Cinemagoing in India - Latest research from Dodona

http://www.digitalcinemainfo.com/dodonaresearch_01_20_09.php

January 20, 2009

Source: Dodona Research

Claims that four billion Indians a year visit the movies are questioned by Dodona Research in its latest report, Cinemagoing India. Instead Dodona estimates that cinema admissions in India are in the region of 1.5 billion, with admissions to ‘Bollywood’ films outside the country adding a few tens of millions more.

These radically lower estimates than those usually quoted are the result of comparing data from a range of sources, and casting a sceptical eye over the results. Dodona observes, for example, that while the number of cinema screens in the country has fallen sharply in recent years, paradoxically admissions estimates have climbed. Not only is this counter-intuitive, it results in numbers of movie-goers which exceed the seating capacity of the country’s cinemas.

Despite concerns about the quality of data coming out of the country, Dodona remains positive about the prospects for the market. India is in the middle of a multiplex boom, with aging traditional cinemas being supplanted by new multiplexes. There are now 1,350 multiplex screens compared with 80 at the end of 2002, and they are estimated to account for approximately 190 million admissions.

With India’s emerging middle class migrating to the new multiplexes, traditional cinemas are having to rely increasingly on a lower income and rural market – and must also contend with rampant film piracy. The result has been a swathe of closures, with more than 3,000 screens closed since 2002. The 7,650 remaining traditional screens are estimated to have welcomed 1.3 billion guests in 2007.

This wave of cinema closures would spell disaster were it not for the fact that the new multiplex cinemas are charging much more for tickets than traditional rivals – an average of 88 rupees ($2.15) compared to 27 rupees ($0.65) in 2007. From this perspective, Dodona argues that rather than being an exceptional case, the Indian cinema industry is undergoing a highly typical pattern of transition familiar from other markets. The key elements in this are the repositioning of cinema from serving a mass audience to focusing on a smaller middle class one, and a consequent shift in audience taste towards more sophisticated ‘international’ films. Elsewhere this shift has sometimes resulted in a significant weakening of domestic film industries, observes Dodona, pointing to past examples like Hong Kong and the Philippines.

But if India’s film industries (the country makes films in multiple languages in a number of regional centres) face more significant challenges than the current hype allows for, its exhibition industry is nevertheless set for substantial expansion. Dodona expects total theatrical box office to reach 63.3 billion rupees by 2012, 25% ahead of the 2007 figure. And multiplexes, which in India still means any cinema with more than one screen, will account for more than 50% of box office receipts, compared to less than one-third in 2007. According to report author, Karsten-Peter Grummitt: “With just six circuits today operating more than 50 screens the opportunity exists to build substantial businesses in the Indian exhibition sector. The leading Indian companies will be able to add literally hundreds of screens before the transition to a modern industry is over”. This process will, however, take time: in 2012, 75% of Indian movie-goers are expected to be still visiting one of the country’s traditional movie houses rather than a shiny new multiplex.