Although India is still severely under-screened with fewer than 10,000 screens to serve its 1.3 billion population, distributors, exhibitors and producers are very confident the market will grow.
That optimism is fuelled by a number of factors including the continuing rise of the middle class; the ongoing roll-out of new cinemas, particularly in neglected regional cities and towns; and the replacement of entertainment taxes on tickets with the generally lower impost of a 28% goods and services tax.
Nonetheless, piracy remains a thorn in the side of the cinema business and bureaucratic red tape can retard approvals for new screens.
“I am optimistic about India with its growing middle class and large English- speaking population who have a high propensity for entertainment and moviegoing, and the opening of new shopping centres with proper multiplexes," says Andrew Cripps, President of International Theatrical Distribution at 20th Century Fox.
“We have seen some encouraging signs from INOX Leisure, Cinepolis, PVR Cinemas and others and but it is still is a vastly under-screened market and challenges remain. It is still very difficult and time-consuming for exhibitors to get approvals to open screens, piracy remains an issue and taxes can be very high."
Last year India’s second largest multiplex operator INOX Leisure unveiled plans to nearly double the size of its circuit from about 500 screens to 976 screens.
Currently the biggest exhibitor, PVR Cinemas has 625 screens at 134 locations in 51 cities. By June 30 2018, the company expects to have around 660 screens.
“We are very bullish on future prospects," says PVR Cinemas CEO Kamal Gianchandani. “The film business has always been cyclical. The last two years have been muted but we expect an uptrend in the next two to three years."
India has around 9,500 screens of which around 2,750 are in multiplexes and the rest single screens, often in poor condition. Each year sees the addition of about 300 multiplex screens, partly offset by the closure of 200 single screens.
“We need around 50,000 high-yield screens in India to unlock the full potential of the Indian market," says Rohan Malhotra, Vice President of YRF Distribution, a division of Aditya Chopra’s production powerhouse Yash Raj Films.
“PVR Cinemas, INOX and Cinepolis have been investing in building infrastructure, which is fantastic, but the pace of growth can be much better. We also need a stable tax regime; rebates and exemptions for producing high quality content so we can effectively export Indian content to worldwide audiences; rebates, exemptions and easier licensing norms so improve the pace of building cinema infrastructure; and stronger anti-piracy laws and widespread implementation of these laws by the enforcement agencies."
YRF’s latest blockbuster, Tiger Zinda Hai, is an action-thriller co-written and directed by Ali Abbas Zafar and stars Salman Khan, Katrina Kaif and Sajjad Delfrooz. A sequel to YRF’s 2012 hit, Ek Tha Tiger, it has amassed 431 crore ($US67.87 million) in India and 129 crore ($20.32 million) in the rest of the world.
“We’re thrilled with the overseas performance of TZH, “says Avtar Panesar, Vice President of YRF International Operations. “The first was a love story and this really takes a more action-packed approach and yet the NRI (non-resident Indians) have embraced it. Of course the film has family elements too but for a largely an action film, the numbers are delightful."
YRF executives are confident about their upcoming slate which includes Siddharth P. Malhotra’s Hichki, starring Rani Mukerjee as a woman who turns her biggest weakness into her biggest strength (which opens on March 23); Dibakar Banerjee’s Sandeep Aur Pinky Faraar, which stars Arjun Kapoor and Parineeti Chopra (August 3); Sharat Katariya’s Sui Dhaaga: Made in India, which features Varun Dhawan and Anushka Sharma (September 28); and Vijay Krishna Acharya’s Thugs of Hindostan, with a cast headed by Amitabh Bachchan, Aamir Khan and Katrina Kaif (November 7).
Nandu Ahuja, Senior VP – India Theatrical, Eros International Media Ltd welcomes the expansion plans of INOX and other multiplex chains as a positive indicator for box office growth. These new screens will mostly be in tier 2 and tier 3 cities which are severely lacking in cinemas.
Ahuja believes piracy can be countered by making content legally available at the right price points simultaneously across the country’s cinemas, which will require adding more screens and distributors arranging wide releases for most titles.
The replacement of entertainment taxes with the GST is largely beneficial for the theatrical box office overall and has reduced complicated entertainment tax laws/rates which differed from state to state, he says.
“We are positive about the overall theatrical industry. With the planned increase in screens, simplification in taxation and rising middle class, we are confident that the growth prospects for the box office bode well in the coming years," Ahuja added.
Shobha Sant, CEO of Bhansali Productions, had first-hand experience of piracy with Padmaavat, a period action drama directed by Sanjay Leela Bhansali. The film starring Deepika Padukone, Shahid Kapoor and Ranveer Singh was released in January throughout India except for several states, where large numbers of the potential audience watched it on pirated prints.
“It’s not enough to restrict piracy, it’s important to educate the audience that they are killing the film industry by watching pirated films," she says. “It’s a responsibility, one that needs to be taken far more seriously."
Sant has been encouraged by the BO success of a wide range of Indian films including three comedy/dramas, Amit V. Masurkar’s Newton and Saket Chaudhary’s Hindi Medium and Shree Narayan Singh’s Toilet Ek Prem Katha, which centred on a woman who leaves her husband on the first day of their marriage after discovering he doesn't have a toilet.
“The audience has become conscious of what they are willing to pay and watch with a whole new world available to them at their convenience with the emergence of the SVOD/TVOD platforms," she says. “Now the fight at the box office is not just film-to-film, but film competes with sports, mini-series and films that they can watch at home with no commercial interruptions at reasonable pricing. The audience for films/content has increased but not necessarily in theatres."
Cripps believes the Indian market overall was up marginally in 2017 and is still dominated by local content. “With proper dating and marketing, dubbing into local languages and selecting the right content for the market we can continue to grow an audience for Hollywood content in India," he concludes.