UPDATED — Disney India’s “Dangal,” starring Bollywood megastar Aamir Khan, has revitalized a film industry reeling under the after effects of Indian Prime Minister Narendra Modi’s demonetization program.
“Dangal”, a rustic woman-empowerment wrestling drama directed by Nitesh Tiwari, released in India on Dec. 23, in the Christmas holiday frame. It collected $15.7 million on its opening weekend and a further $8 million overseas. Its $6.2 million collection on Sunday is the highest single day score ever in Indian cinema history.
It played on 4,400 screens in India in Hindi, Tamil and Telugu versions. Overseas it played on over 1,000 screens in 40 territories. Its gross figure may be revised upwards to $9 million.
The numbers should come as welcome relief for the Indian film industry. On Nov. 8, Modi announced that all currency notes of the 1000 and 500 rupee denominations would cease to be legal tender and would have to be exchanged for new notes or deposited into bank accounts by the end of 2016. This meant that 86% of all currency circulating in India became worthless overnight unless exchanged or deposited by the deadline.
The reasons cited by the Modi government for the drastic move range from bringing hoarded untaxed income back into the banking system to cutting off funding sources for terrorists and even to making India a digital, cashless economy.
Some 8,500 of India’s 12,000 screens are single screen theatres and these were the worst hit as tickets are usually paid for in cash. Newly cashless punters were more concerned about getting their worthless banknotes exchanged rather than going to the movies.
Single screen cinemas lost approximately 60% of their business, according to industry estimates, and some 700 of them have shut down across the country. Single screens account for some 45% of Indian box office revenue.
The first casualty was “Rock On 2” that released on Nov. 11, three days after demonetization kicked in. The $7 million budgeted film managed to recover $2.5 million at the box office. Subsequent releases like “Befikre,” “Dear Zindagi” and “Kahaani 2” immediately changed their strategy and reduced print supplies to single screens. They concentrated on the higher-priced and higher yielding multiplexes and managed decent box office numbers.
Film production also slowed down across the country as producers ran out of bank notes to pay daily wage technicians who are paid in cash.
With “Dangal” drawing punters back to cinemas, the film industry appears to be limping back to normal, and many ATMs now have limited amounts of cash, but the long term effects of demonetization, whether positive or negative, will only be apparent in the new year when the dust has settled.