Is business collaboration, rather than market competition, becoming Essay

Is business collaboration, rather than market competition, becoming the key to success Discuss in relation to two sectors - Essay Example Townsend and Shelley (2008) opined that, competition and collaboration exists in a business side by side and provides interdepartmental competition within the collaborative organizations. In many times it has been proven that, collaboration with the rival firms creates stronger business even with apparent competitor. In the current business scenario, getting away from the competition is quite tough. A business cannot resist itself from entering into a market competition. But collaboration is more active to inject aviation and fitness within an industry, more importantly in providing better experience to the customer. Organizations those are not able to form collaboration, are not much effective to encourage innovation towards the business growth and strategic capabilities. As businesses are becoming more close to the global world, collaboration is becoming increasingly important to ensure long term existence. The two industries where business collaboration can be experienced and observed in plenty are the IT industry and the Automobile industry. Collaboration among the IT industries has resulted to deliver IT based solution that are more flexible and tailored to meet changing business and customer’s needs. Examples of collaboration in IT sectors are Microsoft to Nokia, Google to Motorola etc. On the other hand, focusing on the collaboration technique, Auto mobile industries also gained high production capacity and margin to the high volume. Some major collaboration that already has taken place in automobile industry is general motor to PSU, Tata to Jaguar etc. Undoubtedly, collaborative strategy and dynamic is more effective in comparison to competition to provide innovation and business growth. Collaboration is more appropriate to competition in creating better future for a business. Ring et al. (1994) opted that, global competition may send a business to the outer space from the industry, but

Marketing Mix of Walmart Case Study Example | Topics and Well Written Essays - 2000 words

Marketing Mix of Walmart - Case Study Example Furthermore many advertisements have deeper meanings than when seen at first sight especially in magazines where the main goal of the advertisement is to convey a message to the readers through the use of text or symbols. Central to much of modern day advertising in glossy magazines is the use of the metaphor (Proctor et. al, 2005). Metaphors are often used to broaden the way of understanding things. They also lead to a high level of ambiguity in the metaphoric form. Advertisers are finding it more and more difficult to persuade customers about a specific product. Some reasons for that is the higher educational levels and wide experience of using the products. As a result, some advertisers have moved towards creating advertisements that are out of the ordinary by using double meanings 'polysemy' or by integrating ration with emotion. Businesses today face challenges such as globalisation and opportunities as technology advancement and decreased legislation. Marketing is the service concept, which is aimed at the creation, promotion, and delivery of goods and services to the customers. Although many non-profit organisations don't sell products but they market their mission. They need to make the people understand their cause. Very often it is assumed that the people will automatically support the good cause. Unfortunately, this is a false premise. Even the best of programs will fade into obscurity unless non-profit management intentionally makes other groups, associations, businesses, and individuals aware of their mission and continuously maintains that level of awareness. Communication builds understanding and advocates change. Non-profits should define their intended audiences, target their messages to these groups, and outline strategic plans that will best use limited resources to meet organisational goals and objectives. How many people in your community are alert to the good work of your organisation Effective communication and a consistent image also enhance the ability of non-profit organisations to raise money. If local community members do not have an awareness of the good work that a non-profit does; it is unlikely that they will contribute to a fund raising campaign. In turn, if private foundations do not see financial support at the local level, they may be less inclined to award grants. Foundations also look at grant proposals to see how an organisation plans to communicate the results of their program. Marketing is an on-going, cumulative strategy that can build financial partnerships. Regardless of an organisation's size or mission, here are some essential elements of successful marketing that will work to build community awareness and support. Wendy Gray Maynard, Marketing for non-profit Organisations, Concept Marketing Group, Inc., available at http://www.marketingsource.com/articles/view/2101 The American marketing association defines market research as "The systematic gathering, recording, and analysis of data about problems relating to the marketing of goods and services". Consumer analysis is an

Trends in Indias Film Industry

Trends in Indias Film Industry 1.  Chapter One: Introduction In these modern times of instant digital communication, film has turn out to be one of the most vital way through various nations and cultures reveal their values and identities. Moving image technologies has turn out to be all-encompassing in our lives. They are huge business. Apart from that, a capability to recognize and apply them has become as important for the people of this present era as literacy was in the times of19th and 20th century (India PR Wire, April 4, 2007). The tempo, scale and consequences of this transformation are significant enough. The Indian Film industry has made a huge development ever since the Motion pictures first arrived in India in the year of 1896 when the Lumiere brothers revealed six silent short films in Bombay. The first feature film of India named- King Harishchandra (which was a silent movie) was released in the year of1913. In India the first ‘talkie’ movie that released was Alam Ara in the year 1931 (India PR Wire, April 4, 2007). 1.1  Film Production Houses In India A film production house is normally connected with the in-house production. It could categorize, make or telecast various segments of programs around news, films, multimedia, television shows, sports or ad films. India can be regarded as a home to a several well-known production houses from all the aforesaid stated areas. www.bestindiansites.com specifies top leading Indian websites on production houses of India, sports production house, ad film production house, film production house, sports production house, information on production house, list of production houses, television production house, multimedia production house, and a several other significant information’s (Subramaniam, A, 2003). We can in reality utter about various types of production houses such as Independent and corporate and just detail it by stating that Individual production houses are managed by just 1 or 2 producers and the infusion of capital investment for the production purpose is mainly generated by personal investment or by the means of loans taken from private investor. For corporate houses we could only cite that it is just like as any other corporate deal with the only differentiation that it produces films which is considered under the head of creative segment (essentially organised corporate structure of producing in creative industries – which is a new concept for Indian film industry) (Subramaniam, A, 2003) So when ‘Industry’ status was granted in 2000, Corporate started getting attracted towards the films industry realising the huge potential that was there to be exploited. When the corporate started entering to film industry with huge investment power they started incorporating studio culture of Hollywood by following vertical integration. Leaving behind the prevailing system of horizontal integration to the independent producers. The studio model production house started giving more importance to the content. It stressed on script development, introducing younger generation actors and directors, budget and time management, co productions and international distribution.  None of the new corporate production house had the background of film production when they entered the segment. However most of them were involved in activities related to the media (The Business Line, 2007). Barney says that the first to exploit the resources would gain competitive advantage over its rivals. This is exactly how the corporate production houses gained advantage over independent producers. The Industry had a lot of potential to grow with its wide acceptance globally. but the independent production houses had neglected this aspect, so when the corporate entered the industry they took complete advantage by using the unexploited resources of reach of the films and its growth possibilities steps (Barney, 1991). To exploit the resources of growth prospective, the studio model was developed under these parameters- To Produce and co produce the movies with strong content and story line. To complete the movie with in the budget and also in time. To sign contractual agreements with actors and directors. To focus on medium and large scale budget movies. To develop a huge distribution network nationally and internationally These parameters are not different from any other studio model in the world. Corporate production houses main aim was to apply these practices and standards in other markets, to the Indian market. The reason for doing this was to make maximum utilisation of the resources available. Already registered in the London Stock Exchange, several Indian film companies like as Eros, Ad labs, India Film Company, and utv – have generated immense capital from the various institutional investors who were keen to invest in Indian film companies. Moreover several Western film companies are looking forward for acquiring an ample equity share in these companies (Desai 2007). In this regard on 24 January 2005, Percept Picture Company associated with Michael Douglas’ production company Further Films and Sahara One to co-produce the $50-million Racing the Monsoon. Also on 1 September Sahara declared one more alliance, and this time with a Hollywood producer Donald Rosenfeld for Tree of Life starring Colin Farrell. These are two among a total of six Hollywood coproductions. (Kohli- Khandekar 2006.). On 20 October, 2005, Sony Pictures sign on Sanjay Leela Bhansali to co-produce Saawariya. The film was released globally in the year of 2007 with around 1,000 prints, a figure which was not heard of in the previous times for an Indian film. [The figure is on average 250.] Moreover this was the first time that a renowned Hollywood studio (that one of top six) had produced an Indian film. (Kohli-Khandekar 2006.) Indian admired cinema, remarkably Bollywood – the Mumbai (Bombay) film industry has witnessed several transformations given that it’s first beginnings. A few key modifications that took place at the turn of the century when Indian Popular Cinema gained the position of an industry.(1) After that the Indian film has developed in new directions. One such change was a more intense interplay between the global and the local which took place during the 1990s. Today, every single function and activity related to the Indian film business is becoming well defined and systematized, be it the retail infrastructure, financial aspect, marketing or distribution. Even films themselves are gradually falling into place. In just under five years, the industry has shed five decades of baggage and has become an organised business. This is a new Indian film industry (Kohli-Khandekar 2006). Film producers are interested in creating serious corporate structures, and Indian as well as foreign business is pouring money into the cinema. A wall of money is descending on Bollywood and there is a huge bubble building up (Desai 2007). Evaluating by the amount of movies produced by the Indian film industry, which is about more than one thousand movies per year, it is been regarded as the largest movie industry of the globe. The studio has reached international and also the profit earnings of the several Indian movies were greater in overseas locations than in India. Indian films have been witnessed in the leading ten lists of movies in the continents of UK and USA ((The Business Line, 2007)). 1.2  An overview of Indian film industry 1.2.1  Historical Section How Bollywood has evolved India is been regarded as the biggest movie industry of the world, if we talk about the number of movies produced in a year. It produces around more than 1000 films per year, which is greater than any of the film producing country. The Indian film industry is commonly regarded as BOLLYWOOD. The first Indian cinema was arrived in the year of 1913 with RAJA HARISHCHANDRA firstly coming into the picture and paving its way to the new period of silent cinema in India (Das Gupta, S., 2006). Since that time it has witnessed a vast series of evolution both in conditions of making and marketing of the Indian films.  We will largely talk about the evolution that took place from the year of 1980s to present time. India produces more films than any other country in the world, the government of India didn’t recognize filmmaking as an official industry until as recently as 2001. Before then, it was impossible for producers to get loans from banks or even insurance for their productions. As a result, producers often paid for their films out of their own pockets – a practice most American producers would consider absurdly risky – or obtained financing from less savory sources (Das Gupta, S., 2006): The unruly aspects of film production weren’t just limited to its financing. In some cases, it would take years to shoot a film. Overbooked film stars would show up egregiously late on set (or not at all) without penalty, scripts were often rewritten on set depending on which actors showed up, contracts were verbal and often violated, and produced films had no guarantees of finding distribution. All of these factors combined to make Bollywood film production an extremely risky endeavour (Das Gupta, S., 2006). 