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The media and entertainment (films, television, print and radio) market of South India is estimated at Rs 19,000 crore. On the back of sustained demand and evolving content across different media platforms, this market is expected to grow at a compounded annual growth rate of 14 per cent — and likely to cross Rs 32,000 crore by 2015, according to a recent study conducted by Deloitte for the Federation of Indian Chamber of Commerce and Industry (FICCI).
According to sources, South India's film industry is pegged at Rs 2,000 crore. Of this aggregate market, Tamil and Telugu films chip in almost equally, about 45 per cent each. The rest comes from Malayalam (8 per cent) and Kannada (2 per cent).
Mr Anandan, an industry veteran better known as ‘film news' Anandan, says that the Tamil film industry on an average produces around 200 films a year. Of this, over 65 per cent are big-budget films (any film that costs Rs 7 crore and above is considered a big-budget film), and remaining 35 per cent fall in the small-budget category. However, a significant number of films produced are not released in the theatrical market owing to lack of market interest. “Even among the films that are released, over 95 per cent of the films fail to recover their costs — they barely recover their print and publicity costs,” says Mr Anandan. The Telugu film industry is the most prolific producer of films in the South. On an average, the industry produces around 250-270 films per year. Like the Tamil industry, a significant number of films do not make it to the theatrical market. The success ratio too is low and a large percentage of films fail to recover the cost.
The Malayalam film industry is relatively much smaller than its counterparts. The industry, on an average, produces 70 to 90 films a year. Again, even here, most of them are not released, and most of them fail to be commercially successful. The uniqueness about this industry is that the budget for most films is relatively smaller. Here, if a film's production cost exceeds Rs 4 crore it will be considered a big-budget film. And such big-budget films do not exceed 50 per cent of the total films produced in a year.
In Karnataka, the Kannada film industry produces around 150 films a year. But, for these films there is no big market beyond Karnataka.
Largest share in country
For South India's films, the domestic theatrical segment is by far the most dominant stream of revenue — accounting for nearly 75 per cent of the total revenues earned.
According to a study by Ernst & Young, revenues from cable and satellite (C&S) television rights come next in the list — contributing 15 per cent of the total revenue. This is followed by global theatrical rights (5 per cent), home video and music rights (3 per cent) and the rest comes from other sources. Revenue from merchandising, in-film advertising, mobile and Internet properties are yet to become significant contributors.
In the domestic theatrical scene, Tamil and Telugu films have markets beyond their home turf. As there are good number of Tamil-speaking people living in Andhra Pradesh and Karnataka, and Telugu-speaking people in Tamil Nadu and Karnataka, many Tamil and Telugu films are screened in neighbouring states too. Some successful Malayalam films are also screened in Tamil Nadu. South India's film industry accounts for the largest share of films produced in the country — both in terms of value and volume. Mr Kandaswamy Bharathan, Executive Director of Kavithalayaa Productions P Ltd and visiting professor of IIM-A where he teaches film industry management, says that the international theatrical market potential for South India's films is under-tapped.
He says some of Rajinikanth's films such as ‘Muthu' proved to be great success in a country like Japan. ‘Muthu' was the first success story of an Indian film in Japan “effectively marketed by us”, he says.
The success was followed by other films such as ‘Sivaji' and ‘Enthiran' globally. He says the industry needs a more organised international distribution network and marketing abilities. Talking about the cost structure here, he said surge in the film production cost is the single biggest challenge the industry is facing today. The costs of the industry have increased manifold. In comparison, the industry's revenues have grown only at a modest pace.
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