Indian Economy News

Indian films' box office collection to be $3.7 billion in 2020

Mumbai: Despite being the largest film industry in the world in terms of number of films produced every year, the Indian film industry lags behind US and other countries in terms of revenues. This is even as the industry is poised to grow at 11% CAGR reaching $3.7 billion by 2020, notes a report by one of the big four audit and consulting firm Deloitte. 

Released at the Indywood Film Carnival 2016 at Ramoji Film City, Hyderabad on Sunday, the Deloitte Indywood report elaborates the current status of the Indian film industry, focus areas, challenges, and make in India initiative and its relevance for the industry. 

The report highlights low infrastructure penetration, slow growth in average ticket price (ATP), complicated tax regime, rising costs and lack of access to funding, piracy, multiple layers of bureaucracy, and prevailing strict censorship norms as some of the challenges hampering the growth of the industry. 

The report pegs current gross box office realisations of the industry at $2.1 billion. It points out that an increasing per capita income and growing middle class, growing demand from tier 2 and tier 3 cities, diversification into international markets, increasing ancillary revenue streams and more use of visual effects (VFX) in movies will drive the growth of this industry. 

According to the report, the domestic box office contributes 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 expected to grow at a CAGR of about 15% over the period FY15 - FY20. 

Further, the Indian film industry is dominated by Bollywood, the Hindi film industry, contributing 43% of the revenue while the regional films contribute the remaining 57%. International films is currently a small, but growing segment, driven by rising numbers of English (and other foreign language) speakers, as well as increasing numbers of international movies witnessing dubbed releases across the country. 

Other trends in the industry: 

International / foreign films gaining share in the Indian industry 

Entry of international studios through acquisitions and collaborations 

Rise of regional cinema

Digital adoption across the value chain 

Organic and inorganic growth in multiplexes 

Emergence of alternative streams of revenue 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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