Bollywood Actors make more money from endorsements, beats cricketers hands down

For Bollywood Actors, endorsing brands is a major source of income. Not only is it lucrative, several celebrities end up picking a stake in the company they endorse (earning them a handsome amount).

And when it comes to brand endorsements, Bollywood beats cricket hands down. Virat Kohli and MS Dhoni are the only cricketers who figured in the list of top 15 celebrity brand ambassadors (published as part of a celebrity brand valuation study done by US consultancy firm Duff & Phelps).

As expected, Shahrukh Khan was at the top of the list.

Sachin Tendulkar, didn’t figure in the list, but he has stakes in several companies, including a minority stake in UAE-based travel portal which he used to endorse at one point of time.

Good Money for Newcomers

Bollywood Actors make more money from endorsements than films; well, at least those who’re new in the industry do. Only the A-listers probably make good money from films (and most of them still do ads), but when it comes to newcomers who have been in the industry only for a short while, endorsements is what gives them the money to enjoy their lifestyle.

Most newcomers are bound by contracts, so even if they hit jackpot with their first movie, they may not be in a position to capitalize on their success by charging more for their new films. Besides, the younger breed of actors in Bollywood nowadays have become more prudent and don’t want to focus only on money until they are established.

That’s where endorsements are a goldmine for them!

Also Read: Bollywood bombshells promote new line of Fashion.

Parineeti Chopra Going Great Guns

Parineeti Chopra, who’s been in the industry only for around 4 years, feels quite happy about her current financial status. Even though she has worked in quite a few films, its not her films that provides her the moolah, but her endorsements.

The actor says, “I am making a lot of money (laughs), touchwood. I think the reason is that I have 12 brands [to endorse]. You earn mostly from endorsements. I am not sure, but I think I am endorsing the maximum number of brands. Thankfully, due to them, I am doing well [financially],” she says.

“Everyone makes fun of me, saying that Parineeti toh bas paise bana rahi hai (she is only making money). I want to be financially independent. I am very happy.”

And how does she spend her money?

Parineeta loves cars, she already owns three luxury cars. And recently, she moved into her own sea-facing four-BHK apartment in Khar. “Having grown up in a huge bungalow in Ambala (home to several defense establishments), we often joke that we are living in the middle of a forest. My four bedroom apartment is probably the size of one of their bedrooms at home. But I have something that they can’t boast of — A view of the sea. The building comes with several amenities, including a gym and a swimming pool. Now you know why it’s irresistible!” says Parineeta.

At one time, Parineeti Chopra used to work as a public relations consultant for Yash Raj Films. However, her fortune turned when YashRaj signed a three-film deal with her. Chopra made her acting debut with a supporting role in ‘Ladies vs Ricky Bahl’, for which she earned the Filmfare Award for Best Female Debut and a nomination for Best Supporting Actress. Since then, she’s worked on significant roles in movies like Ishaqzaade, Shuddh Desi Romance, Hasee Toh Phasee, and Daawat-e-Ishq.

Seniors Already Know the Formula

The seniors actors have already realized this fact, and there’s a reason that you see the A-listers – the Khans, Padukone, and others – more in glossy magazines than on the big screen.

Its because they have figured out that if planned well, endorsements can actually earn them more than films.

Unlike the general perception, Branding is actually as serious a business as acting. And these stars know it. You’ll see top stars devote anywhere from 1 month to even up to 3 months a year, only to promote brands.

Some of them, Kareena Kapoor for example, used to juggle with almost 14 brands (when at her peak) and used to get paid handsomely for it.

Allows the Stars to Focus Better on Films

Aamir Khan may not be the highest paid actor in the country and he also takes his own sweet time to sign any new films, he also devotes considerable time to television shows like ‘Satyamev Jayate’.

The only way he’s able to do that is because endorsements are a big chunk of his business plan. Aamir charges around 14-16 crore rupees per brand, and with 4-5 brands under his pocket, he’s able to take home around 60-65 crores a year, only through endorsements.

Its more than what he usually earns by acting in one film, and allows him to take up other assignments which are closer to his heart.

Same goes for other top actors like Shah Rukh Khan & Hrithik Roshan Kapoor who usually do only one movie a year. And because the star value of these actors is defined by their movies, these endorsements helps them to focus on doing quality movies.

