Let us take a look at the real reasons for being bullish on the Indian film industry.
More that one source of revenue
The industry today has more that just the box office to rake in the money. Even Movie production and revenues are fast evolving. Gone are the days when distributor fees was the primary source of revenue for producers. Sources like music rights, overseas distribution rights, satellite telecast rights and in-movie advertisements are increasingly becoming the dominant revenue source. Even in distribution, big banners like ADLABS, Mukta Arts, Cinevista, UTV are able to pre sell their rights before the commencement of production, thus extenuating the risk to a large extent.
“Growth is definitely there and I would say that this deep rooted tree is finally beginning to branch out. Lots of avenues are breaking out with alternate revenue streams of content being produced,” stated Atul Goel, CEO, E-City.
In fact, today a movie gets only 50 percent of the revenue from the box-office. The balance comes from non-theatrical revenue. This means that in actuality, only 20 per cent of the releases per year lose money. Increasingly today, filmmakers are looking at tapping other avenues like online games, mobile games, etc, even before a movie is released, which then act as additional revenue model.
Saurabh Srivastava, Executive Chairman, Xana India Ltd assert, “Venture Capital today is $ 2 billion in India and India is the world’s top three destinations as far as VC is concerned. This has a huge implication on the entertainment industry, which like software and technology has the potential to grow to global levels. There needs to be a huge emphasis on making money in the entire value chain and also be transparent. The Indian film industry will have to do many things by itself like setting up copy-write laws, training institutes and so on. And this will lead to its further growth.”
Digital Cinema - The growth driver
The next big bang in cinema undoubtedly will be digital technology - interactive television, Video on-demand, and screening of digital content will drive the growth for Indian cinema biz. Quentin Staes-Polet, Director, Digital Media, Asia Pacific, IBM Business Consulting Services, says, “The onus of transformation to digital is upon us and we should be ready for the threats and the opportunities it will bring along. As India has just under 0.5 per cent of broadband penetration, one can expect more action from here. Product placement will be the key to move ahead and thus move to the newer technologies like the iPod, Web, TiVO and so on.”
Industry more corporatised and more professional
These are very exciting time for movies. And to share in the success of the Indian film industry, largely corporates and the banks too are showing their willingness. Says an industry expert, “As it is public knowledge there without a doubt is some tainted money in this industry but corporatisation is surely a good bet to bring about some change if not a sea change in Bollywood and help change its current funding patterns. Having said that, filmmakers as they have already proved are capable of making films without the support of institutional finance.”