In focus: Film industry in India
The Indian film industry celebrated the centennial of Indian cinema in 2012 reaching approximately INR108 billion. The segment has been growing at an estimated 13% per annum and is expected to grow at 16% to reach INR170 billion by 2015. Last year was significant for the industry, with the number of films released grossing collections of more than INR1 billion at the box office increasing to nine from a meager two in 2010. The year also saw a diverse range of movies, in terms of their budgets and subjects, which achieved success at the box office. Furthermore, the industry is seeing increased penetration across languages with the production of several multi-lingual movies such as Vishwaroopam, while there are several others being re-made in different languages.
Indian film industry - Revenue sources (as of 2012)
Source:“India Media and Entertainment - The dark horse rising,” Anand Rathi Research, 6 August 2012, via ThomsonOne.
This spurt in revenues is the result of the increased focus of film-makers on marketing, distribution and pre-production. Furthermore, there is an increase in the quantum of money being spent on movies, and producers have significantly increased their production and marketing budgets as well. All this has resulted in a decline in the number of movies being produced, but has significantly increased their success ratio. Increasing production budgets have also led to production houses entering co-production agreements to diversify their risk. For example, Eros International has recently signed two separate co-production deals with MSM and Endemol, and Yash Raj Films has tied up with Dibakar Banerjee on co-production.1
Hollywood in Bollywood
|Metric||India (Bollywood + other languages)|| USA |
|Annual revenue||$1.75 Billion||US$ 51 Billion|
|Number of movies (yearly)||1,091||1,000|
|Filming locations||India/Australia/ Europe||World-wide|
|Royalty collecting society||2 (IPRS, PPL)||3 (ASCAP, BMI & SESAC)|
|Film/ TV production education||~5 major schools + several small ones||Multiple (20-30 major film schools)|
The Indian film industry is one of the fastest growing in the world, next only to the Chinese film industry. It is poised to become a US$5 billion industry by FY14. In the recent past, several Indian-themed movies such as Slumdog Millionaire and Life of Pi have also performed significantly well across the world. Several Hollywood studios are entering collaborations with or buying stakes in Indian companies such as Disney, Fox, Sony etc. There has also been a surge in the number of Hollywood films released in India given India's large English speaking base and success of dubbed content. Furthermore, Hollywood studios have been releasing their films in India simultaneously with their North American release.2
Earlier, Hollywood films were almost entirely restricted to India’s urban, English-speaking population, and consequently, only accounted for around 4%–5% of the country’s annual box office collections. However, over the last few years, the market share of such films has increased slowly and reached around 11% of annual box office collections. During 2012, several movies such as The Avengers, Skyfall, The Amazing Spiderman and Ice Age 4: Continental Drift grossed significantly high revenues from India.3
Over the last few years, Hollywood studios have been aggressively marketing their films in India and are looking at new ways of promoting their movies in the country. Last year, Marvel Studio’s The Avengers released an original Hindi soundtrack, composed by Mumbai-based rock band Agnee, to promote the movie. Hollywood studios have also begun dubbing their films in other regional Indian languages apart from Hindi. In addition, they are subtitling their English versions in Hindi, making variations in American English and accents easier for an Indian audience to understand. Furthermore, they are forging alliances with local studios to gain a strong foothold in the Indian market. For example, since completing its acquisition of UTV Software Communications, Disney has merged its India operations with those of UTVand releases all of its films through the new entity Disney UTV. Similarly, Paramount’s films are now handled by Viacom 18, the 50:50 JV between Paramount’s parent Viacom and Network 18.4
The popularity of Hollywood films in India is facilitated by increasing knowledge of English among the country’s young population. The growing prominence of English TV channels, particularly among the young audience, highlights the fact that Hollywood films are set to gain a significant market share in India and may overtake local films — as they had done earlier in Western Europe and other countries across the world.
1“MSM enters film production biz; inks co-production deal with Eros,” IndianTelevision, 13 February 2013, via Factiva. “Yash Raj Films signs its first co-production deal with filmmaker Dibaker Banerjee,” The Economic Times, 9 January 2013, via Factiva.
2“Indian movie industry to be worth $ 5 billion in 2 years: MPAA CEO,” The Economic Times, 14 March 2012, via Factiva. “Indian film industry looks good in global pecking order,” Business Standard, 8 June 2012, via Factiva.
3“Hollywood rising: The success of the new Batman and Spider-Man flicks proves Hollywood is bigger than ever in India,” Mail Online India, 3 August 2012, via Factiva, © Associated Newspapers.
4“Hollywood films gain traction in India,” Screen Daily, 20 September 2012, via Factiva. “Hollywood Entices Indian Movie-Goers With Hindi Song for ‘The Avengers’,” The World, 12 April 2012, via Factiva.