1980-1990 In India maximum number of films were produced by Independent (SingleSolo) producers or Family production houses, Big production companies like Rajashri productions, B.R Productions and R.K Productions were family owned production houses  and in some cases it can be traced back to several generations.(Taebue and Lorenzen-2007)   â€Å"In this period the Indian film industry seemed to make the least progress and in some case journey in the path of deprogress† (Ashish Tiwari). Most of the films were produced on a Formula which had protagonist the male lead character of the film who is called as the Hero and his female counter part as the Heroine who romanced with the Hero singing and dancing around the trees, this strategy gave birth to the masala films (Hindi for â€Å"spice mix†) â€Å"It was a compound made up of several elemental combinations that had drama comedy and romance along with song and dance sequences in symbol driven rather than plot driven† ( Lorenzen Taeube-2006). â€Å"The controversial author Salman Rushdie found a very precise and creative term that sums up the subject of Indian films perfectly, describing it as: ‘Epico-Mythico-Tragico-Comico-Super-Sexy-High- Masala-Art’ (Salman Rushdi, 1995 in â€Å"The Moor’s Last Sigh† quoted in Mishra,)à ¢â‚¬ (Adleline Pissang-2000).  Repetition of these kinds of stereotype films kept the audience away from theatres. Introduction of colour television and national coverage by Doordarshan in early 1980’s caused a drop in demand for Indian films. The middle class audience preferred to watch new Television soaps and old films on video cassettes (VHS) in their home rather than going to cinema halls. So the cinema halls became a run down and regarded suitable only for lower class men who could not afford a television preferred watching hard core violent films in theatres with lots of action and skimpily clad women dancing in the rain (Misara-2002). Competition from television made film production houses think innovatively, to hold their grip on the medium, so they started upgrading their films with lavish sets and so called â€Å"multi starrer† films which in turn increased the importance of star actors. So naturally the star actors wanted to cash in on their ‘star value’ and started charging exorbitant sums to act in a single film which in turn escalated the production cost of the film (Gopalan-2002). This was at the same time when the Indian music industry was on a high and could turn around the profit margins of even those films that failed at the box- office. The movie soundtrack became a key publicity stunt for the movies and the number of tracks and their popularity increased steadily. The pre- movie launch of music could determine the fate of a movie because if the music did well in the market then it created a huge wave amongst the public before the film got released. The sales of the audio cassettes used to bring in good share of revenue. The producers always hoped and worked towards making the music of their film a hit by casting good/popular music directors and famous playback singers for their films. Again, the producer had to invest a lot more on a popular music director but it was chance worth taking (Ganti-2004).   1990-2000 The introduction of cable T.V. was the greatest revolution of this era. It changed the outlook of film industry, though initially the survival of film industry was challenged with the entry of cable T.V. as it was an instant hit with the audience because it provided plenty of regional language channels like ZEE TV, SUN network and as well as few English channels STAR, HBO which aired films on their channels. But gradually the production houses understood the potential of the cable T.V. as it found a way for new source of income through selling its film rights at relatively higher prices for its telecast in television which is called as satellite rights (Pendakur-2003). Subsequently the film industry started depending on television as a medium of publicity by broadcasting songs and advertising campaigns of their films to pull the audiences to the theatres (David Hancock-1999). Music channels like MTV and V channel could not sustain by just transmitting private non film and international music albums so they had to take cover of film songs to increase their popularity in India (Bose-2006). It is believed that the criminal sources like underworld had a very strong hold on the Indian film industry; they controlled the whole production process of the films that they financed by dictating the terms in Bollywood like casting a superstar and selecting brilliant directors to work for their films. It is also believed that celebrities of the industry had close links with the mafia. Though usage of Black money (unaccounted money) in films was not an unfamiliar thing for ages but funding from underworld started in this period. It is estimated that 40% of film productions were financed by the underworld (Kripalani and Grover 2002; David Hancock-1998).   The early 1990’s can be called as the period of stagnation; the commercial cinema had ridiculous dialogues, baseless stories with no originality in them (Ashish Tiwari 2007). Few films in mid 1990’s were huge hits which broke most of the previous records. These films were big budget, romantic films (Dwyer and Patel) which upheld the family values in them. The two astronomical hits were HUM APKE HAI KAUN? (Who am I to You?) This released in 1994 and went onto run for two years in more than 50 theatres and DILWALE DULHANIA LE JAYENGE!! (The Brave Heart Will Take the Bride) got released in 1995 and was still running in its 13th year for 679th week as on 17th October 2008 at Marata Mandhir Cinema in Mumbai (www). Both these films were on similar lines, they were big budget romantic films with no actions sequence in them. In the former’s case the whole film was shot in beautiful gigantic sets going outdoors only for song sequence, which had 12 music tracks in it. In latter’s case maximum portion of the shoot took place in foreign locales. The audio of both these films were massive hits because they used the full potential of television by telecasting their songs and ad campaigns before the theatrical release. Both the production houses (Rajashri Productions and Yashraj Productions) of these films took great interest in refurbishing the theatres before the release of their films because they precisely knew their target audience were the upper middle class and family audiences who were content with television and they had to bring them back to the theatres. Once they succeeded â€Å"it marked the dominance of new middle class and uphold them to the pleasure of socially mixed audie nce both in India and overseas†. (Dwyer and Patel-2002) Rajashri and Yashraj Productions were the good old big production houses which started the trend for these kinds of films with big budget, but most of the small scale productions could not cope with this and had to stop producing films. Gradually number of films produced per year dropped. Source: David Hancock; Global Film production (Working Document) Venice Conference The biggest and greatest breakthrough in the Indian Cinema came in 1998. This is the year the Indian government recognised the potential of Indian cinema and granted the official status of ‘Industry’. Until then the public as well as private banks and other big financial institutions desisted from getting involved with the film production companies so the producers always had to depend on private money lenders for the capital for their films (Dwyer Patel, 2002). Now the production houses are getting their capital from public investments through semi public Industrial Development Bank of India (IDBI) and other public banks (Lorenzen Taeube, 2006) 2000- Till date.. Indian Film Industry started in its way of revival of sorts, in 2001 all the prints of the film Chori Chori Chupke Chupke which had a huge star cast was seized by the Central Bureau of Investigation suspecting it to be funded by the underworld and the producer of the film Bharath Shah was arrested for having close connections with the underworld. After this incident most of the producers feared to be identified with the under world. So the underworld gradually lost its hold in the Bollywood. Shooting at overseas location for a film is not new to Bollywood they have been doing this since 1960’s but currently there is an increasing trend of Indian film crew shooting at foreign locales. This is because of the huge global market for the Indian films. Many films are released simultaneously in U.S.A. and U.K.  and there are instances where the returns from overseas collections is higher than the home collections.  The script writers and Directors cannot neglect the overseas market any more while scripting and shooting for their film (Dudrah, R K, 2006). After the liberalisation of the industry in 1998 Direct Foreign Investments, Global Investors, Private Corporate started entering the film industry. Hollywood Majors like Universal, 21st Century Fox started investing in the Indian film industry through joint ventures with the Indian production houses. The corporate production houses are gaining importance in the film industry. Corporate houses like ADLABS, EROS, UTV, K.SERA SERA and many others have already made a mark in B.S.E. (Bombay Stock Exchange) and even in L.S.E. (London Stock Exchange). In the current scenario 20% of the total India films are produced by corporate giants (Anand times- 2006).   They have developed professional ways of organising business, mergers, outsourcing, distributing, use of new technology and marketing content.  The corporate houses have brought in the much needed professional flavour in to films which were missing in the production process earlier. The main advantage of the corporate house is it can produce more number of films simultaneously; it produces 5-6 films per year where as compared to the individual production houses cannot afford to produce more than 2-3 films in a year even after the deregulation. The greatest advantage of a corporate production house is it has a huge capital to invest on its films. Usually the risk is higher on a single movie basis, but the risk spreads out as they produce lot of films simultaneously.  They employ professionals in their firm as compared to the single producers of 80’s who used change their crew after every film. Few corporate houses even have their own multiplex cinema which helps in theatrical release as well as in developing a marketing strategy for their films. The corporate giants are investing hugely on the industry as a result of this the film Industry is already the 3rd largest industry in India (Dudrah-2006). The production houses are aiming at a homogenous or serial form of production as opposed to heterogeneous form of production they had earlier. The main purpose of switching to this form of production is to control all means of production and operate all aspects of film making from finance to production and distribution (Prasad-1998). The best example being Yashraj Productions. They have their own studios for recording, dubbing and editing and also have production equipments required for the shoot. With in the production  house they also have different sections like Yashraj Distribution for overseas and home market, Yashraj Music for all their audio sales and Yashraj Video for home video like DVD’s and VCD’s. It was one of the first production houses to hire management students from Indian Institute of Management, Ahmadabad (IIMA) to market their films and also to set up their whole business process. They also stated their own website to market and project their media image  (Dywer Patel- 2002). Professionalization has brought new and better modes of planning. There are changed practices of production where there are professionals working constantly for the better utilization of funds, bringing production costs down and maximizing the profits  Film production in India is becoming an organised business. The overall film industry is taking on professional colours. 