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Indian film industry estimated to be USD4.5-5.1 billion by 2011

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The Indian film industry is believed to be growing at a rate of 25 per cent per annum in value terms, and in the next four years it is estimated to reach US$4.5-5.1 billion from its current stand of US$1.8 billion as reported in 2006. These are the findings of the CII-AT Kearney study, ‘The New Economics of the Indian Film Industry: Creativity and Transformation.’

“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 infiltration 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 them to embrace corporatisation and move towards bigger budget movies,” said Saurine Doshi, partner, AT Kearney, India.

Further, “We expect non-box-office revenues to increase three to four times in the next five years driven by multiple customer touchpoints. Box-office revenues are expected to decrease to nearly 75 per cent by 2010, and to 60 per cent by 2020, from 84 per cent in 2006. This is due to the emergence of new channels and increasing touchpoints to access film content, and 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 report also highlights the key issues that need to be addressed if the film industry needs to grow and transform significantly. Some of the issues are – curbing piracy, protecting IP rights, nurturing a talent pool, and globalisation of Indian content.

According to the study, entertainment majors spanning content creation, aggregation and distribution will emerge. Therefore, there will 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.

– Mumbai Bureau

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