feature films. UTV MOTION PICTURES UTV Motion Pictures Industry Film production, film distribution Founded 2004; 12 years ago Founder Ronnie Screwvala Defunct September 1, 2016 Key people M. Saravanan (Managing Director) Products Films Owner The Walt Disney Company FILM FINANCING Page 53  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Parent UTV Software Communications Website www.utvgroup.com/motion-pictures.html UTV Motion Pictures was a film unit of UTV Software Communications, a subsidiary of The Walt Disney Company. UTV Motion Pictures have formed one of the leading film studios in India. The Studio’s activities span across creative development, production, marketing, distribution, licensing, merchandising and syndication of films in India and worldwide. UTV Motion Pictures as a dominant player in the Indian film industry has been in the forefront of bringing Indian films to a global audience and the last decade in Indian cinema has seen UTV Motion Pictures delivering some of the most iconic films. UTV Motion Pictures' films have also been selected to represent India at the Academy awards; films were Rang De Basanti (2006), Harishchandrachi Factory (2009) Peepli Live (2010) and Barfi! (2012). In 2011, UTV Motion Pictures also became one of the few studios to successfully venture into South Indian cinema. UTV Motion Pictures has a library of over 70 films including Hindi, Regional, Animation and International Productions, which have been showcased in over 50 festivals across 28 countries, receiving almost 250 awards in the last 7 years. On September 1, 2016, Disney Indiaannounced that it was ending film production in the Indian film industry thus putting UTV into an uncertain future with the current head of the studio reportedly leaving immediately. YASH RAJ FILMS Yash Raj Films Private Limited FILM FINANCING Page 54  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Type Private Industry Entertainment Founded Mumbai, Maharashtra in 1970 Founder Yash Chopra Headquarters Mumbai, India Key people Aditya Chopra (Chairman) Pamela Chopra, Uday Chopra Products Films Music Owner Aditya Chopra Subsidiaries  Yash Raj Films International  Yash Raj Films USA, inc.  Y-Films  YRF Television FILM FINANCING Page 55  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS  YRF Entertainment Website www.yashrajfilms.com Yash Raj Films (YRF) is an Indian entertainment company established by Yash Chopra, an Indian film director and producer who was considered an entertainment mogul in India. His son Aditya Chopra also produces films under this banner. INITIAL YEARS Yash Chopra started out as an assistant to his elder brother, B.R.Chopra, and went on to direct five films for his brother’s banner - B.R.Films - each of which proved to be a significant milestone in his development as a director. These were Dhool Ka Phool (1959), Dharmputra (1961), Waqt (1965), Ittefaq (1969) and Aadmi Aur Insaan(1969). He has wielded the baton, additionally, for 4 films made by other film companies -Joshila (1973), Deewaar (1975), Trishul (1978) and Parampara (1993). Out of the films 52 produced by YRF till 2012, Yash Chopra directed only 13 films. Darr (1993), Dil To Pagal Hai (1997), Veer-Zaara (2004) and Jab Tak Hai Jaan (2012) were his latter movies and all of them featured Shah Rukh Khan. Khan has played the lead role in nine movies produced by Yash Raj Films and remains their most illustrious collaborator, most of them directed by Yash Chopra or his son Aditya Chopra. THE CORPORATION OF YASH RAJ FILMS Yash Raj Films has launched its own music label called Yash Raj Music and produces DVDs, videos and VCDs under the Yash Raj Films Home Entertainment label. YRF Home Entertainment has acquired the rights for classic films created by Raj Kapoor and his production company R.K. Films, as well as B.R. Chopra and his production company B.R. Films. In 2006, Yash Raj Films unveiled its new film studio. Since 2007, it has sold its music in digital format through the site along with DVDs and audio CDs. It has also started FILM FINANCING Page 56  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS selling its music on iTunes. In May 2007, it linked with The Walt Disney Company to co-produce animated movies in India. In 2004, the Hollywood Reporter placed Yash Raj Films at number 27 in a survey of the "Biggest Film Distribution Houses" in the world; it is India's biggest production company as of 2006. Yash Raj Films has launched its own merchandise label called YRF Merchandise which offers a range of products embellished with pictures and posters from Yash Raj Films like Rab Ne Bana Di Jodi, Band Baaja Baraat. SUBSIDIARIES OF YRF  YRF Entertainment  Yash Raj Music  Yash Raj Home Video  YRF Television  Yash Raj Films International  YRF Store  Y-Films, a production house created in April 2011 to provide a platform for young talent and innovative marketing.  Yomics  Diva'ni, India's first Bollywood inspired fashion label OFFICES In India, YRF has additional offices in Delhi, Jalandhar, Jaipur, Amravati, Indore, Bangalore, Secunderabad, Kolkat a, Chennai and Cochin. There are also offices in the United Kingdom, the United States, and the United Arab Emirates. FILM FINANCING Page 57  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS Chapter No 10 CONCLUSION: LEARNINGS FROM THE ABOVE PROJECT: From the above project we can conclude that-  Media & Entertainment (M&E) Industry is one of the largest industries in the world. Due to the lifestyle and the opportunities thrown open by the advancements in technology, the Global Media & Entertainment Industry today has everything going for it.  In this 21st century, the major business centers of filmmaking are concentrated in United States, India and China. Hollywood Film Industry has had a profound effect on cinema across the world since the early 20th century. Hollywood has an overwhelming domination among the top grosser worldwide – almost all of the top 50 movies are made in Hollywood.  The Indian film industry is the 2nd largest in the world, with more than 1,000 films produced every year in more than 20 languages, and 3.3 billion tickets sold annually. "Mumbai-based Bollywood film industry could be an alternative worth considering for prospective film investor, with middle class growing by 40 million a year." (CNBC Special Report)  The Indian M&E industry was valued at US$16.3 billion in 2010. The industry is forecast to flourish at a compound annual growth rate (CAGR) of 12% to reach a worth of US$25.8 billion by 2014. In 2011, it was FILM FINANCING Page 58  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS valued at US$18.3 billion. (E&Y Report)  Globally, film funds are a major source of funding films with various investment prototypes to invest in a film project. However, in India, the dawn of film funds is at an infant stage, though the banks ventured into film financing more than a decade ago.  Nowadays, increasingly films in India are being financed by organized sources (comprising APO funds, institutional / bank loans, private equity / venture capital from institutions & private sources directly or through investment vehicles & companies). Chapter No 11 BIBLIOGRAPHY AND WEBLIOGRAPHY  Books Referred:  The Art of Film Funding  Film Financing Handbook  Websites Referred:  www.wikipedia.com  www.filmfed.com  www.quora.com  www.moviefund.com FILM FINANCING Page 59  PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS FILM FINANCING Page 60