1.3  Size and growth opportunities The total size of Indian film industry was estimated at around Rs.56.5bn (inr40 = usd1) WHEN was this?, it is  anticipated to touch a huge figure of about Rs.153bn by the year of 2010 with taking into account 18 percent compound annual growth rate (cagr) as per the estimates of  ficci-Pricewaterhouse- Coopers in the year 2006. On the whole, the Indian film industry was anticipated to be value of about usd1.8bn in the year 2006. On the basis of a thorough top-down analysis considering the share of private consumption as a proportion of gdp, the marketshare for media and entertainment (me) expenditures, and film budgets within the me space it was accounted that the Indian film industry will be valued in between usd4.4 and 5.1bn (between inr176bn and inr204bn) by 2011 (cii-A.T. Kearney 2007). The movie industry has been getting more and more corporatized. Many film production, distribution and exhibition houses are listed on the stock markets and they have raised capital through public issue. Several theatres around the nation have been developed into multiplexes and plans to build up additional digital cinema halls are by now in lime light. This will certainly not only enhance the quality of prints and thereby providing viewing a extra pleasant experience for the audiences but will also decrease the piracy of prints (ficci-PricewaterhouseCoopers 2006). These days piracy is a major issue for the Indian film industry. Not initiating nay major anti-piracy laws on the part of the government and an absence of educated officers that implements anti-piracy laws remains the vital issue. These are the main issue which is why the piracy business has not been able to control to a greater extent. This issue along with the lengthy legal and arbitration process is regarded as prevention to the fight against piracy. Apart from this the present Copyrights Act is also obsolete in conditions to technology enhancement and in addition, it does not deal with the requirements of the electronic media where the degree of piracy is amongst the maximum in present time. The Optical Disc Law draft established to deal with the requirement for regulating piracy at the manufacturing phase is still pending for the approval of the Indian ministry (ficci-PricewaterhouseCoopers 2006). As against to few developed markets where the home market symbolizes greater than 40% of total movie revenues, the home market share in India is comparatively small (8%), though, this share is anticipated to rise to about 14% by the year of 2010. The important pushers that will facilitate this are the rising amount of reasonably priced DVD players and lesser prices of original DVDs so as to battle the issues of piracy (cii-A.T. Kearney 2007). The Indian entertainment and media industry enjoys a lot of aid in the present times – be it regulations that permit foreign investment, the momentum from the economy, digital lifestyle and spending styles of the consumers, and also several opportunities the development in technology have to provide. The industry only has to do is to realize its growth potential and opportunities. The government is required to play a greater dynamic task in solving out the policy-related obstruction for the purpose of growth. The industry is required to get rid of all obstructions, like as piracy in an intensive way along with the measures to produce high-quality global class end products. The entertainment and media industry has all ingredients which it generally takes to turn into the star of Indian economy (ficci-PricewaterhouseCoopers 2006). There are two important movements that will basically transform the scene of the Indian film industry in the coming couple of years, namely digitization and a change in consumer preferences. Digitization will lead to consolidation and appearance of huge scale exhibition networks and, and apart from this, in the balance of power among producers-distributors and exhibitors. Changing customer preferences will lead to rising international acceptance of Indian films and in the upcoming of new media (cii-A.T. Kearney 2007). Growth opportunities in terms of Corporate production houses Indian film industry comprises of numerous regional clusters, and Bollywood is merely one of them. Bollywood is the cluster located in Mumbai, producing the biggest share of films (40%) mainly in Hindi (PWC FICCI, 2007). Bollywood is the oldest film cluster in India, dating back to early 20th century. Other film clusters in India like as one in Hyderabad, called â€Å"Tollywood† produces second biggest amount of films mainly in Telugu. While other clusters produce films chiefly in their local language. Growth opportunities in terms of Indian Film Industry 1.31 Current situation Currently the success ratios of films are very low at the box office. Only 10 to 20% of films break even or earn profits (Ganapathi, 2002; Pendakur, 2003; Ganti, 2004; Lorenzen Taeube, 2006) but most of the producers make money, recouping their investments through new auxiliary sources of revenue () like satellite rights music rights, home video rights(DVD),  video games, toys, computer wallpapers, ring tones, movie clips for mobile and selling ancillary rights. The new trend is product placement in films which brings in a lot of revenue and even helps in publicity of the film. In the period of 1998-2005 i.e after gaining the status of industry, the revenues in the films have grown by 360% this is including all revenues from advertising, selling of ancillary rights and music rights (Kholi- Khandekar, 2006; Lorenzen Taeube, 2006). The digital relay of films in cinema theatres is saving a lot of money as you don’t have to develop the physical print, which took a major share in a film budget.   The industry is losing more than 40% of its revenue through Piracy (David Hancock-1998). Copyright infringement of films is so wide spread in India it can be called as a ‘small scale industry’. Bootleg copies of DVD’s are available in the market on the same day the film officially releases in theatres or some times even before that. Pirated DVD’s and CD’s of Bollywood movies are available in most of the South Asian and South East Asian countries. The small cable television channels broadcast newly released films in their channels without paying any kind of compensation. Another problem is consumer copying which is very difficult to stop. To add on to this is Online Internet movies where consumers can download movies from websites like www.bhejafry.net, www.indiaonlinemovies.com and many more without actually paying anything. The technical skills of the Indian Film Industry has always been extraordinary but most of the time they had to settle for old and very poor quality of equipments.  But now due to huge market and Corporatisation they can afford to buy more sophisticated equipments. Digital facilities for Sound Recording, Dubbing, Editing is as good as anywhere in the world (Dwyer Patel, 2002). Bollywood has always been very enthusiastic about embracing new technologies in their films, and it is also been much quicker in doing this than the Hollywood (Currah, 2007). The Film Industry is using all the latest technologies like Arry 435 for the shoot, Avid and Mac products for post production work. Sync sound, D.I.(Digital Intermediate), Animations and special effects with Graphics are used extensively.  The Indian Film Industry can now even employ foreign technicians to work for them to improve the quality of the final product. In the blockbuster film KRRISH- (2006) the action sequence was choreographed by Tony Ching from Hong Kong and all the special effects for the film was done by Hollywood technicians (Minocha and Stonehouse- 2006). Globalisation has four facets, that is, movement of goods, capital, technology and people across borders. In terms of movement of goods (i. e., movies) Indian movie industry has a long history of presence in the global market. Awara was sent to the Soviet Union and other Communist bloc countries crazy in the year of1950s. Mehboob’s Aan had a French release after its premiere in London. Long before that Himansu Rai made visually stunning films in cooperation with the Germans in the early 1930s, like The Light of Asia and A Throw of Dice, and many more which were shown in Europe as Indian films with Indian stories. By then the Bombay film industry had been around for 35 years. The film industry is definitely as old as the cinema itself and surely older than Hollywood, which has its early development in the late 1900s (Desai 2007). The exports of the Indian movie have grown for approximately 60% in recent times. The USA and Canada are two main export locations witnessing for 30 percent than by the UK with 25% and Mauritius and Dubai with 10% each. Some other main markets comprise South Africa, Russia, Fiji, New Zealand and Australia where there is abundant Indian diasporas present. Making a film for the diaspora market is a certainly a moneymaking project as against to making a film for the Indian domestic market (Desai 2007). With the global audience, there is outstanding recognition of Indian movie themes along with sew of the cross-over films made by global movie production players. The profit earnings of these movies can be match up to to few of the Hollywood box office hits. A number of Bollywood movies have gained greater than 50% of their total gross profit margin from global box office collection. However it is a welcome movement that requires to be carried on. One of the significant success factors for these cinemas is to recognize ideas from within the Indian subjects which are liked by the audience. An additional important success factor is to associate with a top global distributor; films produced by the person of Indian origin have had up to 2–3 times greater global earnings as compared to the national bestsellers (cii- A.T. Kearney 2007). Table 2 reveals a series of cross over films and the revenue earning generated by these films. India has stated its determined plans to double its share in the international film industry by the end of this year. This shows the great determination of the country to build itself as a cultural as well as economic powerhouse. There are many reasons why we must believe that. To begin with, the government, which aims on considering Bollywood to set up India as a ‘soft power’, considers the Indian film industry is competent enough to capture five percent of the international market this season. The share at the present time is two percent (Johnson 2007). Kishore Lulla, the chief executive of Eros International, a uk Trends in Indias Film Industry Trends in Indias Film Industry 1.  Chapter One: Introduction In these modern times of instant digital communication, film has turn out to be one of the most vital way through various nations and cultures reveal their values and identities. Moving image technologies has turn out to be all-encompassing in our lives. They are huge business. Apart from that, a capability to recognize and apply them has become as important for the people of this present era as literacy was in the times of19th and 20th century (India PR Wire, April 4, 2007). The tempo, scale and consequences of this transformation are significant enough. The Indian Film industry has made a huge development ever since the Motion pictures first arrived in India in the year of 1896 when the Lumiere brothers revealed six silent short films in Bombay. The first feature film of India named- King Harishchandra (which was a silent movie) was released in the year of1913. In India the first ‘talkie’ movie that released was Alam Ara in the year 1931 (India PR Wire, April 4, 2007). 1.1  Film Production Houses In India A film production house is normally connected with the in-house production. It could categorize, make or telecast various segments of programs around news, films, multimedia, television shows, sports or ad films. India can be regarded as a home to a several well-known production houses from all the aforesaid stated areas. www.bestindiansites.com specifies top leading Indian websites on production houses of India, sports production house, ad film production house, film production house, sports production house, information on production house, list of production houses, television production house, multimedia production house, and a several other significant information’s (Subramaniam, A, 2003). We can in reality utter about various types of production houses such as Independent and corporate and just detail it by stating that Individual production houses are managed by just 1 or 2 producers and the infusion of capital investment for the production purpose is mainly generated by personal investment or by the means of loans taken from private investor. For corporate houses we could only cite that it is just like as any other corporate deal with the only differentiation that it produces films which is considered under the head of creative segment (essentially organised corporate structure of producing in creative industries – which is a new concept for Indian film industry) (Subramaniam, A, 2003) So when ‘Industry’ status was granted in 2000, Corporate started getting attracted towards the films industry realising the huge potential that was there to be exploited. When the corporate started entering to film industry with huge investment power they started incorporating studio culture of Hollywood by following vertical integration. Leaving behind the prevailing system of horizontal integration to the independent producers. The studio model production house started giving more importance to the content. It stressed on script development, introducing younger generation actors and directors, budget and time management, co productions and international distribution.  None of the new corporate production house had the background of film production when they entered the segment. However most of them were involved in activities related to the media (The Business Line, 2007). Barney says that the first to exploit the resources would gain competitive advantage over its rivals. This is exactly how the corporate production houses gained advantage over independent producers. The Industry had a lot of potential to grow with its wide acceptance globally. but the independent production houses had neglected this aspect, so when the corporate entered the industry they took complete advantage by using the unexploited resources of reach of the films and its growth possibilities steps (Barney, 1991). To exploit the resources of growth prospective, the studio model was developed under these parameters- To Produce and co produce the movies with strong content and story line. To complete the movie with in the budget and also in time. To sign contractual agreements with actors and directors. To focus on medium and large scale budget movies. To develop a huge distribution network nationally and internationally These parameters are not different from any other studio model in the world. Corporate production houses main aim was to apply these practices and standards in other markets, to the Indian market. The reason for doing this was to make maximum utilisation of the resources available. Already registered in the London Stock Exchange, several Indian film companies like as Eros, Ad labs, India Film Company, and utv – have generated immense capital from the various institutional investors who were keen to invest in Indian film companies. Moreover several Western film companies are looking forward for acquiring an ample equity share in these companies (Desai 2007). In this regard on 24 January 2005, Percept Picture Company associated with Michael Douglas’ production company Further Films and Sahara One to co-produce the $50-million Racing the Monsoon. Also on 1 September Sahara declared one more alliance, and this time with a Hollywood producer Donald Rosenfeld for Tree of Life starring Colin Farrell. These are two among a total of six Hollywood coproductions. (Kohli- Khandekar 2006.). On 20 October, 2005, Sony Pictures sign on Sanjay Leela Bhansali to co-produce Saawariya. The film was released globally in the year of 2007 with around 1,000 prints, a figure which was not heard of in the previous times for an Indian film. [The figure is on average 250.] Moreover this was the first time that a renowned Hollywood studio (that one of top six) had produced an Indian film. (Kohli-Khandekar 2006.) Indian admired cinema, remarkably Bollywood – the Mumbai (Bombay) film industry has witnessed several transformations given that it’s first beginnings. A few key modifications that took place at the turn of the century when Indian Popular Cinema gained the position of an industry.