Role of Celebrity Management Companies

Where there’s a business opportunity, you can expect more companies to join in to provide professional level services. That’s where the celebrity management firms, also known as brand managers, fit in.

These guys manage the portfolios of the stars, suggest them what type of brands to endorse, and also work out ways to keep their celebrity clients perennially interesting (in the eyes of the public and the advertisers). Brand managers also always endeavor to match the brand versus the celebrity strength.

This is a lucrative business currently and there’s good money to be made for everybody involved. Atul Kasbekar, who’s a renowned fashion photographer, now heads a celebrity management company called Bling.

Fierce Competition among Celebrities

Because the moolah is good, there can be fierce competitions for the ads. Its common for actresses to drastically cut their prices to snatch a brand from a competitor, or even to retain a brand.

That’s where it helps if the actor is a strong brand in itself.

Shailendra Singh of Percept Profile (manages star endorsements) feels its only the select top actors who actually earn more from their endorsements than films. And that’s because those actors are a brand themselves. Singh gave the example of Shah Rukh Khan, who has successfully managed to create two separate identities for himself – one as Shah Rukh the actor and the other as SRK the brand.

Stars Need to be Prudent with Their Selections

Because this is a good source of income for most celebrities, they also need to be careful with their selections.

There are some branding experts, who feel that using a celebrity to promote a brand may not always give the company the benefit they expect. They feel that if the brands (products) communication with the public is good, using a celebrity is an unnecessary expense to promote the product.

Besides, if the celebrity is seen endorsing several products, the audience may not be able to relate the celeb to the product. An actor may have done an advt for a telecom firm but the public might mistake the product for a soft-drink, which the same actor endorses, and vice-versa.

That’s where celebrity management firms advise their celebrity clients to limit the number of their endorsements to six or max eight. That way the celebrity is able to sustain viewer interest, and is better for both the brand and the actor in the long run.

Saif Ali Khan, at one time, used to earn more from ads than from films. But then he started some low-range products, which resulted in bigger brands dropping him.

Bollywood Celebrities with Brand Valuation Over $100 million

When the first ever celebrity brand valuation study was conducted in India, could you guess which Bollywood celebrities had a valuation of over $100-million? Yes, Shahrukh Khan made it in that list, but the other Bollywood celebrity who made it in that list was neither Salman Khan nor Hrithik roshan. It was the young & dashing Ranbir Kapoor!

So what were the parameters on which the valuation was done?

The study (done by Wisconsin based American Appraisal ) calculated the celebrities’ brand valuation based on various factors such as reputation & credibility of the individual, ability to generate income from endorsements, and the annual endorsement revenue they earn.

So while Salman Khan’s case was understandable considering he has court cases against him, it was a bit perplexing that Ranbir was placed second ahead of Hrithik Roshan (probably his breakup with Sussanne Khan?)..

Nevertheless, based on those factors, SRK & Ranbir Kapoor emerged at the top of the list among Bollywood celebrities. For these guys, endorsement fees make a big chunk of their annual income, almost close to 50% of their annual income, the report said.

But then, the brand value can change dramatically depending on how their recent films perform (celebrity’s area of core competence). A string of failures will negatively impact the celebrity value’s and that too very rapidly.

Salman Khan, Aamir Khan and Hrithik roshan made it in the top 10. The three actresses to figure in the top 10 list of the American Appraisal report were Deepika Padukone, Katrina Kaif and Kareena Kapoor.

Besides the Bollywood stars, top cricketers also featured in that list.

Source: Economictimes

Summing it Up

Be it Parineeti, Alia or Sonakshi, or newcomers like Richa Chadda, Surveen Chawla, they all are making good money from endorsements, now that they are in the limelight. So basically, the business model for these celebrities is to do films, so that they get popular. Once they become popular, focus more on brand endorsements and make hay while the sun shines.

Now, you might think that the consumers end up paying more for the product, because some Khan is endorsing it, and that’s actually true. But then you can always buy something which is cheaper and not endorsed by a celeb; the only thing is that it may not be seen as cool or your peers might just laugh at you for using a ‘chalu maal’ (cheap stuff). Unfortunately, that’s the way the current capitalist economic game is played. These actors are probably just victims of this system, or you may say they’re trying to capitalize on the opportunity available.