Boom time for India’s film industry

Country spends $2 billion on movies each year

HONG KONG — India is “in the midst of a revolution” that will see the fastest theatrical growth in Asia in the coming five years.

The country’s one billion people spend $2 billion on movie tickets each year, a figure which is expected to increase 30% by 2012, according to U.K.-based consultancy Dodona Research.

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.

Dodona warns, however, that “while there is enormous growth and change underway, there are still problems to be addressed such as high entertainment taxes and piracy.”

For the moment, theatrical modernization is having a ripple effect.

“Major exhibitors are diversifying into production and distribution to control the quality and flow of product into cinemas,” the report said. It also predicts a race between exhib chains to establish pan-regional circuits.

“In tandem with pan-regional multiplex development the country will see pan-regional digital circuits emerge,” the report predicted. Currently most e-cinema equipment is focused on single-screen conversions.

E-Cinema means that films can go out to urban and rural theaters at the same time, rather than sending a few expensive prints across the country. That has helped the Indian industry emerge from the downturn it faced a few years ago.

Report finds that India is one of the most advanced countries in terms of digital cinema adoption — although most are 1.3k high definition e-cinema rather than DLP-spec 2k D-cinema.

As of November there were 1,400 digital screens in India with four companies offering exhibs different financing and distribution models.

Despite the growth, report highlights how many cinemas are effectively working for the government.

Entertainment taxes vary according to state, but Dodona says that from an average ticket costing $0.44, the exhibitor keeps less than $0.16 after taxes and rentals.

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