(1) After that the Indian film has developed in new directions. One such change was a more intense interplay between the global and the local which took place during the 1990s. Today, every single function and activity related to the Indian film business is becoming well defined and systematized, be it the retail infrastructure, financial aspect, marketing or distribution. Even films themselves are gradually falling into place. In just under five years, the industry has shed five decades of baggage and has become an organised business. This is a new Indian film industry (Kohli-Khandekar 2006). Film producers are interested in creating serious corporate structures, and Indian as well as foreign business is pouring money into the cinema. A wall of money is descending on Bollywood and there is a huge bubble building up (Desai 2007). Evaluating by the amount of movies produced by the Indian film industry, which is about more than one thousand movies per year, it is been regarded as the largest movie industry of the globe. The studio has reached international and also the profit earnings of the several Indian movies were greater in overseas locations than in India. Indian films have been witnessed in the leading ten lists of movies in the continents of UK and USA ((The Business Line, 2007)). 1.2  An overview of Indian film industry 1.2.1  Historical Section How Bollywood has evolved India is been regarded as the biggest movie industry of the world, if we talk about the number of movies produced in a year. It produces around more than 1000 films per year, which is greater than any of the film producing country. The Indian film industry is commonly regarded as BOLLYWOOD. The first Indian cinema was arrived in the year of 1913 with RAJA HARISHCHANDRA firstly coming into the picture and paving its way to the new period of silent cinema in India (Das Gupta, S., 2006). Since that time it has witnessed a vast series of evolution both in conditions of making and marketing of the Indian films.  We will largely talk about the evolution that took place from the year of 1980s to present time. India produces more films than any other country in the world, the government of India didn’t recognize filmmaking as an official industry until as recently as 2001. Before then, it was impossible for producers to get loans from banks or even insurance for their productions. As a result, producers often paid for their films out of their own pockets – a practice most American producers would consider absurdly risky – or obtained financing from less savory sources (Das Gupta, S., 2006): The unruly aspects of film production weren’t just limited to its financing. In some cases, it would take years to shoot a film. Overbooked film stars would show up egregiously late on set (or not at all) without penalty, scripts were often rewritten on set depending on which actors showed up, contracts were verbal and often violated, and produced films had no guarantees of finding distribution. All of these factors combined to make Bollywood film production an extremely risky endeavour (Das Gupta, S., 2006). 1980-1990 In India maximum number of films were produced by Independent (SingleSolo) producers or Family production houses, Big production companies like Rajashri productions, B.R Productions and R.K Productions were family owned production houses  and in some cases it can be traced back to several generations.(Taebue and Lorenzen-2007)   â€Å"In this period the Indian film industry seemed to make the least progress and in some case journey in the path of deprogress† (Ashish Tiwari). Most of the films were produced on a Formula which had protagonist the male lead character of the film who is called as the Hero and his female counter part as the Heroine who romanced with the Hero singing and dancing around the trees, this strategy gave birth to the masala films (Hindi for â€Å"spice mix†) â€Å"It was a compound made up of several elemental combinations that had drama comedy and romance along with song and dance sequences in symbol driven rather than plot driven† ( Lorenzen Taeube-2006). â€Å"The controversial author Salman Rushdie found a very precise and creative term that sums up the subject of Indian films perfectly, describing it as: ‘Epico-Mythico-Tragico-Comico-Super-Sexy-High- Masala-Art’ (Salman Rushdi, 1995 in â€Å"The Moor’s Last Sigh† quoted in Mishra,)à ¢â‚¬ (Adleline Pissang-2000).  Repetition of these kinds of stereotype films kept the audience away from theatres. Introduction of colour television and national coverage by Doordarshan in early 1980’s caused a drop in demand for Indian films. The middle class audience preferred to watch new Television soaps and old films on video cassettes (VHS) in their home rather than going to cinema halls. So the cinema halls became a run down and regarded suitable only for lower class men who could not afford a television preferred watching hard core violent films in theatres with lots of action and skimpily clad women dancing in the rain (Misara-2002). Competition from television made film production houses think innovatively, to hold their grip on the medium, so they started upgrading their films with lavish sets and so called â€Å"multi starrer† films which in turn increased the importance of star actors. So naturally the star actors wanted to cash in on their ‘star value’ and started charging exorbitant sums to act in a single film which in turn escalated the production cost of the film (Gopalan-2002). This was at the same time when the Indian music industry was on a high and could turn around the profit margins of even those films that failed at the box- office. The movie soundtrack became a key publicity stunt for the movies and the number of tracks and their popularity increased steadily. The pre- movie launch of music could determine the fate of a movie because if the music did well in the market then it created a huge wave amongst the public before the film got released. The sales of the audio cassettes used to bring in good share of revenue. The producers always hoped and worked towards making the music of their film a hit by casting good/popular music directors and famous playback singers for their films. Again, the producer had to invest a lot more on a popular music director but it was chance worth taking (Ganti-2004).   1990-2000 The introduction of cable T.V. was the greatest revolution of this era. It changed the outlook of film industry, though initially the survival of film industry was challenged with the entry of cable T.V. as it was an instant hit with the audience because it provided plenty of regional language channels like ZEE TV, SUN network and as well as few English channels STAR, HBO which aired films on their channels. But gradually the production houses understood the potential of the cable T.V. as it found a way for new source of income through selling its film rights at relatively higher prices for its telecast in television which is called as satellite rights (Pendakur-2003). Subsequently the film industry started depending on television as a medium of publicity by broadcasting songs and advertising campaigns of their films to pull the audiences to the theatres (David Hancock-1999). Music channels like MTV and V channel could not sustain by just transmitting private non film and international music albums so they had to take cover of film songs to increase their popularity in India (Bose-2006). It is believed that the criminal sources like underworld had a very strong hold on the Indian film industry; they controlled the whole production process of the films that they financed by dictating the terms in Bollywood like casting a superstar and selecting brilliant directors to work for their films. It is also believed that celebrities of the industry had close links with the mafia. Though usage of Black money (unaccounted money) in films was not an unfamiliar thing for ages but funding from underworld started in this period. It is estimated that 40% of film productions were financed by the underworld (Kripalani and Grover 2002; David Hancock-1998).   The early 1990’s can be called as the period of stagnation; the commercial cinema had ridiculous dialogues, baseless stories with no originality in them (Ashish Tiwari 2007). Few films in mid 1990’s were huge hits which broke most of the previous records. These films were big budget, romantic films (Dwyer and Patel) which upheld the family values in them. The two astronomical hits were HUM APKE HAI KAUN? (Who am I to You?) This released in 1994 and went onto run for two years in more than 50 theatres and DILWALE DULHANIA LE JAYENGE!! (The Brave Heart Will Take the Bride) got released in 1995 and was still running in its 13th year for 679th week as on 17th October 2008 at Marata Mandhir Cinema in Mumbai (www). Both these films were on similar lines, they were big budget romantic films with no actions sequence in them. In the former’s case the whole film was shot in beautiful gigantic sets going outdoors only for song sequence, which had 12 music tracks in it. In latter’s case maximum portion of the shoot took place in foreign locales. The audio of both these films were massive hits because they used the full potential of television by telecasting their songs and ad campaigns before the theatrical release. Both the production houses (Rajashri Productions and Yashraj Productions) of these films took great interest in refurbishing the theatres before the release of their films because they precisely knew their target audience were the upper middle class and family audiences who were content with television and they had to bring them back to the theatres. Once they succeeded â€Å"it marked the dominance of new middle class and uphold them to the pleasure of socially mixed audie nce both in India and overseas†. (Dwyer and Patel-2002) Rajashri and Yashraj Productions were the good old big production houses which started the trend for these kinds of films with big budget, but most of the small scale productions could not cope with this and had to stop producing films. Gradually number of films produced per year dropped. Source: David Hancock; Global Film production (Working Document) Venice Conference The biggest and greatest breakthrough in the Indian Cinema came in 1998. This is the year the Indian government recognised the potential of Indian cinema and granted the official status of ‘Industry’. Until then the public as well as private banks and other big financial institutions desisted from getting involved with the film production companies so the producers always had to depend on private money lenders for the capital for their films (Dwyer Patel, 2002). Now the production houses are getting their capital from public investments through semi public Industrial Development Bank of India (IDBI) and other public banks (Lorenzen Taeube, 2006) 2000- Till date.. Indian Film Industry started in its way of revival of sorts, in 2001 all the prints of the film Chori Chori Chupke Chupke which had a huge star cast was seized by the Central Bureau of Investigation suspecting it to be funded by the underworld and the producer of the film Bharath Shah was arrested for having close connections with the underworld. After this incident most of the producers feared to be identified with the under world. So the underworld gradually lost its hold in the Bollywood. Shooting at overseas location for a film is not new to Bollywood they have been doing this since 1960’s but currently there is an increasing trend of Indian film crew shooting at foreign locales. This is because of the huge global market for the Indian films. Many films are released simultaneously in U.S.A. and U.K.  and there are instances where the returns from overseas collections is higher than the home collections.  The script writers and Directors cannot neglect the overseas market any more while scripting and shooting for their film (Dudrah, R K, 2006). After the liberalisation of the industry in 1998 Direct Foreign Investments, Global Investors, Private Corporate started entering the film industry. Hollywood Majors like Universal, 21st Century Fox started investing in the Indian film industry through joint ventures with the Indian production houses. The corporate production houses are gaining importance in the film industry. Corporate houses like ADLABS, EROS, UTV, K.SERA SERA and many others have already made a mark in B.S.E. (Bombay Stock Exchange) and even in L.S.E. (London Stock Exchange). In the current scenario 20% of the total India films are produced by corporate giants (Anand times- 2006).   They have developed professional ways of organising business, mergers, outsourcing, distributing, use of new technology and marketing content.  The corporate houses have brought in the much needed professional flavour in to films which were missing in the production process earlier. The main advantage of the corporate house is it can produce more number of films simultaneously; it produces 5-6 films per year where as compared to the individual production houses cannot afford to produce more than 2-3 films in a year even after the deregulation. The greatest advantage of a corporate production house is it has a huge capital to invest on its films. Usually the risk is higher on a single movie basis, but the risk spreads out as they produce lot of films simultaneously.  