MUMBAI: India’s one billion people spend close to Rs 80 billion ($2 billion) on movie tickets each year, a figure which is expected to grow by 30 per cent over the next five years according to a new report, Cinemagoing India, published by industry analysts Dodona Research.

India is widely regarded as having a cinema market with huge potential. However, while there are major cities with growing, affluent middle classes prepared to spend on leisure; India also has a large and poor rural population.

Dodona Research research director Katharine Wright said, “The Indian market is like an elephant in the room. It’s too big to ignore, but all too often hype takes the place of solid, accurate information and analysis. We have produced Cinemagoing India to fill the information gap and provide an accurate report for those seeking to identify new opportunities, evaluate current strategies or keep up with developments in what is already the world’s third largest cinema market.” < Page Break >

Investment in the cinema industry continues with many new multiplexes opening and replacing older venues. Whilst this is a positive move for the industry, development costs are high and as a result, admissions are falling due to the increase in ticket prices. Box office revenues, however, are on an upward trend as multiplex operators charge substantially more for the high quality cinema-going experience they offer.

For distribution purposes, India is divided into seven territories and distributors bid for territory rights. However, few distributors have a pan-regional presence. High print costs mean that only a small number of each film is printed and subsequently distribution is staggered, starting with the major cities. The introduction of digital cinema is changing this, as the technology means cinemas in B and C distribution centres are now able to show good quality films, at the same time as they are released in A centres. This is also helping to reduce piracy, and exhibitors with digital systems have reported much higher occupancy rates as a result.

Most international awareness of the Indian film industry is of the Bollywood industry around Mumbai, which produces around a quarter of India’s total film output each year in Hindi, and captures an estimated 40 per cent share of the market, the rest being made up of films in other Indian languages. The Indian film industry also has a large export market. Nearly 99 per cent of exports are Hindi films, and international rights can account for up to 20 per cent of a film’s total revenues.

Wright concluded, “India is still in the preliminary stages of transforming its cinema infrastructure, but with a successful home grown film industry, investment in multiplexes and digital technology, and a growing middle class, it is an industry with a bright future.”