THE ECONOMICS OF KGF-2 “ENTERNTAINMENT ENTERTAINMENT” – THAT IS THE BUZZ WORD OF KGF2 – Dr. Annapoorna

20 May, 2022.

The “Creative Industry” has an impact on the Indian economy as well. Today, the entertainment sector is sometimes referred to as a creative industry. It includes movies, music, television programming, advertising, broadcasting, cable, casino gambling and wagering, publishing, performing arts, sports, theme parks, toys, and games. It is one of the largest contributing sectors of the Indian economy and is also becoming one of the most prominent globally. Because of its forward and backward links to the growth process, the entertainment business is likely to support the economy.

The Indian consumer has a long-standing passion for movies. This is the only business capable of bringing people together, bridging cultural and political barriers, serving as a source of identity and expression, and influencing attitudes and thought processes. The film industry is a particularly effective tool for promoting national integration, delivering social messages, and projecting India’s culture and influence on the international arena.

Our stress is relieved through entertainment. It gives you both strength and leisure. It serves as a source of fuel for our car. Films, on the other hand, are the primary source of entertainment. In India, films are the most popular form of entertainment for the average Indian. But the question is whether movies are merely a source of amusement and leisure, or whether they contribute constructively to our economy.

Furthermore, the creative business has an impact in a variety of ways that are not reflected in the statistics. These industries have the ability to connect with people, bridge cultural and political barriers, provide a source of identity, shape attitudes and cognitive processes. They are a one-of-a-kind tool for assisting national integration, delivering social messages, projecting India’s culture, and influencing the worldwide range.

Entertainment creates jobs by triggering a chain of activities in a given economy, such as the demand hospitality sector, travel and tourism sector, health services, and local unorganised sector labour. The entertainment business has risen enormously in recent years. The Indian customer was highly speculative about getting delighted by going to the cinema after the outbreak. However, the three most financially successful Indian films since the outbreak have disproved this theory. It has broken all the previous records of the entertainment industry in the last five years.

Today for every Indian – post pandemic what matters is the entertainment coefficients.  Trade analyst and artistes associated with these industries help decode the phenomenal success of the film.  It has made phenomenally well in Hindi speaking territories.   The KGF 2 budget is only 100 crores.  It has broken all the previous records of the entertainment industry in the last five years and proved that entertainment industry can also contribute to the state and countries economy.

The economic impact of the film has a long lasting multiplier effect and it is measured in the three broad buckets:

Direct Impact:

KGF 2 has generated a business output of 800 crore in the Indian economy and has directly employed almost 1000 people for nearly four years (KGF1 was released in 2018). The combined revenue is the whole gross output. In terms of return on investment, this is around 800 percent higher and a highly worthwhile investment in the post-pandemic era. The total KGF 2 international collection may approach 1000 crore, according to market estimates. All previous box office records have been destroyed by this film. When it was first released, the film was screened on more than ten thousand screens around the world. The film’s overseas earnings, based only on ticket sales, total 30 crores. This is the first movie which has earned such a huge entertainment revenue from overseas.

 Indirect Impact:

The indirect impact is calculated by looking at the output and employment generated by suppliers to the creative industries as a result of their economic activities. For example, increasing film industry activity will raise demand for hotels, transportation, cameras, generators, and other items, resulting in greater economic production and jobs. In the hospitality, logistics, and travel and tourism sectors, the KGF 2 generated over $30 million in revenue. This was a much-needed booster dose for these industries, which had struggled in the aftermath of the pandemic.

Induced Impact:

The production and employment created as a result of consumption triggered by direct and indirect consumption over and above spending one’s salary. Many KGF2 employees have bought homes, vehicles, taken family vacations abroad, and put money into their children’s futures. This is almost equivalent to 20 crores. This was also a significant boost for the market, which had just recently recovered from the pandemic.

The economic lessons learnt from KGF2 are follows:

1. As a producer, production and product quality and delivery mechanism and time must be well planned.
2. Investment in the long run gives you larger returns.
3. More quality people employed, the product delivered will be accepted globally.
4. The product is more important for the consumer, than the production place and people.
5. Indian consumer is now one, no regional disparities when it is entertainment sector.  India is a diverse country, with 22 official languages and varied sub culture.  But KGF-2 is accepted across India as an Indian movie.
6. The producer’s confidence in expanding his investment budget, has more opportunities to recover investment as today they have big competing OTT business houses at the doorsteps for good content.  Today language and region is not a challenge due to dubbing and subtitle facilities (Example: Money Heist)
7. In this movie, the production unit reviewed the quality of the product and then decided to launch it as PAN India movie, last minute risk taking is worth sometimes.  The calculated risk taking propensity has to be shown by the key stakeholders, if company needs to make a good profit.

Support to be provided to the industry is

1. The market forces to be allowed to continue to shape prices and industry evolution for the most part.
2. Regulations be minimal, so that disruptions and distortions are minimised.  Pricing regulations in particular, affect the revenue optimisation (and recovery of investment) but not the cost side-which can throw financial plans awry and discourage investment.
3. Frequent changes in regulations be avoided, so that industry participants can plan ahead, rather than remain in reaction mode.
4. Self-censorship be encouraged, notably in terms of net neutrality.
5. Encourage improvement in screen density, internally and internationally.