Local Film Revenues Stagnate in India

Courtesy of UTV Motion Pictures
Bollywood hit 'PK'

The Indian industry stalled due to poor content but, despite its minor market share, Hollywood revenues were powered by franchise titles such as 'Amazing Spider Man 2.'

The Indian film business hardly recorded any growth in 2014, according to an entertainment industry report by consultants KPMG India.

The findings of the report, titled "Shooting for the Stars," were unveiled Wednesday at the Frames conference in Mumbai, organized by the Federation of Indian Chambers of Commerce and Industry.

Total film revenues reached $2.1 billion in 2014 compared to $2.08 billion in 2013, a growth of only 0.9 percent. Domestic theatrical revenues were almost the same at $1.5 billion in 2014 as they were in 2013, hardly reflecting any growth at 0.1 percent. However, overseas theatrical revenues for Indian films grew better at 3.5 percent, from $138 million in 2013 to $143 million in 2014.

Nevertheless, last year still saw a record-breaking title in PK, starring superstar Aamir Khan, which is estimated to have crossed the $100 million mark. Other big performers included sleeper hit Queen.

In his presentation, KPMG head of media and entertainment in India Jehil Thakkar said the film industry's lackluster performance “was quite a surprise, given that a couple of years ago, this was the industry that grew north of 20–25 percent.”

Blaming poor content, he added that the sector “was largely dragged down by the Hindi film industry” pointing that regional language films performed better. Thakkar also added that talent costs have “gone out of hand” while TV revenues for films have also receded to an extent.

Hollywood only commands a minority market share in India – estimated at just about ten percent – but the studios had a better year. The report didn't have any total revenue figures generated in India by the studios, only estimating the gross collections of the top ten Hollywood releases. This figure increased from $53 million in 2013 to $70 million in 2014.

The top three titles were Amazing Spider Man 2 ($14.5 million), Transformers 4: Age of Extinction ($10.5 million) and X-Men: Days of Future Past ($9.4 million).

Hollywood content consumption “is rapidly changing amongst the audience driven by the youth and emergence of new markets in (smaller) cities where largely dubbed content performs well,” said the report.

Though franchise and superhero movies draw a wider audience, small budget movies also performed well. The report quoted opening weekend figures as examples for titles like The Fault in Our Stars ( $881,000 from 83 screens) and Gone Girl ($581,000 from 155 screens).

Looking ahead for the overall Indian film industry, the report said that 2015 could again witness muted growth due to “the uncertainty around (domestic) content which is already in the pipeline and the slow rate of real estate growth which is expected to impact the delivery of new cinema screens.”

Among the most awaited films this year is Fox Star Studios' Bombay Velvet, from acclaimed director Anurag Kashyap.

But things could start improving from 2016 onwards with the report predicting total film revenues touching $3.4 billion in 2019, growing at a compound annual growth rate of 10 percent.

Looking at other sectors, the report saw television growing to $7.9 billion in 2014 compared to $6.95 billion in 2013. The industry is projected to grow at a CAGR of 15.5 percent to touch $16.25 billion by 2019.

As in the past, the sector continues to be dominated by Hindi entertainment channels commanding a 31.2 percent viewership share. By contrast, English entertainment channels only had a 0.9 percent share, a marginal reduction compared to a 1.1 percent growth in 2013.

As for the overall size of the Indian entertainment industry, the report estimated total revenues at $17.1 billion in 2014 compared to $15.3 billion in 2013, reflecting a 11.7 percent growth.