Indian film industry to gross $3.7 bn by 2020

Hyderabad: The Indian film industry, touted as the largest in the world churning out anywhere between 1,500 and 2,000 films every year in over 20 languages, is expected to gross box office collection of $3.7 billion (approximately Rs 24,679 crore) crore) by 2020 from $2.1 billion now, according to a report released by Deloitte Touche Tohmatsu India LLP (DTTILLP).

The first-ever exclusive report on the Indian film industry, launched during the Indywood Film Carnival 2016 held at Ramoji Film City on Sunday, attributed the growth, projected at an 11 per cent compound annual growth rate (CAGR), to the increasing per capita income, growing middle class, demand from Tier-II and Tier-III cities, diversifying into international markets, releasing the potential of digitisation, upside from ancillary revenue streams and upcoming use of visual effects in movies.

This report is a first-of-its-kind and is aimed at initiating an integration process for the entire film industry in India. The report is a result of extensive research work on the Indian film industry and we are optimistic that the entire industry will adopt it as a bible for the film business,” said Sohan Roy, Director of Indywood Projects.

Despite the large number of films produced in India, the DTTILLP said the industry’s gross realsisation had substantially been lower than its global counterparts. For example, the box office realisation in the US and Canada stand at $11 billion whereas these countries produce significantly lower number of films (approximately 700 films).

According to the report, the main challenges facing the film industry are low infrastructure, slow growth in the average ticket price (ATP), complicated tax regime, rising costs and lack of access to funding, piracy, multiple layers of bureaucracy and the prevailing strict censorship norms.

The domestic box office contributes a majority of the revenue, representing 74 per cent of the total industry. Cable and satellite rights and online/digital aggregation revenues are the fastest growing segments, and are expected to grow at a CAGR of about 15 per cent over the period FY15-FY20.

Further, the industry is dominated by the Hindi film industry (popularly known as Bollywood) contributing 43 per cent of the revenue, while the regional films contribute the remaining 57 per cent.

International films is currently a small, but growing segment, driven by the rising numbers of English (and other foreign language) speakers, as well as increasing numbers of international movies witnessing dubbed releases in India.

The report said that the other trends in the industry included foreign films gaining share in the Indian industry and the entry of international studios through acquisitions.

Going forward, the industry needs to focus on film tourism, skill enhancement, shortening window of release through better planning, updating current technology, countering piracy and growth of multiplexes, to ensure growth and profitability, DTTILLP said.