Indian film industry to grow at 25%: CII-AT Kearney

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Chennai, Nov 23 : The Indian film industry is worth around $1.8 billion in 2006 (around Rs 7,500 crore) and is expected to grow at 25% per annum in value terms for the next four years to reach $4.5 to $5.1 billion (around Rs 20,000 crore) by 2011, said a report by CII-AT Kearney on '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 expansions of multiplexes and large exhibition chains into tier II and tier III cities. This is going to alter the balance of power with large production houses and force the production houses to embrace corporatization and move towards bigger budget movies," the report said.

"We expect non-box office revenues to increase three to four times in the next five years driven by multiple customer touch points. Box office revenues are expected to decrease to nearly 75% by 2010 and further to 60% by 2020 from 84% in 2006. This is due to the emergence of new channels and increasing touch points to access film content, penetration of home video, internet media and mobile. Our report showed that more than 70% of urban and more than 30% of tier II/III population access film content on their mobiles," said Saurine Doshi, partner, A T Kearney India.

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 globalization of Indian content.

According to the report, entertainment majors spanning content creation, aggregation and distribution would emerge (a model not encouraged elsewhere by law to avoid restrictive trade practices). Therefore, there would be integration between film production, distribution and exhibition across production houses, organized theatre chains and cable network operators. The study indicates that the industry has already started mirroring some of these business models.