Opportunities For American Studios In Bollywood And How Should Hollywood Approach Indian Film Market Case Studies Examples

Bollywood industry is the largest film industry across the world in terms of number of movies produced in a year. Indian film industry is globalizing and providing lucrative opportunities for American Studios. Porter five forces model helps in understanding competition prevailing in the Indian film industry and strategy that American companies can used to enter into the industry.
Bargaining power of customers is high in Indian film industry. Consumers have wide variety of entertainment options available to them such as availability of numbers of channels and films. Large number and different variety of movies get released every week such as horror, comedy, thriller and family drama. It is observed that Indian consumers are accepting and liking genres used in Hollywood movies. Consumers started preferring movies based on fiction and close to the realities without much music, songs and dance. The changing customer taste encourages American studios to develop movies by mixing Hollywood and Bollywood culture.
Industry rivalry is high in Indian film industry. India has more than 400 production houses that produce variety of big budget movies as well as low budget regional movies. The Indian film industry is highly fragmented with presence of diversified rivals. Various large production houses are family owned such as Yash Raj, Adlab, and R.K. Studio are owned by Chopra, Ambani, and Kapoor families. These large studios are involved in diversified business practices and create tuff competition for existing and upcoming players. Multiple regional languages and diversified group of consumers make industry more competitive. However, Hindi is mother language of India and accepted by all people across the country. American studios have higher chances of success if they develop movies in Hindi language at initial phase because regional movies are still dominated by local regional culture and traditions.
Bargaining power of suppliers is low in the industry due to presence of multiple quality suppliers. American studios can easily get desired services such as content writing, music, distribution and exhibition of movies from available pool of service providers. Presence of multiple suppliers makes market competitive and force suppliers to offer their services in quality and timely manner.
Threat from new entrants is low in Indian film industry because the production of film required high capital investment. Sunk cost is also high for the industry, which discourages new entrants to enter into the industry. Indian film market is mature market hence learning curve is steep. Indian film market is well developed with wide spread distribution network and presence of multiple distributors; however, getting into an agreement with any renowned distributor is not an easy task for any new entrants.
Threat from substitute is low to moderate because print media, cultural events, internet or sport events cannot replace film. People who like watching movie will watch it. Availability of huge number of multiplexes and cinema halls made it easy for consumers to watch their favourite movie at any time they want.
The globalization of Indian cinema is truly visible in the form of certain movies such as Slumdog millionaire, Bend it like Beckham, Monsoon wedding, Fire, Earth, and Salaam Bombay. Foreign investors utilized local talent in order to produce movies that are global yet local. American studios should also adopt similar policy while entering into Indian film market. They should develop movies by using local talent that is well aware with local cultures, traditions, taste and preferences, and also understand global market.