Showing posts with label Indian film industry. Show all posts
Showing posts with label Indian film industry. Show all posts
Saturday, January 9, 2010
Wednesday, November 5, 2008
TRACKING THE INDIAN ECONOMY -NOV 6TH ,2008
The Indian Economy as on
*The PM has requested the industry to ensure that there are no lay off’s. With the elections round the corner that is understandable. There is also talk of enhanced investments in infrastructure to expedite projects (read : improve liquidity in the system). Expenditure is social sectors would be enhanced. This will ostensibly be not done through the “smart cards” that have been used in some States and proved extremely effective in welfare projects but through the “traditional” health and educational projects. (grass root level politicians should be happy!).
*As if on cue, the LIC has pumped 15000 crores into non convertible debentures of private companies with AA ratings.
*While Mulri Deora will celebrate his son’s wedding to Manmohan Shetty’s daughter in an austere fashion, with due respects to the economic situation in the country, he might treat the country to a reduction of at least Rs 2 per litre on petrol given that crude has come down to the figure of 69$ per barrel.
*The calm on the surface however, belies the undercurrents.
* Kingfisher defaulted on lease payments for 4 jets. Given what happened to Jet, he may not risk slashing jobs, but salaries are likely to be cut .The “sons of the soil” argument is now being extended to “desi vs videsi” pilots. Cutting the salary of expats is now the clarion call. This has been heard at Jet and is likely to be the scenario at KF. “King of hard times” seems to be the best way to describe Vijay Mallya nowadays J
*The fall in crude and ATF has not seen a cut in prices from the premium airlines, but the budget airlines are expected to reduce prices. Some of them have introduced full service “value class” options. I guess now it is a case of “anything that flies”!!! There should be some downward migration of customers from the Mallya- Goyal Alliance.
* In the travel and tourism sector, it is learnt that web sites and agents are not likely to be given commissions as of yore and travelers may soon be getting better deals by dealing directly with airlines. Hotels may remain the bread n butter of these sites
*From 150 proposals every week for realty projects in BMC(Mumbai Muncipality), it has come to 15. According to the TOI Mumbai ( a couple of days ago)there is a list of real estate projects in Mumbai which are on hold. Real estate prices are likely to move down significantly in the next quarter.
* There is a reported freeze on new recruitments in most companies in all sectors. Spice Group has gone in for salary cuts and probably there are others too.
* News channels seem to have been the worst hit. Most financial services, realty companies which form the bulk of advertisers in these channels are “flighting “ their schedules and the channels in turn seem to be “grounding” variable costs and that now seems to include staff costs. There is no blood bath as yet but the chiseling has started according to news reports.
*PWC mentions that in the Rs 51,300 crores ,Entertainment and Media sector, the growth rates would come down from 17% to single digits.
*The sports industry too will show a decline with sponsors backing off and in case of the EPL , the precarious situation of a lot of Clubs were exposed with the crisis of the Iceland Bank.
*The only saving grace is the 6th Pay Commission report which was disbursed to the Govt employees this Diwali (40%) .The next instalment (60%) is scheduled for next year.
*FMCG too, should hold fort. People will continue to eat and have a bath and brush their teeth J never mind the meltdown and the roll backs!!
Saturday, June 28, 2008
IPL 2008. A Businessman's Guide
Q What explains the difference in franchise fees and how is it recovered?
The difference in franchise fees could be due to the following; history of the game and popularity, quality of player pool in the catchment area, commercial activity and business support, population of the city. The franchises were allotted on the basis of the highest bidder and the presence of business houses with an active interest in high profile sporting events would have impacted results in terms of expected sponsorship support. Ultimately the indicator of potential for the game at a local level is indicated by the attendance at the venue.
To compensate the premium paid as it where, Mumbai, which was one of the highest bidders, hosted the semi-finals and finals, while the opening was held in Bangalore
It needs to be noted that the EPL (football), where the stadiums are similar in capacity and the attendance similar, at 20,000 to 30,000, the share of gate collections comes to 35% of the total revenues of the franchise clubs, as against 15% in the case of IPL. This is because the EPL has greater number of matches at 38 matches per side vs 7 matches per side (9 if you make it to the finals) in case of the IPL. The revenue realization per match is also very much on the higher side in case of football.
Q. To what extent does the prize money play a role?
Prizes collected were almost 42 crores according to estimates from revenues generated. As per announcements made at the start of the league only Rs 12 crores were distributed. Its quite possible that the balance would be distributed in the same proportions. RR and CSK should benefit hugely as also DD and PK. However the benefit of making it to the semi finals and finals will be huge from the point of view of the share of TV rights that will accrue from the next year onwards. This should be sufficient incentive for the teams to play it with intensity and keep their employers happy!!
Q. Why is merchandising not featuring as a key revenue in the IPL?
Merchandising as a revenue stream has not provided much in India India
The impact of gate collections and location of the franchise is shown in the table below:
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