Bollywood booty breaks billion-dollar barrier

New Delhi, Dec 30 | Updated: Dec 31 2006, 05:30am hrs
This year has been huge for Bollywood in terms of box office collections. According to Adlabs head honcho Manmohan Shetty, the revenue figures notched up by the Indian movie industry in 2006 was estimated to be $1.5 billion. In 2007, the worlds largest film producing nation could do better.

The compound annual growth rate of the Hindi film industry is expected to be 25% in 2007, says Mahesh Ramanathan, CEO, Percept Picture Company.

Films (big or small) no longer depend only on one avenue for revenues film producers have found several ways to recoup their investment from satellite rights, in-flight entertainment rights, music and overseas rights to home video and merchandising. Most filmmakers can actually make their money before the release.

Says Ramanathan: Non-traditional sources of revenues will contribute to a significant amount: given that films have earned as much as Rs 1 crore from wireless rights. Airborne rights are also gaining in importance and there is a lot of revenue there. Overseas box-office will grow as more prints of films will be released globally, and might contribute to 40% of a films revenue. Internet-based rights (movie/music downloads) are big sources of revenue.

With film producers gradually realising the net worth of a film and film downloads becoming legal and affordable, it's a matter of time before more filmmakers tap that avenue.

Music downloads/ mobile downloads have given the Hindi film music industry a much-needed boost in 2005-6. Production houses are venturing into the home video/movie downloads sector themselves for more revenue. Five years ago we had 40 million satellite homes, today we are hoping to touch 70 million, so satellite rights are crucial and going to fetch us big revenues. In the overseas sector about 20% growth could be expected by 2007. Another thing that will drive the growth of revenues is the growth of multiplexes, says Ravi Gupta, CEO, Mukta Arts.

There will be 40% more multiplexes in 2007. Most big production houses will have three/four releases that are expected to earn big money. Net downloads of films, video-on-demand, home video, satellite rights add to the numbers. It will be a big year, hopefully, for the Hindi film industry, feels Aasish Saksena, COO, Film Cell, PVR Cinemas.

But Bollywood still has miles to go. In 2005, Hollywoods US box office collections alone were $8.99 billion. In comparison, the Indian box office took in $1.14 billion. Unlike Indias buoyant software industry or its booming real estate market, which has attracted an estimated $6.3 billion in foreign investment, the Hindi film industry has not made it easy for Hollywood studios to gain access or finance their films. It is another matter that a company like Infosys did almost as much in sales in 2005 as all of Bollywood.

The happy news is that if 2006 has been a bountiful year for the Hindi film industry that has earned Rs 650 crore from theatrical revenues, and Rs 1,500 crore from film exports, the year 2007 will be much bigger.