They employ professionals in their firm as compared to the single producers of 80’s who used change their crew after every film. Few corporate houses even have their own multiplex cinema which helps in theatrical release as well as in developing a marketing strategy for their films. The corporate giants are investing hugely on the industry as a result of this the film Industry is already the 3rd largest industry in India (Dudrah-2006). The production houses are aiming at a homogenous or serial form of production as opposed to heterogeneous form of production they had earlier. The main purpose of switching to this form of production is to control all means of production and operate all aspects of film making from finance to production and distribution (Prasad-1998). The best example being Yashraj Productions. They have their own studios for recording, dubbing and editing and also have production equipments required for the shoot. With in the production  house they also have different sections like Yashraj Distribution for overseas and home market, Yashraj Music for all their audio sales and Yashraj Video for home video like DVD’s and VCD’s. It was one of the first production houses to hire management students from Indian Institute of Management, Ahmadabad (IIMA) to market their films and also to set up their whole business process. They also stated their own website to market and project their media image  (Dywer Patel- 2002). Professionalization has brought new and better modes of planning. There are changed practices of production where there are professionals working constantly for the better utilization of funds, bringing production costs down and maximizing the profits  Film production in India is becoming an organised business. The overall film industry is taking on professional colours. 1.3  Size and growth opportunities The total size of Indian film industry was estimated at around Rs.56.5bn (inr40 = usd1) WHEN was this?, it is  anticipated to touch a huge figure of about Rs.153bn by the year of 2010 with taking into account 18 percent compound annual growth rate (cagr) as per the estimates of  ficci-Pricewaterhouse- Coopers in the year 2006. On the whole, the Indian film industry was anticipated to be value of about usd1.8bn in the year 2006. On the basis of a thorough top-down analysis considering the share of private consumption as a proportion of gdp, the marketshare for media and entertainment (me) expenditures, and film budgets within the me space it was accounted that the Indian film industry will be valued in between usd4.4 and 5.1bn (between inr176bn and inr204bn) by 2011 (cii-A.T. Kearney 2007). The movie industry has been getting more and more corporatized. Many film production, distribution and exhibition houses are listed on the stock markets and they have raised capital through public issue. Several theatres around the nation have been developed into multiplexes and plans to build up additional digital cinema halls are by now in lime light. This will certainly not only enhance the quality of prints and thereby providing viewing a extra pleasant experience for the audiences but will also decrease the piracy of prints (ficci-PricewaterhouseCoopers 2006). These days piracy is a major issue for the Indian film industry. Not initiating nay major anti-piracy laws on the part of the government and an absence of educated officers that implements anti-piracy laws remains the vital issue. These are the main issue which is why the piracy business has not been able to control to a greater extent. This issue along with the lengthy legal and arbitration process is regarded as prevention to the fight against piracy. Apart from this the present Copyrights Act is also obsolete in conditions to technology enhancement and in addition, it does not deal with the requirements of the electronic media where the degree of piracy is amongst the maximum in present time. The Optical Disc Law draft established to deal with the requirement for regulating piracy at the manufacturing phase is still pending for the approval of the Indian ministry (ficci-PricewaterhouseCoopers 2006). As against to few developed markets where the home market symbolizes greater than 40% of total movie revenues, the home market share in India is comparatively small (8%), though, this share is anticipated to rise to about 14% by the year of 2010. The important pushers that will facilitate this are the rising amount of reasonably priced DVD players and lesser prices of original DVDs so as to battle the issues of piracy (cii-A.T. Kearney 2007). The Indian entertainment and media industry enjoys a lot of aid in the present times – be it regulations that permit foreign investment, the momentum from the economy, digital lifestyle and spending styles of the consumers, and also several opportunities the development in technology have to provide. The industry only has to do is to realize its growth potential and opportunities. The government is required to play a greater dynamic task in solving out the policy-related obstruction for the purpose of growth. The industry is required to get rid of all obstructions, like as piracy in an intensive way along with the measures to produce high-quality global class end products. The entertainment and media industry has all ingredients which it generally takes to turn into the star of Indian economy (ficci-PricewaterhouseCoopers 2006). There are two important movements that will basically transform the scene of the Indian film industry in the coming couple of years, namely digitization and a change in consumer preferences. Digitization will lead to consolidation and appearance of huge scale exhibition networks and, and apart from this, in the balance of power among producers-distributors and exhibitors. Changing customer preferences will lead to rising international acceptance of Indian films and in the upcoming of new media (cii-A.T. Kearney 2007). Growth opportunities in terms of Corporate production houses Indian film industry comprises of numerous regional clusters, and Bollywood is merely one of them. Bollywood is the cluster located in Mumbai, producing the biggest share of films (40%) mainly in Hindi (PWC FICCI, 2007). Bollywood is the oldest film cluster in India, dating back to early 20th century. Other film clusters in India like as one in Hyderabad, called â€Å"Tollywood† produces second biggest amount of films mainly in Telugu. While other clusters produce films chiefly in their local language. Growth opportunities in terms of Indian Film Industry 1.31 Current situation Currently the success ratios of films are very low at the box office. Only 10 to 20% of films break even or earn profits (Ganapathi, 2002; Pendakur, 2003; Ganti, 2004; Lorenzen Taeube, 2006) but most of the producers make money, recouping their investments through new auxiliary sources of revenue () like satellite rights music rights, home video rights(DVD),  video games, toys, computer wallpapers, ring tones, movie clips for mobile and selling ancillary rights. The new trend is product placement in films which brings in a lot of revenue and even helps in publicity of the film. In the period of 1998-2005 i.e after gaining the status of industry, the revenues in the films have grown by 360% this is including all revenues from advertising, selling of ancillary rights and music rights (Kholi- Khandekar, 2006; Lorenzen Taeube, 2006). The digital relay of films in cinema theatres is saving a lot of money as you don’t have to develop the physical print, which took a major share in a film budget.   The industry is losing more than 40% of its revenue through Piracy (David Hancock-1998). Copyright infringement of films is so wide spread in India it can be called as a ‘small scale industry’. Bootleg copies of DVD’s are available in the market on the same day the film officially releases in theatres or some times even before that. Pirated DVD’s and CD’s of Bollywood movies are available in most of the South Asian and South East Asian countries. The small cable television channels broadcast newly released films in their channels without paying any kind of compensation. Another problem is consumer copying which is very difficult to stop. To add on to this is Online Internet movies where consumers can download movies from websites like www.bhejafry.net, www.indiaonlinemovies.com and many more without actually paying anything. The technical skills of the Indian Film Industry has always been extraordinary but most of the time they had to settle for old and very poor quality of equipments.  But now due to huge market and Corporatisation they can afford to buy more sophisticated equipments. Digital facilities for Sound Recording, Dubbing, Editing is as good as anywhere in the world (Dwyer Patel, 2002). Bollywood has always been very enthusiastic about embracing new technologies in their films, and it is also been much quicker in doing this than the Hollywood (Currah, 2007). The Film Industry is using all the latest technologies like Arry 435 for the shoot, Avid and Mac products for post production work. Sync sound, D.I.(Digital Intermediate), Animations and special effects with Graphics are used extensively.  The Indian Film Industry can now even employ foreign technicians to work for them to improve the quality of the final product. In the blockbuster film KRRISH- (2006) the action sequence was choreographed by Tony Ching from Hong Kong and all the special effects for the film was done by Hollywood technicians (Minocha and Stonehouse- 2006). Globalisation has four facets, that is, movement of goods, capital, technology and people across borders. In terms of movement of goods (i. e., movies) Indian movie industry has a long history of presence in the global market. Awara was sent to the Soviet Union and other Communist bloc countries crazy in the year of1950s. Mehboob’s Aan had a French release after its premiere in London. Long before that Himansu Rai made visually stunning films in cooperation with the Germans in the early 1930s, like The Light of Asia and A Throw of Dice, and many more which were shown in Europe as Indian films with Indian stories. By then the Bombay film industry had been around for 35 years. The film industry is definitely as old as the cinema itself and surely older than Hollywood, which has its early development in the late 1900s (Desai 2007). The exports of the Indian movie have grown for approximately 60% in recent times. The USA and Canada are two main export locations witnessing for 30 percent than by the UK with 25% and Mauritius and Dubai with 10% each. Some other main markets comprise South Africa, Russia, Fiji, New Zealand and Australia where there is abundant Indian diasporas present. Making a film for the diaspora market is a certainly a moneymaking project as against to making a film for the Indian domestic market (Desai 2007). With the global audience, there is outstanding recognition of Indian movie themes along with sew of the cross-over films made by global movie production players. The profit earnings of these movies can be match up to to few of the Hollywood box office hits. A number of Bollywood movies have gained greater than 50% of their total gross profit margin from global box office collection. However it is a welcome movement that requires to be carried on. One of the significant success factors for these cinemas is to recognize ideas from within the Indian subjects which are liked by the audience. An additional important success factor is to associate with a top global distributor; films produced by the person of Indian origin have had up to 2–3 times greater global earnings as compared to the national bestsellers (cii- A.T. Kearney 2007). Table 2 reveals a series of cross over films and the revenue earning generated by these films. India has stated its determined plans to double its share in the international film industry by the end of this year. This shows the great determination of the country to build itself as a cultural as well as economic powerhouse. There are many reasons why we must believe that. To begin with, the government, which aims on considering Bollywood to set up India as a ‘soft power’, considers the Indian film industry is competent enough to capture five percent of the international market this season. The share at the present time is two percent (Johnson 2007). Kishore Lulla, the chief executive of Eros International, a uk

damnation :: essays research papers

Ruining The Grand Places â€Å"†¦ It is apparent, then, that we cannot decide the question of development versus preservation by a simple referral to holy writ or an attempt to guess the intention of the founding fathers; we must make up our own minds and decide for ourselves what the national parks should be and what purpose they should serve.†-Edward Abbey, Desert Solitaire â€Å"†¦ The difference between the present reservoir, with its silent sterile shores and debris-choked side canyons, and the original Glen Canyon, is the difference between death and life. Glen Canyon was alive. Lake Powell is a graveyard.† – Edward Abbey, â€Å"The Damnation of a Canyon†, Beyond the Wall When you love the Desert Southwest, sometime, somewhere, you will stumble into the writings of Ed Abbey. Like me, Ed was not born there; he discovered his love of the place while riding a boxcar through it on a trip across the US; I discovered mine on a trip through myself. His writings helped lead me home, for that is what the desert southwest is to me: home. I don’t live there for one simple reason, i.e., I have not yet been able to put myself in the financial situation I need to be in. For now, I visit when I can, mostly during my long vacations at Christmas. A couple of years ago during one of those, on a whim after spending a few days in Arches National Park, my wife and I detoured to the snowy, icy south rim of the Grand Canyon. We journeyed toward it from the east side but got turned back at the National Parks’ gate; the road was snowed under from there on up. After retracing our steps, we traveled down to Flagstaff and spent the night, driving in my four by four truck up to the South Rim the next day. It was an eerie experience to stand on the edge of the South Rim and see only cloud; fog shrouded the canyon’s great gap, leaving us with visual doubts that anything was really there. Defeated, we hit the Visitor’s Center and gathered information so we could go back sometime in the spring or fall with weather more to our liking. We haven’t done that, yet. This year we had planned to take a guided river run down the great Grand Canyon. Right now, that probably is not going to happen, either, due to other family obligations that eat vacation and other financial priorities.

