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Despite being the largest film industry in the world in terms of number of films produced every year, the Indian film industry lags behind the US and other countries in terms of revenues. The industry is poised to grow at 11% CAGR, reaching gross box office collection of Rs 23,800 crore ($3.7 billion) by 2020 from the current Rs 13,800 crore ($2.1 billion), according to a report by audit and consulting firm Deloitte. Released at the Indywood Film Carnival 2016 at Ramoji Film City in Hyderabad on Sunday, the Deloitte Indywood report elaborates the current status of the Indian film industry, focus areas, challenges, and Make in India initiative relevance.
"Despite large number of films and theatre admissions, the industry continues to remain small with respect to other global industries in terms of revenue," the report said. "In India, the film industry's gross realisation stands at $2.1billion versus gross realisation of $11 billion in the US and Canada, which produces significantly lower number of films (approximately 700 films)."
The report highlights that India lags behind mainly due to "low ticket realisations and occupancy levels, lack of quality content and rampant piracy." Low infrastructure penetration, slow growth in average ticket price (ATP), complicated tax regime, rising costs and lack of access to funding, multiple layers of bureaucracy and prevailing strict censorship norms are some other challenges. Deloitte also points out how lack in exhibition infrastructure is a key impediment.
"Addition of screens has not kept up with demand with increments of only 150-200 new screens per year. India is severely behind the globe in screen penetration — 6 per million versus 23 per million in China and 126 per million in the US," it said. However, taking a positive outlook, the report also points out that expansion of multiplexes in smaller cities, investments by foreign studios in domestic and regional productions, growing popularity of niche movies, and emergence of digital and ancillary revenue streams will work as key growth drivers.
Further, increase in per capita income and growing middle class, growing demand from tier-II and III cities, diversification into international markets and more use of visual effects (VFX) in movies will drive up growth. The report said to achieve growth and profitability, the industry needs to focus on film tourism, skill enhancement, shortening window of release through better planning, updating current technology and countering piracy.
Related Links: Nature , Scope and List of Colleges/Institutes offering Media and Entertainment Courses in India
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