Incredible !ndian cinema market

CineAsia is over and while it looked like an interesting programme and first year in Macau, I was unable to attend. What struck me about the details of the events, though, was that there was absolutely nothing about India in the whole three days - unless you count Real Image co-sponsoring a breakfast and the screening of 'Elizabeth: the Golden Age' (directed by Shekhar Kapur).

You might think that I have a thing about India at the moment, but it was Variety that recently began an article with the observation that "India is 'in the midst of a revolution' that will see the fastest theatrical growth in Asia in the coming five years." (Boom time for India's film industry - Country spends $2 billion on movies each year). This is based on a new report by Dodona examining the trends on the Asian sub-continent:

Dodona describes the Indian movie industry as "the largest in the world and one of the most fascinating." Growth is being powered by demographics and an explosion in numbers of multiplexes and digital cinemas.

"On the basis of current plans, in 2011 half of all the screens in the country will have been built or re-equipped within the past five years. Even at its height, the European and North American multiplex boom did not match this scale of investment," report author Katharine Wright said.

Based on my observations on the ground I definitely agree [and an apology to Dodona for previously getting my facts wrong on their Euro digital cinema reports]. But don't take my word for it. Here is what Adlabs and PVR have to say about it in their own words, from a Q&A in moneycontrol.com article ('What are PVR, Adlabs Up to?'), about how they will grow through acquisitions and newly built multiplexes over the coming years:

Q: A few issues the market is quite excited by about - the Adlabs now; one, there is rumour that you could probably looking at Sringar Cinemas for a buy out, is that true?

Venkat Devrajan, CFO, Adlabs Films: Whether it’s organic or inorganic, (we are) ultimately looking at the plan at which Adlabs is today. With 111 screens in the next 24 months, we are looking at at least 400 screens to rollout. So within that space whether any company comes by or we do it on our own as an execution project; at the end of the day it’s number that counts and that is what our plan is.

That's quadrupling the size of India's largest cinema circuit in just two years! If cinema growth like that doesn't take away your breath away, nothing will. And these are not idle boasts. And the growth of the multiplexes is transforming the entire Indian cinema landscape, as this article ('Multiplexes fast gobbling up India's single hall theatres') from The Economic Times makes clear:

From one multiplex in Saket, south Delhi, in 1997 their number today has crossed 400 across the country with about 20,000 screens, redefining the way films are viewed.

PVR Ltd, which brought this concept to India, has a total of 95 screens in 22 multiplexes across India, Fun Cinemas has 50 screens in 11 cities, Inox Leisure Ltd. has 19 multiplexes with 65 screens and Adlabs Cinemas has no less than 100 screens in 22 cities.

"Up to 97 per cent of urban youth prefer to watch movies in multiplexes," says a report recently released by the Confederation of Indian Industry (CII).

"I can't even recall which was the last film I saw in single screen movie hall. The experience of watching a film in a multiplex compared to a stand-alone cinema hall is beyond comparison," Smriti Singh, a college student, told IANS.

And that's even before we get to digital, whether you are talking about e-cinema or true digital cinema. India is unique in having succeeded in having effectively establishing an alternative standard to DCI (UFO's MPEG-4 and E-City's MPEG-2) for all major releases, and even the odd Hollywood title (Snakes on a Plane, The Messengers). But that's a long posting for next year.

While a lot attention is being lavished on film and exhibition in China, it is easy to forget what a tightly controlled market it is and the risks that Hollywood studios and other Western companies face in dealing with the country. Not only have exhibitors like Warners effectively been forced to withdraw, but now Hollywood films face an un-official three month ban. From Variety:

In its most drastic measure ever against Hollywood, Chinese authorities have banned the release of American pics for at least three months.

Ban began Saturday and will continue until the end of February at least, but Chinese sources say it could continue until May.

Central-government order came from echelons higher up than the State Administration for Film Radio and Television or the Film Bureau, which normally handle movie industry policy and application. Ruling likely emanated within the Propaganda Ministry.

The Asian and Chinese arms of the studios have not been given any release slots in the first two months of 2008.

Unlike China, it is not restrictions or quotas that is keeping Hollywood films' market share low in India but the phenomenal success of the local market Hindi films (aka 'Bollywood'), Tamil, Telugu, Malayam language films and other local Indian film productions. Western films do show, but they just cannot compete with the success of the latest Shah Rukh Khan release. And Hollywood has started to take notice. The Sony produced 'Saawariya' recently outperformed Tom Cruise's 'Lions for Lambs' at the global box office. Not bad for a three-hour song-and-dance adaptation of a Dostoyevsky short story. Incredible !ndia indeed.

Lastly, the vertical integration and emergence of film exhibitors as producers and distributors means that the ground is set for digital cinema in a way that it can never be, because of the enforced separation between cinema owners and the Hollywood studios. The impact of this vertical integration and the emergence of producer-distributor-exhibitor power houses is examined in Glamsham.com's 'Multiplexes and the dawn of a new era':

The trend has also to be seen from the perspective that there would not be any acrimony about sharing of the revenue in the first week when the film is released. This trend is already there in Hollywood and it has slowly started gaining momentum in India. It is a healthy trend, as it would bring in further transparency into the business of filmmaking. The participation on the part of the cinema owners has increased as the investors into the shares of these companies have provided the capital for the same.

Next year I hope to be able to go into more detail about the digital changes taking place and facing India. So for now, Namaste to you all. It's 10pm and I'm off to the Adlabs Metro cinema, "Bollywood's most famous red-carpert theatre" (pictured above), where there is digital work to be done.