Monday, December 31, 2007

4 Billion profit for Bollywood in 2007

Detours from convention, digitisation and a ringing till! Bollywood never had it so good.

The year 2007 rained largesse on the world's second largest movie industry with hits like "Chak De! India", "Bheja Fry" and "Taare Zameen Par", three medium-budget movies with rather unconventional plots. Bollywood raked in a profit of Rs 4 billion. And there's quite a lot that's waiting to happen in 2008.

"In my opinion, 2007 will be remembered for a Hollywood Studio's (Sony Pictures) first Indian venture 'Saawariya'. The film grossed over $19 million, which was more than recovering the cost of production," Vikramjit Roy, head of publicity, Sony Pictures Releasing India, told media.

Vikas Mohan, editor of Mumbai-based trade magazine Supercinema, said Bollywood's profits this year were not more than Rs 4.5 billion. "Although corporate houses claim that investment in Hindi films was over Rs 6 billion, actual investment was about Rs 4.5 billion and we have doubled the money we invested in films," said Mohan.

The Rs.8,400-crore Indian film industry is expected to touch the Rs 17,500 crore mark by 2011, said a FICCI report on the industry, prepared by PricewaterhouseCoopers. Corporatisation and digitisation are going to be the important factors in taking the industry to a greater height, the report added.

Although regional cinema industry barring Tamil, Telugu, Kannada and Malayalam films is not growing at the same rate, digitisation will open new avenues for them as well.

India's economic boom has expanded the consumption list of the middle class, which is expected to push up industry profits. India's one billion people spend close to Rs 80 billion ($2 billion) on movie tickets each year, a figure expected to grow by 30 per cent over the next five years, said a new report, Cinemagoing India, prepared by Britain-based analyst Dodona Research.

Another major change that has taken place is that India has emerged as a cinema market with huge potential. Shekhar Kapur, the Hollywood-based Indian director, was quoted as saying that Asia was no longer a hub for ideas but a huge market for many international releases.

"For many international releases today, where 80 per cent of the revenue was earlier coming from the US box office, today it is only a third. Two-thirds are pouring in from outside US markets. And in future, this would do down to just 10 percent.

"European economy today is middle-aged. India and China are bringing in the young audience. The balance of 90 percent will come from the young markets and people understand that," Kapur said.

Another important change that the director of "Elizabeth, The Virgin Queen" pointed out is the multiple revenue streams and changing consumption pattern.

"Not just a shift in consumption, but there has been a shift in the pattern of media consumption as well. From being back office boys or doing 'second hand' work, Mumbai and Singapore are the next hubs. We have the markets here, a large talent pool and a lot going for us - it has to happen that way," Kapur said.

"Today, it is obsolete to not include changes in the digital space. Something like YouTube can really wake you up. What did Lilly Allen do? She put her song on MySpace, it became the number one there and then Sony BMG came to her. She didn't go to them!

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