Beyond boycott calls on social media, there seem to be several factors at play because of which viewers are spending less on Bollywood/Hindi films. Interestingly, South films, including their Hindi-dubbed versions, have done exceptionally well in the last few years well while Bollywood movies have struggled to find viewers. 

Before the pandemic, the average collections of 70-80 Hindi films released in a year used to range between Rs 3000-5000 crores. The collections have dropped drastically for Bollywood movies since the pandemic. From January 2021, a total of 61 Hindi movies (including South/English dubbed in Hindi) were released till August 11, 2022. These films had a total collection of around Rs 3200 crore of which nearly 48% of collections came from 18 dubbed movies, according to a report by SBI Research team led by Dr Soumya Kanti Ghosh.  

The popular perception behind Bollywood’s poor show is that the industry is losing its connection with the current generation of movie watchers and producing bad films, one after another. While this may be one of the reasons why viewers are spending less on Hindi cinema, there are several other causes, including financial ones as well. In an interesting report released today (26 August 2022), the SBI Research team pointed out all such reasons. Take a look:

Costly ticket prices and decline in single screens

Because of the decline in single screens, most films are now getting released in multiplexes where ticket prices are three to four times more than single screen theatres. South movies have an edge over Bollywood as 62% of the total single-screen theatres in the country are in South India. North India has a share of only 16% followed by West with 10% of all single-screen cinema halls. “This could also be the reason why South Indian movies (in domestic area) are generating more revenues than Bollywood movies,” the report says. 

High entertainment tax on Hindi films

Ticket prices are high also because of the high entertainment tax on Hindi movies. According to the report, except for a few states like Himachal Pradesh, Punjab and Rajasthan, the entertainment tax fall in the range of 15-60% in all the remaining states. In Mumbai, which is the most important centre for Bollywood, the entertainment tax rate is 45% for Hindi films. Uttar Pradesh has imposed a whopping 60% tax on Hindi films. 

The tax on regional language films is less. For example, there is a 0% tax on Kannada films in Karnataka and 0% tax for Tamil films in Tamil Nadu. In Andhra Pradesh, the tax on Telugu films is just 15%.

Behavioural and Demographic changes

Changing demographic profiles and behavioural changes across the states are also affecting Hindi films. The report says that millennials these days use online platforms to watch movies of their favourite genres. They prefer to wait for new movies to watch from the comfort of their homes at any time. With most of the millennial population in the North, changing movie-watching habits of people is affecting Hindi films. 

In contrast, a higher share of the elderly population in South Indian states appears to be benefitting South movies as well. “For example, South movies are doing better compared to Bollywood movies. South Indian states have higher share of elderly people who would still prefer watching movies on big screen in theatres than on OTT platforms,” the report noted. 

OTT and Technology 

The emergence of OTT has disrupted the entertainment industry. Currently, OTT shares 7-9% of the entertainment industry. It is expected that by 2023, there will be 50 crores OTT subscribers in India. 

“The rise in OTT is expected to eat into cinemas viewers and profits, as more than 50% of the people use OTTs more than 5 hours each month. What’s more, major studios have realized creating streaming series and movies is far more profitable than traditional filmmaking, especially if they build their own streaming platforms,” the report says. 

With options like Smart TV and Chromecast, the cinema viewing experience at home has gone up to a different level. The report says that improved technology has led to reduced footfall in movie theatres.  

Poor content from Bollywood

Lastly, the quality of films produced by the Hindi industry is not resonating well with viewers and film analysts. The report says that the average rating of 43 Hindi movies since January 2021 was just 5.9 on IMDB while the average rating of 17 Hindi-dubbed South movies was 7.3. 

“It is generally assumed that a ‘GOOD’ movie will be bestowed with ‘GOOD’ rating and also with ‘GOOD’ collections (exceptions are also there). The average rating of 43 Hindi movies since Jan 2021 was just 5.9, way below the 7.3 rating of 18 Hindi dubbed movies. A simple regression exercise indicates that an extra one point IMDB rating leads to Rs 17 crore more collections,” the report says.