The economics of film producers has improved due to digital rights. The price of digital rights of popular/urban-centric movies is comparable to that of satellite rights
There is no denying that 2018 was a notable year for the film industry in terms of business, subjects and new talent. Some of the trends demand the industry's attention in 2019 as well.
That Hollywood and regional films are gaining traction in India is not new. But last year was a new high for the segments.
According to a recent report by Kotak Institutional Equities, Hollywood and regional box office remain bright spots. The contribution of English and regional movies to PVR’s ticket sales increased to 42 percent in CY2018E from 40 percent in CY2017, the report said.
It further added that a pick-up in regional box office, led by multiplex penetration, and a continued rise in the consumption of Hollywood movies are the two key trends that are expected to continue in the future.
According to the report, amid the top 20 Hollywood movies, 50 percent do not receive much traction and this is an opportunity industry players can tap into. The animation genre especially has not been able to woo Indian audiences to a great extent.
Another trend to note is that along with word-of-mouth influencing box office numbers, social media has also amplified its impact. While films like Thugs of Hindostan, Zero and Race 3 saw an adverse effect due to negative reviews on social media, positive feedback aided the business of movies like Simmba, Stree and Raazi.
The report adds that that the economics of film producers has improved due to digital rights. The price of digital rights of popular/urban-centric movies is comparable to that of satellite rights, the report said.
Elucidating on this, the report provided the example of Thugs of Hindostan that potentially made 55 percent return on original investment (ROI) despite disappointing box office performance due to pre-sale of digital/theatrical rights and overseas rights.
In addition, offshore collections of Indian movies, especially in newer markets like China, is a positive for film producers.Additionally, the success of Hindi versions of a few regional films (2.0, KGF, Baahubali 2) over the past two years is an encouragement for the film industry to produce more domestic crossover films.