New Avenues of Revenue in Indian Cinema

Abstract

India’s media and entertainment industry is of $23.9 billion in 2018 and is projected to reach $33 billion by 2021 [7]. Of this, $2.47 billion is the share of Indian film industry [7]. Film industry produces as many as 1600 films per year. 74% of revenue comes from home box office and 7% from overseas. Other sources of income account for as high as 19% (“Technology, Media and Telecommunications”, 2016). In film industry, primary source of revenue till date is home box office collections. However, state of affairs is changing of late; where the film producers started searching for innovative avenues of revenue generation as the film making cost is rising hugely and the risk involved in movie making is going up. To list a few innovative sources of revenue goes like this; film-based merchandising, co-branding, brand associations, in-film advertising, home video, global marketing opportunities, digital platforms, broadband movie release, etc. Here comes the question, do Indian cinema really need some new sources of revenue when the industry is already making strong business? Of course, yes. Dependence on box office revenue alone means that successful outcome of the movie alone can save the producer. 2017 is one such year for “Bollywood” (name used for Hindi language movie industry), where as good as 90% of the movies are failures at box office (“Only Two Blockbusters”, 2018). In 2018, a movie titled “2.0” costed film makers $82 million, and it went on to collect $115 million from the box office. Since 2017, there are the minimum seven to eight films that costed producers $30–50 million. Given rising production budgets, people involved in film production to distribution are safe only when the film fares well at the box office. However, on the downside if the film flops, entire money is lost. Having discussed the need of new sources of revenue for Indian cinema, this paper would give a detailed account on various other sources available in Indian cinema.