DATA STORY: Khans on the wane but Indian film industry is on course to be Rs 20,000 crore industry

Tasmayee Laha Roy

Moneycontrol News

If you're still not intimidated by the rising number of 100-crore club flicks and Indian movies releasing in foreign markets like China to further inflate their coffers, then picture this: the Indian film industry is estimated to be worth Rs 20,660 crore by 2021.

Thanks to additional revenue streams like digital rights, the resurgence of cable and satellite platforms, overseas markets and growth of ancillary revenue streams such as in cinema advertisements, the Indian film industry is projected to grow at a CAGR of 7.7 percent till 2021, as per the latest KPMG-FICCI Indian Media and Entertainment Industry report.

The fate of the industry however hugely depends on the content generated. According to industry experts, the numbers can be achieved only if the film industry stays consistent at the box office. Commercially successful films are the need of the hour.

In the calendar year 2016, the Indian film industry grew by only 3% over the previous year to reach Rs 14,000 crore with a decline over the previous year mainly because of the dry run of Bollywood and Tamil movies at the box office.

However, 2017 is expected to witness a recovery of the domestic theatricals from the impact of demonetisation.

Also Read: End of an era? Shah Rukh Khan's movies are losing charm at the box office

Recovery of domestic theatricals becomes important as the segment remains the main source of revenue with a 70 percent share of the total revenue of the Indian film industry.

Largely Mumbai-based, Bollywood, one of the biggest entity of the Indian film industry, is trying to put its best foot forward to generate more interest and create better content.

Film trade analyst Atul Mohan stresses the same, “We need more people to watch films at the theatres. With immense competition from the digital platform where a month’s entertainment is available for the kind of money one has to spend to watch one movie at the theatre the content needs to be strong enough and reason enough for one to walk into the theatres.”

In the last two decades or so Bollywood has shown promise in terms of returns on investment. For instance ‘Aashiqui 2’, starring Shraddha Kapoor and Aditya Roy Kapur, that released in 2013 as a sequel to its 1990 counterpart Aashiqui, generated over 600% of the original cost of the movie.

Then there was Yeh Jawaani Hai Deewani the same year that generated 322% of the original cost. The trend prevailed only to grow four-fold with movies like PK, Sultan, Chennai Express, Bahubali 2: The conclusion and of course Dangal.

The growth in returns, however, is a development in the last two decades.

Popular Bollywood trade analyst, Taran Adarsh seconds that, “The advent of multiplex has made a huge difference in the way Bollywood functions. There has been a revolution in content alongside numbers also shooting up.”

Speaking about the non-performers, Adarsh says, “If we study the major setbacks of 2017 we would know even stars have failed to draw crowds be it in the case of Tubelight (Salman Khan), When Harry Met Sejal (Shahrukh Khan) or Jagga Jasoos (Ranbir Kapoor).”

Also Read: Is Bollywood saving the best for the last in 2017?

So what has actually worked for Bollywood? The answer is desi content.

“If we see the kind of content that has done exceptionally well we’d know that desi content is the way forward. There is so much entertainment available these days, that to get the audience to the theatre we have to have the kind of content that people want to see. We need to pick up a cue from films like Dangal and Baahubali and understand what the market needs right now,” said Adarsh.

Content aside commercial success is also the need of the hour according to critics.

“While we need content-driven film, it is very important to have numbers that would help us do so. We need money at the box office through commercial success that will propel the studios to experiment with content,” adds Taran Adarsh.

Hindi film industry apart, some regional markets such as the Malayalam, Marathi, Punjabi and Gujarati markets have also performed exceptionally well at the box office but due to their small overall share, they could not compensate for the decline of domestic theatricals.

According to a KPMG report, the regional market segment is expected to grow at a CAGR of 5.6% over the next five years. This is likely to be a combination of expansion in the exhibition sector — addition of multiplex screens and conversion of single screens into multiplex along with increase in average ticket prices (ATPs) - with converted single screen moving into higher ATP brackets.