Snapshot – Indian Home Video Market

Growth in number of DVD players in India :

• 2007 – 12 million
• 2009 – 40 million
• expected to grow by another 12 million per year.

However, the value of DVD sales is falling:

• 2007/8 – 350 Crore
• 2008/9 – 320 Crore (estimated)

The industry estimates that 90% of home film viewing is of pirated material. Despite aggressive cost cutting in DVD prices, many companies have not seen demand increase.

It seems to me that the biggest problem to be countered in combating piracy is distribution. Firstly of films, and secondly of legitimate DVD.

In terms of films, a huge weakness in the Indian distribution network is the lengthy delays in prints moving from the larger cities to smaller cities. No one wants to wait weeks to watch the films that the media is raving about, so buying pirate DVDs seems like a ‘fair’ option to people living in smaller towns. The cost of making enough film prints to cover all cities is prohibitively high, so the only solution to this is the steady roll out of digital cinema.

In terms of DVDs, until the police work to remove the pirate DVD stalls from train stations and shopping areas,  it is simply easier for most people to purchase pirated material rather than original DVDs. Now that companies like Moser Bayer are offering real DVDs at almost the price of pirated ones, if the availability of purchase locations was as convenient as it is for pirated material, then most consumers would prefer the higher quality of real discs.

When Moser Bayer began their discounted DVD strategy, their announced plans included selling the DVDs from stalls and roaming carts. I don’t know why they haven’t pushed ahead with this?

(Stats from Screen India, Oct 2nd 09)

Quick Numbers – Indian Cinema Attendance Statistics

  Dodona Research in the UK specialises in studying the cinemagoing habit of various countries. Here’s a couple of titbits from their India 2009 report:

• The often quoted stat that 4 billion cinema tickets are sold each year in India is likely very inflated – the accurate figure is probably around 1.5 billion.
• At the end of 2002 there were 80 multiplex screens, now there are over 1250. This year there will be around 190 million admissions.
• While multiplexes are booming, traditional single screens are rapidly closing. The time delay in moving prints from the multiplexes in cities to the single screen theatres in rural areas allows pirates to make copies available before the film releases – stealing much of the audience. Over 3000 screens have closed in the last 7 years. There are currently approximately 7,600 screens operating which will this year sell around 1.4 billion tickets.
• Average ticket cost at a multiplex is Rs.88. (This sounds a bit low to me? i have visited multiplexes in smaller towns and they typically seem to charge Rs.70 – 100. In bigger cities the ticket price is easily Rs.120-250.)
• In 2007, Multiplexes accounted for less than 30% of total box office takings. By 2012 this figure will be over 50%. However, 75% of tickets sold will be for single screen theatres.

The development of the Indian cinema industry is matching the pattern followed by other countries:

• Cinema is changing from mass audience entertainment to focus on a smaller, middle-class demographic
• Audience taste is gradually shifting to more sophisticated, international films

Motivating Top Managers in Changing Times

Of the many roles of a manager, ‘manager as coach’ is probably the one i have always found to be the most important and impactful for a company. I find that the most successful managers are actually the ones that are constantly developing their team members. Firstly this makes the team more productive/successful but as team members can take over more of the management duties, the manager in turn can complete even more high-level work.

This theory works perfectly well throughout most levels of an organisation. But what happens when you reach the top? A company’s senior management (CEO, CFO, CIO etc) are each specialists in their fields, and are, typically, successful managers who have worked their way up. Can a CEO ‘coach’ the executive team?

An article in McKinsey Quarterly explores the role of a CEO as an ‘emotional’ coach to the top management team.

When the economy or other aspects of the business environment change rapidly, senior managers can be thrown off guard. They have reached a level of seniority by delivering results through certain strategies and market assumptions. Suddenly those strategies no longer work. Often, the managers most affected are the ones who have been most successful in the past, as they may have never faced potential failure.

When a senior manager suddenly realises that their strategies are no longer working, at a time when their actions are most under scrutiny and the fate of the company may be at stake, the most automatic reaction is fear. Fear of losing their job, their reputation, and their identity as a senior manager.

“Spiking levels of fear can convert frank, flexible, open, and self-reflective leaders into defensive, close-minded, rigid, and literal ones. These leaders may take things personally, feel persecuted, cease productive self-reflection, and lose the ability to process new information and respond to difficult situations. Others in the organization will notice this, of course, and will let the executive know in subtle ways—reinforcing fear and defensiveness.” (1)

This is the point that a CEO needs to step in with a coaching mentality, not on a technical level, but an emotional one.

The first step is to create an environment where managers will be comfortable in recognising and hopefully verbalising their fears. Often this can be achieved by the CEO personally discussing their own fears, and by reaffirming trust in the manager. The work environment needs to stay positive and upbeat, with real transparency about employee job security and industry prospects.

Step two is to overcome denial. Because they don’t want things to change, managers can ignore or misinterpret the evidence of change. The CEO needs to find ways to force senior managers to look at things from a fresh perspective and abandon the old assumptions that are blocking their thinking.

Step three is to encourage managers to start learning. A new business environment has new risks, challenges and opportunities that all need to be mastered. Customer behaviour can radically change, forcing a rethink of marketing and promotional strategies and budgets.

 

(1) A CEO’s guide to reenergizing the senior team, Derek Dean, 2009