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Indian film industry’s gross box office collection is likely to be USD 3.7 billion (Rs 24,684 crore approximately) in 2020 from the current level of USD 2.1 billion, said Deloitte Touche Tohmatsu India LLP (DTTILLP) in a report.
“In terms of revenue, the Indian film industry has gross box office realizations of USD 2.1 billion which is expected to grow at 11 per cent CAGR reaching USD 3.7 billion by 2020,” stated DTTILLP in a report. The report was released on Sunday at an event in Hyderabad’s Ramoji Film City.
The Indian film industry is the largest in the world in terms of number of films produced with 1,500-2,000 films produced every year in more than 20 languages.
The key growth drivers for the industry are increasing per capita income and growing middle class. Besides, there is demand from Tier 2 and Tier 3 cities.
The other factors for growth are the industry’s diversification into international markets, releasing the potential of digitization, upside from ancillary revenue streams and upcoming use of Visual Effects (VFX) in movies.
The report said that despite the large number of films produced in India, the industry gross realization has been substantially lower than its global counterparts.
For example, the box office realization in the US and Canada stand at USD 11 billion whereas these countries produce significantly lower number of films (about 700 films).
According to the report, the main challenges facing the film industry are low infrastructure, 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.
The domestic box office contributes a 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 are expected to grow at a CAGR of about 15 per cent over the period FY15–FY20.
Further, the industry is dominated by Bollywood, the Hindi film industry, contributing 43 per cent of the revenue while the regional films contribute the remaining 57 per cent.
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 in India.
It said that the other trends in the industry include foreign films gaining share in the Indian industry and entry of international studios through acquisitions.
Going forward, the industry needs to focus on film tourism, skill enhancement, shortening window of release through better planning, updating current technology, countering piracy and growth of multiplexes, to ensure growth and profitability.
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