FICCI-KPMG-Report-13-FRAMES

The power of a billion: Realizing the Indian dream
69
Movie 31
Theatrical
Release Date
TV Premiere
Days of
difference
Kahaani March 9, 2012 June 3, 2012 86 days
Ek Tha
Tiger
Son of
Sardar
August 15, 2012 November 11,
2012
November 13,
2012
January 26,
2013
88 days
74 days
Ancillary revenue streams
Rising production costs, global economic slowdown, and
increasing competition for exhibition screens has given
rise to a pressing need for alternative sources of revenue.
Ancillary revenue streams constituted 4.8 percent of film
revenue in 2012 and are expected to contribute 5.7 percent
by 2017 32 . However, these revenue streams will continue
to be a small number relative to box office. Indian cinema is
still very much dependent on the theatrical revenue with 76
percent of revenue coming from this segment. The South
Indian film industry for instance derives 90 percent of its
revenues from theatrical exhibition 33 .
Reflecting a reversal of the trend of showcasing new
movies on GECs, television networks are now premiering
new movies back on the movie channels. They are also
launching strong marketing campaigns to mark the
premiere of movies. For example, Zee Cinema conducted
a strong marketing campaign to drive buzz around the
world TV premiere of ‘Agneepath’. STAR India has also been
strengthening its movie channels ‘Star Gold’ and the newly
launched ‘Movies Ok’ through rebranding and marketing
initiatives.
In-Cinema advertising:
The growing penetration of digital distribution has given
rise to the growth of cinema advertising, giving the
advertiser the flexibility to target a captive audience in the
desired region. Currently an exhibitor’s revenue comprises
70 percent ticket sales, 20 percent food and beverage
and 10 percent cinema advertising. While the proportion
of each is expected to remain the same, the volume in
absolute terms is expected to go up 33 .
Home video
The home video market continued to decline in 2012, with
market size shrinking by 15 percent from INR 2 billion
to INR 1.7 billion 32 . Piracy and the growing popularity of
digital technology are the primary factors leading to a fall
in market size. Moreover, Value Added Service (VAS) and
Video on Demand (VoD) are an evolution of the home video
market and are expected to take away significant share of
the DVD/VCD market. For big budget films with a star cast,
for instance, the number of DVDs sold in the entire country
ranges between 30,000-40,000 33 units only. Niche content
such as lifestyle videos, educational videos and classic
series continues to grow in the home video segment.
Demand for such content has a long tail and has grown at a
CAGR of 20-25 percent from 2007-2012, accounting for 10
percent of total home video sales 33 . Reliance Home Video
and Games for instance has entered into a tie up with the
British Broadcasting Corporation (BBC) 34 to distribute the
latter’s productions in India. The BBC has a large library of
documentaries and classic works. Such content entails
sentimental value for customers seeking to build library
and sales for this genre are expected to gather pace.
31. ‘Bollywood no longer talks of piracy; but ignoring
dangers of online can be costly’, The Economic
Times, February 2013
32. KPMG in India analysis
“
Home video segment is down but not out -
the need for home consumption will always
remain, whether through physical or digital
delivery. While slashing prices have not
been able to combat piracy, it has destroyed
consumer’s value perception of the physical
format. The niche special interest content
is observing robust demand and growing at
20-25 percent. We are investing in the special
interest category such as self-development
and health and fitness content.
“
- Hiren Gada
Director,
Shemaroo Entertainment Ltd.
33. Industry discussions conducted by KPMG in India
34. ‘Reliance Home Video inks distribution deal with
BBC’, Screen.indianexpress.com, May 2012
“
Driven by us and UFO, there has been greater
than 100 percent y-o-y growth in cinema
advertising. Digital scheduling and rule-based
advertising have been pioneered by Qube in
digital screens. But we still have a long way to
go. In India CPTs (cost per thousand) of cinema
advertising are lower than television if you
look outside multiplexes whereas in the US,
the CPT of cinema advertising is three times
that of television. Cinema should at least target
10 percent of television advertising revenues.
The key pain point is that unlike TRPs in
television, we do not have any cinema audience
measurement systems in place and that’s
something we’re working to change.
“
- Senthil Kumar
Co-Founder,
Real Image
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