FICCI-KPMG-Report-13-FRAMES

66 The power of a billion: Realizing the Indian dream
The exponential growth in domestic theatrical revenues
can be attributed to the growth in number of screens via
growth of multiplexes, coupled with increased ticket prices
and delivery of robust content that appealed to both, the
multiplex and single screen audiences.
“
We are observing a definitive change in
consumption pattern of our patrons. Not only
there is a surge in footfalls, but patrons are
also frequenting theatres more often. Because
of these factors, 2012 has been a good year
for film entertainment business and if the early
signals are anything to go by, 2013 already
looks quite promising. January to March is
typically a lean period, however, we have seen
a tremendous surge in February admissions
due to a persistent supply of quality films. We
are looking forward to a very strong 2013
“
- Mr. Kamal Gianchandani
President,
PVR Pictures Ltd.
Shortening of the movie shelf life
First week business has increased driven by the wider
release and number of prints. The first week and weekend
contribute almost 60-80 percent of a film’s total collection 14 .
Even within the first week, the trend is getting skewed
towards the weekend. Considering this, multiplex chains
are experimenting with pricing models to maximize
revenue. By adopting a differential pricing strategy for
weekdays and weekends, they are able to maximize
footfalls across the week.
Hollywood also claims a share of the pie
2012 proved to be a blockbuster year not only for Bollywood
but also for Hollywood films in India. The share of
Hollywood movies in gross box office collections increased
to 8.5 percent in 2012 with total collections of INR 9.5
billion 18 . A wider distribution network due to digitization,
growth in multiplexes and robust marketing has aided the
growth of Hollywood content.
However for a movie to garner revenues on a large scale
it is important to attain a pan India reach and the dubbing
of Hollywood movies in regional languages such as Hindi,
Tamil and Telegu has achieved that. Currently, English
movies derive 35 percent of their revenues from dubbed
formats 14 .
The number of screens available for releasing a film is also
rising, aided by greater use of digital prints. It is estimated
that close to 77 percent 14 of screens have been digitized.
The main driver behind this is the huge price difference
between digital and physical prints, which now makes it
affordable for a distributor to release a greater number
of prints for a film. Big-budget movies are now released
across as many as 3,500 screens now as compared to
1,000 three years ago.
Revenue split of regional market for
Hollywood films - 2012
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Movie
Hum Aapke
Hain Kaun
Year of
release
Number of
screens for
theatrical
release 15
Growth
1994 500 -
3 Idiots 2009 1,000 2x in 15 years
Dabangg 2 2012 3,500 3.5x in 3 years
To cash in on the increasing footfalls and maximize profits,
multiplex operators have increased ticket prices by 15 to 20
percent 16 . The average ticket price for multiplexes is now
INR 160, compared with INR 60 at single screens 14 . This has
not impacted the occupancy rates. In fact, the footfalls at
PVR cinemas have increased by around 38 percent 17 from
December 2011 to December 2012.
14. Industry discussions conducted by KPMG in India
15. ‘Bollywood no longer talks of piracy; but ignoring dangers of online can be costly’, The Economic
Times, February 2013
16. ‘B-town on a roll’, Business Today, September 2012
Source: Industry discussions conducted by KPMG in India
Innovative marketing strategies used by Hollywood studios
have provided a fillip to growth. Many studios have tied
up with local brands such as McDonalds, MCD, Crax Corn
Rings, Perfetti Alpenliebe Swirl, LG Electronics 3D TV to
promote their films 19 . The increase in number of 3D screens
is also a driving factor for popularization of English films.
In 2012, The Amazing Spider-man was released with 1236
prints in four languages - English, Hindi, Tamil and Telugu in
2D, 3D and IMAX formats 19 . The box office collections are
usually in favour of 3D movies. As per industry estimates,
for films which are released in 3D and 2D prints, box office
collections are shared in the ratio of 6:4 14 .
17. PVR Ltd. Quarterly report ended December 2012
18. KPMG in India analysis based on Industry discussions
19. ‘Hollywood on an aggressive mode to market their films in India, bets big on brand tie-ups’, Business
Today, July 2012