The Indian film industry, one of the fastest growing sectors in the country today, is also one of the largest producers of cinematographic films in the world. The Indian film industry accounts for approximately 20% of all revenues among the Indian media and entertainment industries – as part of the services sector, which accounts for more than 50% of India’s GDP. Thanks to the film industry & its diversification.
Despite the high profile of ‘Bollywood’ which is based in Mumbai, film production also has positive spillover benefits to other local economies, particularly Chennai where film production has long been established, with films made in four key southern Indian languages. There are also notable film production activities in Hyderabad, Karnataka, Kolkata and Kerala that benefit the local economies.
Benefits of diversification
1. Boost In Demand & Revenue
Diversifying to international markets has been proven to provide a huge boost in demand and revenue for many mature cinema industries. For example, Hollywood currently derives almost two-thirds of its revenue from overseas markets versus around 18% overseas revenue collected by the Indian film industry. While Reliance Industries was among the pioneers to invest in partnerships with major Hollywood studios such as DreamWorks, others like Eros tied-up with three Chinese film and entertainment companies in May 2015 to co-produce, distribute and promote Sino-Indian films in both countries.
2. Rise of OTTs
OTT is a boon that has opened up the market for a large number of players. At a financial level, less than 20 percent of films breakeven every year. Now, more films will be commercially successful because they will gain Return on Investment (RoI) not only from regular theatrical releases but also with OTT releases, dubbed versions and digital rights sold in different languages.
This will allow producers to spread their risk and has enhanced the footprint of films. Despite the mixed reviews, they will still manage to generate revenue because of such OTT platforms, and that’s what will keep the industry going today. As it is done internationally, bestowing equal importance to theatrical releases followed by OTT releases and satellite releases will be the way forward.
3. Collaborating for new platforms
US video streaming giant Netflix last week said it was in talks with Viacom18, part of the Indian conglomerate Reliance Industries’ media unit Network18, about a multi-year partnership to source content. Several industry experts have said this is one of Netflix’s “biggest moves to create local content in India,” and indicates a future trend for similar content in streaming platforms. Under the partnership, Network18 affiliates would create shows for Netflix to help the US company expand offerings in India, where it competes against the video streaming services of Amazon and Walt Disney Co.
4. Film Tourism
Cinema today plays a significant role in an individual’s life and in some form or manner influences their decision-making. Film tourism is also a concept conceived from the influential value a film creates in an individual’s mind. Like the desire of an individual to wear the similar brand and style of clothes used by the lead cast, or use the products used by the lead cast, the idea of film tourism is to create a desire to visit the location portrayed in the film. Film tourism has a scope to generate $3 billion by 2022 in India, as there is potential for up to 1 million film tourists to visit the country by 2022. The report, ‘Building brand India through film tourism’, points out avenues for collaboration and policy initiatives that the industry can undertake towards making films an effective investment medium to enable destination tourism in India.
For example -In 2008, Ladakh was a noteworthy tourist attraction, but it still hadn’t achieved the cult-status it has today. That year, 400,000 tourists visited it, which was then home to 200,000. Three years later, footfall had quadrupled, and has been rising sharply.
What happened to Ladakh that led to this? ‘3 Idiots’. That’s what happened.
In fact, 50 million tourists decide their destination based on movies.
5. Direct Benefits
Film tourism offers several direct benefits including revenue and employment generation, technology transfer in production, etc. The induced benefits of tourism include awareness and the creation and shaping of attractions.
Why Ask : For film trade or any other trade it’s a well known fact now that,
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