The Hindu Business Line : Film industry poised for big growth: Study

Digitisation will lead to expansion of large scale exhibition networks and expansions of multiplexes and large exhibition chains into tier II and III cities.

Our Bureau

Mumbai, Nov. 26 The Indian film industry, which was around $1.8 billion in 2006, is expected to grow at more than 25 per cent per annum in value terms for the next four years to reach $4.5-5.1 billion by 2011. These are the findings of the CII-AT Kearney study on ‘The new economics of the Indian film industry: creativity and transformation’, released at CII’s ‘India – The Big Picture’ conference in Goa recently. Films are the genesis of an entire economic chain dedicated to bringing entertainment to an audience. They have the highest inter-linkages with other mainstream media and entertainment segments, such as TV and Music, and hence the focus of the study.

The study aims at focusing on a crucial aspect of the creative industry, a cornerstone of the M&E sector – films – and explores the emerging business models for the Indian film industry, the study said.

“The Indian film industry is on the threshold of a transformation driven by digitisation and changing customer preferences which will have a significant impact on business models — both within and across the media and entertainment value chains.

Digitisation will lead to expansion of large scale exhibition networks and expansions of multiplexes and large exhibition chains into tier II and III cities. This is going to alter the balance of power with large production houses and force the production houses to embrace corporatisation, and move towards bigger budget movies,” said Mr Saurine Doshi, Partner, A.T. Kearney India.

“We expect non-box office revenues to increase three to four times in the next five years driven by multiple customer touch points. Box office revenues are expected to decrease to nearly 75 per cent by 2010 and further to 60 per cent by 2020 from 84 per cent in 2006.

This is due to the emergence of new channels and increasing touch points to access film content, penetration of home video, Internet media and mobile. Our study showed that more than 70 per cent of urban and more than 30 per cent of tier II/III population access film content on their mobiles,” he added.

The CII-AT Kearney report also highlights the key issues that need to be addressed if the industry needs to grow and transform significantly.

Some of the issues are: curbing piracy, protecting IP rights, nurturing a talent pool and globalization of Indian content.

According to the study, entertainment majors spanning content creation, aggregation and distribution would emerge (a model not encouraged elsewhere by law to avoid restrictive trade practices).

Therefore, there would be integration between film production, distribution and exhibition across production houses, organised theatre chains and cable network operators.

The study indicates that the industry has already started mirroring some of these business models.

The transformation will impact the entire value chain of the film industry.

The study highlights the various opportunities for exhibitors, traditional distributors, production houses, home video aggregators, satellite broadcasters, cable TV distributors and music publishers.

The study also highlights the change that the new media such as mobile, Internet and IPTV can possibly bring over the next few years.

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