Cinema faces shrinking sales, new challenges
There may be an occasional boost in box office collections for recent releases like ‘Singham Again’ and ‘Bhool Bhulaiyaa 3’. Both made Rs 260 crore each for the first 20 days. But the overall picture in recent years and months is the Indian film industry is crawling.
There is an obvious crisis of content – again something Bollywood pundits have been wailing about for years. That it has taken two ‘follow-on’ movies of previous hits to save the day speaks volumes for intellectually bankruptcy.
The figures say it all: Box office collections from January to October this year, dropped 7 per cent to Rs 8,951 crore compared to Rs 9,521 crore for the same 10-month period last year, says a report of Ormax Media.
The box office collections for October this year at Rs 994 crore was marginally better than for last October’s Rs812 crore; but it was Tamil films – ‘Amaran’ and ‘Vettaiyan’ – that contributed over 50 percent of the sales.
Slow growth
Ten years ago, with no Covid-19 to factor in, the story was the same. A KPMG report produced for the Federation of Indian Chambers of Commerce and Industry’s (FICCI) annual Jamboree – ‘Frames 2015’ – said the industry’s revenues grew just 0.9 percent from 2013 to 2014.
Theatrical and ancillary revenues for the film industry rose marginally from $2 billion to $2.02 billion (Rs 13,300 crore) as opposed to the projected $2.21 billion (Rs 14,500 crore) in the 2014 report. This was mainly due to weak box office returns. The saving grace then was the Christmas 2014 release of “P.K.” that grossed more than $100 million worldwide.
Nearly a decade later, Ernst & Young (EY), which produced the entertainment industry report for ‘Frames 2024’, said theatrical and ancillary revenue for the industry clocked Rs 19,700 crore for calendar 2023. For 2014, even after factoring in a stronger rupee, film revenue was around Rs 13,300 crore and expected to go up marginally to Rs 14,700 crore in 2015. So where is the growth?
Though industry reports by management consultants like KPMG and EY are usually bubbling and optimistic, in this case even they cannot avoid conceding the stagnation gripping the film industry.
The traditional exhibition formats like single screens, and multiplexes are on the decline. For calendar 2023, this is what EY said: Screen count increased 4 percent, but remained at just 9,742, which shows the cinema experience remains a luxury for most Indians. Admissions continued to decline from 944 million to just over 900 million, a fall of 5 percent; less than 100 million people visited a cinema hall in 2023. Broadcast rights remained soft as film channels struggled with ratings and monetization.
Calendar 2024 will probably be worse than the previous year. As already noted, box office collections are down by 7 percent for the first 10 months. Cinema-going is in the cultural blood of Indians. Yet, why is the industry doing so badly?
Cultural change
The two big factors cinema pundits usually cite are: poor and repetitive content, and a changing ‘entertainment’ culture that is taking eyeballs away from cinema screens. Creative filmmakers lament the drying up of good old storytelling; and its replacement by a scramble to wow audiences with VFX – ear-splitting sound and light effects.
Even pseudo nationalist themes, seen as a window to success, have been flops. The box office tracker, Koimoi.com shows this year’s releases, ‘The Sabarmati Report’ and ‘Bastar: The Naxal Story’ – modelled on ‘The Kashmir Files’, both sank like stones. The EY report says there is no mystery about what content works. it is “mass escapism is what works across audience classes,” and that “80 percent of production houses …expect to see an increase in formula-based films with more ‘masala’ content.”
So the drying up of theatrical revenues is probably a sign of the changing culture of cinema-watching. The old expensive outing to the multiplex, where a family spent more on popcorn and Coke than on cinema tickets is dying away. They have been replaced by instant entertainment – OTT platforms streaming entertainment on TV, laptop and mobile screens.
The problem is: at this crossroads of change, from traditional exhibition to digital releases, the film producers have not quite got their act together on how to monetize their content.
Over 400 films released on digital platforms in 2023, a growth of 30 percent over 2022, says EY’s 2024 report. A BBC analysis said about Rs 4,000 crore a year was being pumped into OTT/digital film production, but the returns were a fraction of what was being spent. The EY report corroborated this stating the industry saw “a relatively muted 8 percent increase in digital rights values over 2022.”
The subscription model is here to stay as families discover their spend on a single multiplex outing can buy them perhaps a year of Netflix. But the industry is also grappling with leakages – where pirated cinema and series are available online or from the local panwalla at a fraction of the cost of a cinema ticket.
This is not to proclaim the death of traditional cinema. The joy of large screen entertainment in the comfort of hi-tech theatres will always be sought after. The theatre will become smaller. The challenge on how to monetize the digital changeover, bigger.