Marketing to Generation Y Essay

On May 12, 1999, Matt Diamond, James Johnson and Sam Gradess were visiting San Francisco for a last round of meetings with West Coast investment analysts. They were just days from the initial public offering (IPO) of shares in Alloy.com, the catalog and Internet merchant of teenoriented clothing that they had founded on Diamond’s graduation from Harvard Business School in 1996. Snarled in freeway gridlock, Diamond was on his cellphone discussing the IPO’s pricing with analysts back in New York City. An analyst urged Diamond to respond to an invitation by the world’s largest Website and portal, America Online (AOL), to make Alloy an anchor tenant on its teen shopping site. AOL wanted $2 million per year for the rights. â€Å"Matt, if you say yes, that will be big. If you announce tomorrow that AOL’s partner in the Generation Y market is Alloy, it will put Alloy on the map. It will definitely affect the IPO price.† Diamond sighed. A headline deal with AOL today could be worth perhaps 10% on the stock price. But AOL was asking rich terms. It was widely rumored that AOL preyed on startup companies in the weeks before they went public, tempting them with star billing on its portal at the very moment when the publicity was most valuable. He estimated that he’d be paying a $45 cpm (cost per thousand exposures) to anchor the AOL teen shopping site. Nobody paid more than $30 for Web eyeballs. In the three years that he had been running Alloy, Diamond had prided himself on doing deals that made sense. If he could not anticipate a profit to Alloy from a promotional deal, he reasoned that Wall Street would not anticipate a profit either. â€Å"It won’t pay out,† he told the analyst firmly. â€Å"We only do deals that produce value.† To his colleagues in the limousine, he wondered out loud, â€Å"Am I right?† Professor John Deighton and Visiting Scholar Gil McWilliams prepared this case as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. The contribution of Ann Leamon, Manager, Center for Case Development, is gratefully acknowledged. Certain sensitive information in this case has been disguised and should not be regarded as informative as to the prospects of the company. Copyright  © 2000 by the President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School. 1 Downloaded by Junfei Xu on 9/02/2013. New York University, Stephen Tamke, Fall 2013, 001-003 500-048 Alloy.com: Marketing to Generation Y The Generation Y Market Termed the â€Å"hottest demographic of the moment,† Generation Y came to the attention of marketers in the late 1990s. This â€Å"echo of the baby boom† was made up of children and teenagers born in the United States between 1975 and 1989 and therefore aged between 10 and 24. They were estimated to be a 56 million strong group of actual and potential consumers, some three times the size of their immediate predecessor, Generation X.1 The U.S. Census Bureau projected that the 10 to 24 age group would grow from 56.3 million to 63.1 million by 2010, growing faster than the general population. Although Generation Y matched its parent’s generation in size, in almost every other way it was very different. One in three was not Caucasian. One in four lived in a single-parent household. Three in four had working mothers.2 â€Å"Body glittered, tattooed, pierced, they’re a highly fragmented,  unpredictable group of teenagers who, while tottering around on five inch soles, voice conservative opinions about sexuality, government, the American dream and an end-of-century commitment to spirituality.† 3 They were computer literate: 81% of teens used the Internet, according to Chicagobased Teenage Research International (TRI), which also noted that over a 3 month period on AOL, they posted more than 2 million Leonardo Di Caprio related messages.4 According to Lester Rand, Director of the Rand Youth Poll, they had money to spend and an appetite for spending it. They have a higher incremental allowance from their parents, and with the growth in our service economy, they are able to secure jobs easily and at rising minimum wages. They’re exposed to so many different products on TV, in the mall and through their friends. It’s a generation who grew up with excess as a norm.5 In 1999 Jupiter reported that 67% of on-line teens and 37% of on-line kids said they made use of on-line shopping sites, either buying or gathering information about products. 6 Generation Y was expected to spend approximately $136 billion in 1999, before accounting for the group’s influence on purchases made by parents and other adults. (See Exhibits 1 and 2 for this and other estimates.) On-line Competition for Generation Y Spending Generation Y’s size and spending power had not gone unnoticed. Many conventional and on-line retailers courted them. Alloy viewed its most significant competitors as dELiAs and the online magalog mXg. The neighborhood mall was also a threat. 1 Neuborne, Ellen and Kathleen Kerwin. â€Å"Generation Y,† Business Week, February 15, 1999, Cover story. 2 Neuborne, Ellen and Kathleen Kerwin. â€Å"Generation Y,† Business Week, February 15, 1999, Cover story. 3 O’Leary, Noreen. â€Å"Marketing: The Boom Tube,† Adweek, Vol. 39, No. 20, May 18, 1999, pp. S44-S52. 4 Brown, Eryn. â€Å"Loving Leo Online,† Fortune, April 12, 1999, p. 152. 5 BAXExpress, July/August 1999, http:baxworld.com/baxexpress/0799/consumers.html. 6 Sacharow, Anya. â€Å"Shadow of On-line Commerce Falls on Postmodern Kids,† Jupiter Communications report, June 7, 1999. 2 Downloaded by Junfei Xu on 9/02/2013. New York University, Stephen Tamke, Fall 2013, 001-003 Alloy.com: Marketing to Generation Y 500-048 dELiAs Inc.7 The largest on-line and catalog merchant serving Generation Y was New York-based dELiAs, with 1998 sales of $158 million. Founded in 1995 by two 33-year-old former Yale rooommates, Stephen Kahn and Christopher Edgar, dELiAs sold through print catalogs mailed to more than 10 million recipients, of whom 6 million had bought within the past year. It managed its own order fulfillment from a warehouse complex, and operated twenty conventional retail stores. Most of dELiAs’ 1,500 employees were under 30. Its phone representatives were often high school and college students, and they frequently offered fashion advice as well as taking orders. In November 1998 dELiAs Inc. paid $4.75 million for the trademarks and mailing lists of bankrupt Fulcrum’s 5 catalogs (Zoe for teenage girls, Storybook Heirlooms, Playclothes, After the Stork, and Just for Kids), giving them 5 million names which nearly doubled their database. It also paid $2.4 million for merchandise from Zoe and Storybook. By 1999, dELiAs went to market with a complex set of brands and marketing methods: Ø Ø Ø Ø Ø The dELiAs brand marketed to teenage girls as a catalog through the mail and as dELiAs*cOm on the Web.  The gURL.com Website was an on-line magazine for girls and young women, carrying articles as well as free e-mail, free homepage hosting and publishing tools, and links to a network of third-party sites for girls and women. gURL was the only property that was not engaged in commerce. The droog brand marketed apparel to 12-to 20-year-old males through the mail and on-line. The TSI Soccer catalog sold soccer gear by mail and on-line. Storybook Heirlooms retailed apparel and accessories for girls under 13 by mail and Web catalog. Ø Dotdotdash sold apparel, footwear and accessories for girls aged 7 to 12 by mail and Web catalog. Ø Discountdomain.com was a subscription Website selling discounted close-out merchandise. Ø Contentsonline.com offered unusual home furnishings, light furniture and household articles to females aged 13-24. While predominantly a Web catalog, the property appeared intermittently as a print insert in dELiAs’ print catalog. In April 1999, dELiAs Inc. spun off its Internet properties in an IPO, selling shares in a company called iTurF which earned revenues from all of the above on-line elements. In terms of the deal, these on-line businesses could advertise in dELiAs’ print catalogs at a rate of $40 per 1,000  catalogs. The dELiAs catalog, 60 million of which were printed in 1998, had the largest domestic circulation of any publication directed at Generation Y. The on-line magazines also shared the parent company’s 354,000 square foot distribution center in Hanover, PA. Because iTurF did not take ownership of inventory until a customer’s order was placed, the risk of obsolescence and markdowns remained with the parent company. iTurF shared offices with the parent company, enjoying a submarket rent for New York metropolitan space. 7 Information drawn from company website: www.dELiAs.com 3 Downloaded by Junfei Xu on 9/02/2013. New York University, Stephen Tamke, Fall 2013, 001-003 500-048 Alloy.com: Marketing to Generation Y In May 1999, iTurF announced record quarterly sales of $2.6 million (up from $0.69 million in the first quarter of 1998). Gross profit was $1.3 million, or 49.1% of revenues, up from $0.34 million or 49.3% of revenues 1998 (see Exhibit 3). However, dELiAs reported that it expected its iTurF unit to report a loss for the fiscal year. By April 1999, the number of people who had ever bought at the iTurF Websites was 66,000 (up from 35,000 at the end of December 1998), and the number of unique visitors was 731,000 in April 1999 alone. Analysts estimated that each customer cost $26 to acquire.8 Private label merchandise accounted for 40% of iTurF’s sales, in line with dELiA’s ratio. iTurf entered into agreements with RocketCash Corp and DoughNET, companies that had been established to let parents control the on-line spending of their children. For example, RocketCash let parents establish a credit card account and set each child’s access to specific merchant sites, times of operation, and the option to set up an auto-allowance to periodically replenish the account. DoughNet was a virtual  debit card that parents could set up for their children. Parents could customize DoughNET’s site to guide teens through all aspects of managing their money. In April 1999, dELiAs’ decision to spin off iTurF seemed shrewd. The market capitalization of dELiAs Inc. was $90 million, on sales of $200 million annually. ITurF was capitalized at $200 million on a sales run rate of $12 million annually. mXg Media Inc.9 Hunter Heaney and Stuart MacFarlane graduated from the Harvard Business School in 1996. MacFarlane joined Bain & Co. and Heaney joined BancBoston Robertson Stephens. Heaney told how he got the idea for mXg while Christmas shopping at Nordstrom’s for his then girlfriend. A saleswoman had told him that the â€Å"Y† necklace featured on the â€Å"Friends† sitcom was in style. â€Å"I knew there had to be a more direct way to find out about fashion trends influenced by entertainment,† Heaney said.10 In 1997, Heaney and MacFarlane quit their jobs and moved to Manhattan Beach, CA, to be close to Hollywood and surfers and skaters. Using the pay phone while staying at a local motel they raised $250,000 in increments of $5,000, and launched mXg, styling it a â€Å"magalog,† a hybrid of catalog and magazine, aimed at teenage girls. Unlike a conventional magazine, mXg reported exactly where to go to buy the fashion items that it featured on its pages. MacFarlane recalled their early lean times: â€Å"Typically, retailers order inventory in sixes (one small, two medium, two large, one extra large). But instead of saying ‘We’ll take 2,000 sixes’ we said ‘We’ll take six’ – literally one of each.† They could fund a circulation of only 20,000 for the magazine’s launch in the fall of 1997, but it did well. Some 5% of the recipients bought from it. The numbers were good enough to induce Urban Outfitters, a retail fashion chain, to invest $5 million for 40% of the company, incorporated as mXg Media, Inc. Merchandise doubling each issue. each, refunded with B Dalton Booksellers. accounted for most of mXg Media’s revenues, but advertising revenue was The company used newsstand distribution (150,000 issues per quarter at $2.95 a purchase), as well as distribution in bookstores like Barnes & Noble, and The magazine had a pass-along rate of almost six readers per copy. Sensitive to the tastes of their target audience of female teenagers, they hired teens, paying them $7 per hour to work after school answering letters, doing interviews, and writing copy to make 8 CIBC World Markets, Equity Research, June 2, 1999. 9 Information drawn from company website: www.mXgonline.com 10 Waxler, Caroline. â€Å"Guys with moxie,† Forbes, May 31, 1999, pp. 130-131. 4 Downloaded by Junfei Xu on 9/02/2013. New York University, Stephen Tamke, Fall 2013, 001-003 Alloy.com: Marketing to Generation Y 500-048 it sound authentic. â€Å"No printed word goes out without a teen girl checking it †¦ being uncool is the kiss of death in this business.†11 At the start of each fashion season mXg recruited 30 â€Å"Moxie girls† to spend a hypothetical $150 each. Their virtual purchases determined which items appeared in the next issue. The magazine paid staffers to model clothes and invited would-be teen celebrities to pose free to gain recognition. A Website, mXgonline.com, was established in the summer of 1997. It comprised a magazine, chat rooms, and community sites, and sold clothes and accessories. mXg Media pursued other access points for their on-line magalog, featuring it in on-line fashion malls such as fashionwindow.com. In 1999, mXg sponsored concerts featuring acts like Gus Gus which were favored  by Generation Y. Yahoo produced a series of Webcasts of the concerts for teens. The company described its mission as cross-media publishing, targeted exclusively at teen girls. It planned to add mXgtv, an Internet video site, to its media portfolio later in the year. A Crowded Marketplace? Other companies vied for the attention of Generation Y. Bolt.com was a content-based magazine-type site skewed towards a market slightly older than that of the Generation Y market, but into which the older end of the Y market might eventually fall. Bolt.com included sections titled jobs, money, movie reviews, music, news and issues, sex and dating, and sports. It had a chat room and free e-mail, and sold branded merchandise. It boasted that 5,000 people joined it every day. The magazine Seventeen had an on-line version, offering chat rooms and message boards, as well as its regular articles, quizzes and features. Indeed many magazines were now launching online versions of their magazines, and new print publications like Twist and Jump had appeared to compete for generation Y advertising revenues. Broader on-line retailers served this market, such as bluefly.com selling discounted brands on-line. Strong competition came from mall-based stores such as The Buckle, Gadzooks, Abercrombie & Fitch, The Gap, American Eagle Outfitters, and Guess, all of whom sold merchandise on- and off-line. Apparel and sportswear manufacturers were developing on-line sales sites. Nike and Tommy Hilfiger planned to launch e-commerce sites with broad product offerings. Alloy.com As a Harvard MBA student in 1996, Matt Diamond wrote a business plan proposing the idea of marketing ‘extreme sports’ clothing by catalog to young people in Japan. The premise was that the popularity of this style of clothing among American youth might generate demand abroad, and that catalogs would be able to tap that demand faster than would store distribution. On graduation, Diamond implemented the plan. He and a friend, Jim Johnson, used seed money from friends and family to design and print a Japanese-language catalog, which they branded Durango Expedition. They  mailed it in January 1997, and at the same time they went live with Japanese and English Websites, as alternative channels. The venture flopped. The mailing generated no significant sales. However, they discovered to their surprise that they were receiving hits on the English Website from American youths. Within a month they had reconceptualized the business to serve American teen girls through catalog and online channels, under the name Alloy. Diamond and Johnson each contributed $60,000 in cash and 11 Waxler, Caroline. â€Å"Guys with moxie,† Forbes, May 31, 1999, pp. 130-131. 5 Downloaded by Junfei Xu on 9/02/2013. New York University, Stephen Tamke, Fall 2013, 001-003 500-048 Alloy.com: Marketing to Generation Y another friend, Sam Gradess added $150,000 in cash when he joined six months later from Goldman Sachs. In November 1997, the first issue of the Alloy catalog, 48 pages in length, was mailed to a purchased mailing list of 150,000 teen names. At the same time Alloy’s Website became active. The intention at that time was to reduce the number of catalogs mailed as on-line sales grew. Organization Diamond became president and CEO of the fledgling company. Johnson took the title of chief operating officer. Gradess was chief financial officer. Neil Vogel joined from Ladenburg Thalman & Co., a consumer and Internet investment banking group to be the chief corporate development officer. Fellow Harvard sectionmate, Andrew Roberts left PricewaterhouseCoopers to join Alloy in January 1999 as VP of business development. Another Harvard  MBA, Joan Rosenstock was hired as marketing director, having held positions in marketing at the National Basketball Association as well as in advertising account management. Erstwhile, music editor of teenage magazine Seventeen, Susan Kaplow, became executive editor and Karen Ngo, who had been a feature editor and fashion stylist at Seventeen, was hired as creative director. Alloy outsourced as many of its operations as it could. Working with mostly domestic vendors who could produce and ship within a 2-8 week timeframe, Alloy purchased only 50% of its featured products and relied on a quick order and re-order ability so as to control inventory levels. Telephone orders and order-processing were outsourced to Harrison Fulfillment Services, based in Chattanooga, TN. OneSoft Corp., based in Virginia, handled on-line ordering and fed its orders to Chattanooga for fulfillment. Alloy personnel concentrated on marketing and merchandising issues. Target Market Unlike dELiAs, Alloy opted for a single-brand strategy targeted at both genders. â€Å"Rather than dividing our marketing resources across multiple brands and Websites, we seek to maximize the impact of our marketing efforts by promoting a single brand. We believe this allows us to attract visitors to our Website and build customer loyalty rapidly and efficiently.†12 Indeed Diamond considered that Alloy’s key differentiator lay in being gender neutral, believing that a successful Generation Y community depended on dynamic boy-girl interaction. He thought of their community site as an MTV-like interactive distribution channel. â€Å"It’s an opportunity for girls to talk to boys, boys to talk to girls, to deliver music, to deliver fashion, to deliver lifestyle.† Diamond conceded that the majority of the visitors to its Website were girls, and the print catalog was even more skewed towards girls. However, it was the intention to attract boys to the Website by other means. There was some evidence that this strategy was working, as the percentage of female Website visitors declined from 70% in early 199913 towards a desired 60/40 ratio. Boys tended to be drawn by music, extreme sports and games, while girls appeared to be more responsive to chat and browsing. Diamond felt, however, that just as both teen boys and girls hang out in shopping malls, watching each other as well as chatting, the on-line  presence of both boys and girls was important. Alloy’s target was teens making buying decisions with parents â€Å"somewhere in the background.† The target group ranged from 12-20, but the median age was 15. Alloy was careful not to aim too young, partly for regulatory reasons, but also because they felt that by targeting 15-yearolds they reached a group at an important buying point in their lives. About 35-40% of teenage purchasing was on apparel and accessories, and Alloy monitored what else this group bought. As 12 IPO Offer Document May 1999. 13 Chervitz, Darren. â€Å"IPO First Words: Alloy Online CEO Matt Diamond.† Interview at CBS MarketWatch.com, June 14, 1999. http://cbs.marketwatch.com/archive/19990614/news/current/ipo_word.htx?source=htx/http2_mw&dist=na 6 Downloaded by Junfei Xu on 9/02/2013. New York University, Stephen Tamke, Fall 2013, 001-003 Alloy.com: Marketing to Generation Y 500-048 owners of a â€Å"piece of real estate† they did not see themselves as limited to selling apparel and accessories, and had moved into soft furnishings. The Offering It was standard practice among catalog retailers, such as Lands End and LL Bean, to sell products under the catalog’s brand. Even at dELiAs, private-label sales accounted for about 40% of the mix. Alloy, however, emphasized recognized teen brands such as Vans, Diesel, and O’Neill, both to attract buyers and to offer reassurance of quality. Only 20-25% of Alloy’s sales came from labels that were exclusive to Alloy, such as Stationwagon and Local 212. Diamond was philosophical about the pros and cons of private label, â€Å"There’s no denying you get better margins on own-label goods. But  running with your own labels leaves you vulnerable to ending up as a skateboard brand.† The Alloy site aimed to build what Diamond termed the 3 Cs of on-line retailing to this generation: Community, Content, and Commerce. He noted that constant communication was key to understanding this generation. They had a strong need to chat about movies, television, music and what was happening at school, and to seek advice from one another, sound off about pet hates, and occasionally shop. A small team of in-house editors created editorial content on the site, supplemented by syndicated content. The audience also contributed content, receiving in exchange a sense of community, in chat-rooms and message boards, and by submitting their own letters, poems, drawings and articles. Poems and drawings would be voted upon interactively. Chat rooms in particular were popular and frequently full (in contrast to some of the chat rooms of competitors). The chat rooms were moderated from end of school-time until midnight on a daily basis, with software employed to spot offensive or obscene language. Advice columns were a dependable magnet. (See Exhibit 7 for a sample of user-generated content.) Andrew Roberts remembered vividly the moment when he knew that Alloy was really â€Å"onto something.† In the aftermath of the Columbine High School shooting tragedy, one of the editors knew that Alloy had to respond and fast. She worked all night creating the appropriate spaces in chatrooms, and editorial content. By 8:30 a.m. the day after, 15 hours after news of the tragedy broke, Alloy had received 7,311 postings related to the events at Columbine. Roberts explained that it wasn’t so much the number that impressed him, but the content of the postings. â€Å"These kids were really anxious. We had kids who followed the goth fashion who were really scared about how others would treat them. Other kids were reassuring them and saying â€Å"Don’t worry, we know it wasn’t you or the goths who made these guys do what they did.† They just had a desperate need to talk with each other, and be reassured by each other.† Building the Brand Alloy built its brand, and with it traffic to the Alloy site, in several ways. It undertook traditional advertising in print media (Seventeen Magazine, YM, Rolling Stone, and Snowboarder). It used hot-links from sites  such as seventeen.com to advertise promotional deals. It had special copromotional deals with, for example, MGM Entertainment, Sony Music, Burton Snowboards, MCI and EarthLink/Sprint, who provided free products and services that were used as special promotions for the Alloy community (such as private movie screenings, exclusive music give-aways, and celebrity on-line chats). Finally, it bought banner advertising on gateway sites such as Yahoo Shopping, Fashionmall.com, CatalogCity.com and CatalogLink.com. 7 Downloaded by Junfei Xu on 9/02/2013. New York University, Stephen Tamke, Fall 2013, 001-003 500-048 Alloy.com: Marketing to Generation Y The Business Model There were two revenue streams: merchandise sales, and advertising and sponsorship. An agent had been retained to sell advertising on the Website, and the longer-term intention was to build an in-house sales force to sell sponsorships, banner-ads, targeted advertising (segmented by Website area, time of day, user location, or age), and combination print and Website advertising. To this end, Samantha Skey, who had been responsible for commerce, advertising and sponsorship for Disney Online and Family.com and had worked for Buena Vista Internet group, was hired in 1999 as VP of ecommerce and sponsorships. In 1999, about 10% of revenues were generated by sponsorship and advertising deals, and the proportion was expected to rise to 20% in year 2000. Alloy was aware that it would never meet all of its customers’ requirements. It was happy to offer links to other sites that could be seen as competitive, such as Gap’s on-line site. â€Å"Look, we figure they’re going to go there anyway,† noted Roberts. â€Å"If they go via us, we at least get something for it. We’re happy to have such complementary deals. Probably not with dELiAs, though,† he grinned. Exhibits 4 and 5 report annual fiscal year performance 1996-1998, and quarterly performance between last quarter 1997 and first quarter 1999. To hear Diamond describe it, running Alloy was, at least day-to-day, like running a production plant. â€Å"We know what it costs to get a customer, and we know what a customer will spend. We just have to keep the two numbers in balance. We could make a profit today, but in this investment climate there’s no reward for beating your loss numbers.† By April 1999, Alloy had a database of 2.6 million names and addresses, comprising 1.7 million previous buyers and 900,000 visitors to the Website who had registered their names and addresses. It was mailing monthly to the most responsive of the names on this list, supplemented by purchases of new names, and it hoped to mail 20 million catalogs over the course of 1999. Alloy’s catalogs cost $450 per thousand to design, print and mail. If Alloy mailed catalogs to names from the database who had bought from it before, it received an order from about 3% of the names each time it mailed. If Alloy bought a list of new names, for example a list of American girls who owned personal computers, at a cost that was typically $100 per thousand names, the response rate on the new names14 was about 1.5%. Alloy would often exchange some of the names of its customers for the names of customers of similar firms, if it could count on a response rate on the swapped names of close to its own 3%. By blending names from these three sources, Alloy could choose whether a particular mailing would yield a high rate of orders or expand its customer base. Over the year, Alloy’s mailings comprised 10% swapped names, 70% past customers and 20% new names. Diamond found that some people in the private investment community were not well informed on the ease with which response rates could be manipulated. â€Å"Analysts ask me, why is your response rate down last month? I say ‘you want a 10% response rate, I’ll give you one. I’ll just mail to my very best customers.† Most orders were received by telephone, and orders from all lists ranged from $65 per customer in spring to $85 in winter. The gross margin on an order was about 50%. Alloy paid its fulfillment company $6.00 to handle each telephone order. Customers paid the shipping charges. Traffic to the Website, as measured by Media Metrix in the quarter ending March 1999, comprised 263,000 unique visitors15 per month. While about half of the  visitors eventually registered 14 List brokers typically sold names on a ‘deduplicated’ basis, meaning that the buyer had the right to delete and not pay for any names that it already owned. 15 Many of the visitors to a site came more than once a month. Media Metrix used the term â€Å"unique visitors† to emphasize that they were counting visitors, not visits. 8 Downloaded by Junfei Xu on 9/02/2013. New York University, Stephen Tamke, Fall 2013, 001-003 Alloy.com: Marketing to Generation Y 500-048 themselves with the site by entering a name, address and e-mail information, the proportion of unique visitors in a month who registered in that month was about 8%. In addition to catalogs and Web visits, Alloy interacted with Generation Y by means of a weekly broadcast e-mail, Alloy E-Zine, sent to 850,000 site visitors who had asked to receive it. When a visitor to the Alloy Website registered, the name was added to the print catalog mailing list. Names gathered in this way, although they had not previously bought from Alloy, tended to respond to the catalog at a rate close to the past-buyer rate of 3%. Calculating the cost of attracting someone to become a registered visitor was difficult, because Web traffic resulted from many actions: banner advertising, listings on search engines, and Alloy’s print advertising in media like Seventeen Magazine. The catalog was a significant driver of traffic to the Web. On the day that the catalog reached its audience, traffic to the site would jump 40%. It would continue to rise to about 180% of pre-mailing levels for a week, and slowly fall back. Possessing a copy of the latest Alloy catalog conferred significant prestige in a junior high school lunchroom. And then there was wordof-mouth. Many visitors to the Website, and many who decided to register, came at no cost to Alloy because a friend had mentioned the site, had e-mailed a chat room story, or had asked for an opinion on an item of clothing shown on the site. Less than 5% of Alloy’s revenues came from orders placed on the Website. When an order was submitted on-line instead of by phone, Alloy paid its fulfillment company $3.00 instead of $6.00 to reflect the saving of telephone handling charges. Alloy’s e-mailed catalog, termed Alloy E-Zine, was another small element of the business. Because Alloy had no way of knowing whether a recipient’s e-mail system was able to view graphic displays or color, it used only text in the E-Zine. Only 25% of those who indicated willingness to receive it ever opened it, and of those 1% placed an order in the course of a year. These orders were fulfilled at $3.00 each if they were placed by return email. Sponsorships and banner advertising were a small but rapidly growing source of revenue. As Alloy’s base of registered visitors and catalog recipients grew, both became assets that interested advertisers. The AOL Deal Diamond reflected on the AOL deal. It was not a question of finding $2 million. If the IPO went ahead at the planned price of $15, it would generate $55.5 million and Alloy would be awash in cash. Diamond tried not to be annoyed at the idea that AOL would offer this deal on the eve of his IPO. â€Å"I’ve been talking to AOL for a year about opening a teen shopping area, showing them what a big revenue opportunity it could be. Now suddenly they get it, and they think it’s worth $2 million.† He thought to himself, â€Å"What else can I do with $2 million? That’s over 4 million catalogs, which means more sales, more site visits, more registrations, and more E-Zine registrations. Alternatively, it could buy us exposure on television, and that would build a stronger brand.† Alloy’s budget for 1999 included a line item of $2.5 million for production of two television spots and $2.5 million for air time. Yet AOL was Alloy’s most important source of traffic to the Website. More than a third of visitors to the Alloy site used AOL as their Internet service provider. Would a competitor on the AOL site be able to intercept them? Would the announcement of a competitor’s deal with AOL on the eve of the IPO be as bad for Alloy’s share price as an Alloy deal would be good? The cellphone rang again. It was his partner, Neil Vogel. â€Å"Matt, Wall Street would like it if you would do that deal. They don’t want iTurF to pick it up. This is valuable real estate on a really important teen property.† 9 Downloaded by Junfei Xu on 9/02/2013. New York University, Stephen Tamke, Fall 2013, 001-003 500-048 Alloy.com: Marketing to Generation Y Exhibit 1 Total Teen Spending in 1996 $ billions % Apparel 36.7 34 Entertainment 23.4 22 Food 16.7 15 Personal Care 9.2 9 Sporting Goods 6.7 6 Other 15.3 14 Total 108.0 100 Source: Packaged Facts via InterRep Research, in MSDW Equity Research: †Fashions of the Third Millennium,† June 1999. Exhibit 2 Estimates of Teen Spending Rand Youth (Adweek May 18, 1998) 1996 1997 Morgan Stanley Dean Witter’s report â€Å"Fashions of the Third Millennium,† June 1999 $108 billion $91.5 billion 1998 1999 Teen Research Unlimited (quoted in Alloy press handout) $141 billion $136 billion 10 Downloaded by Junfei Xu on 9/02/2013. New York University, Stephen Tamke, Fall 2013, 001-003 Alloy.com: Marketing to Generation Y 500-048 Exhibit 3 Consolidated iTurf Income (in $ thousands) st st Net revenues 1 quarter ending 1 May 1999 2615 Cost of goods 1332 35 Gross profit 1283 34 Selling, general and admin. 1753 109 Interest income (expense) (112) 11 Loss before tax (358) (86) Income tax (benefit) (161) (33) Net loss (197) (53) Apr 99 = 731,000 Feb 99 = 635,000 50 million 4 million No. of unique visitors No. of page views in April Size of mailing database 1 quarter ending 30 April 1998 69 11 million names Source: IPO Filing Exhibit 4 Alloy Online Annual Fiscal Performance Fiscal year 1996 1997 1998 (thousands) Net merchandise revenues $25 $1,800 $10,100 Of which on-line order placement accounted for: – $40 $710 Sponsorship and other revenue – Gross profit % Selling & Marketing expenses Web pages views (Month of March) $125 32.5% 41.7% 46.3% $98 $2,000 $9,200 1,500 25,000 Weekly e-zine registrations 480 Source: Company records 11 Downloaded by Junfei Xu on 9/02/2013. New York University, Stephen Tamke, Fall 2013, 001-003 500-048 Alloy.com: Marketing to Generation Y Exhibit 5 Alloy Online Quarterly Performance 1997 1998 1998 1998 1998 1999 1999 31 Oct Jan 31 Apr 30 Jul 31 Oct 31 Jan 31 Apr 30 ($’000) Net merchandise revenues 401 1396 1353 2082 3215 3436 2391 Sponsorship, etc. – – 1 5 46 73 163 Total revenues 401 1396 1354 2087 3261 3509 2544 COGS 263 783 906 1200 1665 1715 1249 Gross profit 138 613 448 887 1596 1794 1305 34% 44% 33 42.5% 49% 51% 51% 903 1437 1782 2992 3396 2679 3529 (749) (806) (1312) (2165) (1901) (985) (2302) 400,000 800,000 Gross profit % of revenue Operating expenses Net loss Number of registered users Source: Company records 12 Downloaded by Junfei Xu on 9/02/2013. New York University, Stephen Tamke, Fall 2013, 001-003 Alloy.com: Marketing to Generation Y 500-048 Exhibit 6 Circulation of Leading Teen Magazines Publication Publisher Circulation as of 1998/99 Seventeen (monthly) Primedia Consumer Magazine Group 2,400,000 Teen (monthly) EMAP 2,400,000 YM (10 x year) Gruner & Jahr 2,200,000 Teen People (monthly) Time Inc. 1,300,000 Jump (10 x year) Weider Publications 350,000 Twist (monthly) Bauer Publishing 265,650 Girl Lewitt & LaWinter/Freedom 250,000 Source: Various 13 Downloaded by Junfei Xu on 9/02/2013. New York University, Stephen Tamke, Fall 2013, 001-003 500-048 Alloy.com: Marketing to Generation Y Exhibit 7 Examples of consumer-generated content on Alloy Website Source: Alloy Website 14 Downloaded by Junfei Xu on 9/02/2013. New York University, Stephen Tamke, Fall 2013, 001-003