Bollywood at inflection point as online content platforms gain traction: SBI Research

New Delhi [India], August 29 : The Hindi film industry, popularly known as Bollywood, after decades of storytelling that has made people elated and exuberant, or sad and thoughtful at times, seems to be at an inflection point unlike any other disruption it has faced before.
SBI Research team led by Group Chief Economic Adviser Soumya Kanti Ghosh has tried to outline some of the reasons and embark on some suggestions for this industry that gives what it said a lot of 'soft power' to the idea of India.
The report titled 'Reminiscing the days of friday blockbuster Bollywood releases:are we witnessing a behavioural shift in viewers' psyche of a new india?' highlighted four major issues that are hurting the overall Hindi movie industry.
Content in Hindi movies post-pandemic seems to be a double-edged sword which is impacting earnings.
"Covid-19 did something that two world wars couldn't do: it closed down cinemas," it said.
In the pre-pandemic world, on an average 70-80 movies were released per year in Hindi language with a total collection ranging between Rs 3,000-Rs 5,500 crore.
However, since January 2021, a total of 61 movies have been released in Hindi language (Original + South/English dubbed in Hindi) till early August 2022 with total collection of merely Rs 3,200 crore and 48 per cent of this collection came from 18 dubbed movies.
"The situation of original Hindi movies is unsatisfactory," it said.
The average rating of 43 Hindi movies since Jan 2021 was just 5.9, way below the 7.3 rating of 18 Hindi dubbed movies.
The rating of a movie is a popular tool to measure the impact of content and it is generally assumed that all "GOOD" movies will be bestowed with "GOOD" rating and also with "GOOD" collections, the research said.
Statistical exercise indicates that an extra one point IMDB rating leads to Rs 17 crore more box office collections.
Further, the research report went on say that a decline in single screen theatres and rise in multiplexes at the same time also escalated the problems facing the Hindi movie industry.
"At a multiplex, the ticket cost is three to four times more than single screen theatres. The costly ticket prices are also due to the high entertainment tax for Hindi movies. Interestingly, 62 per cent of the single screen theatres are in South India, with North India having a share of only 16 per cent followed by West with 10 per cent of all single screen cinema halls," the report said, adding that it could also be the reason why South Indian movies are generating more revenues than Bollywood movies lately.
Next, it feels the demographic profile across states may be impacting moviegoers as online platforms come up with different genres -- action, horror, drama, thriller, and comedy, among other.
"The millennials uses more of these (online) platforms to watch genres they prefer the most. South Indian states have higher share of elderly people compared to North Indian States who would still prefer watching movies on big screen in theatres than on OTT platforms."
Importantly, a major disruption in Indian entertainment industry is the emergence of OTT (over-the-top), which shares around 7-9 per cent of the entertainment industry, and is constantly growing with over 40 odd players and offering original media content in various languages.
Quoting reports, it said there are 45 crore OTT subscribers in India and it is expected to reach 50 crore by 2023.
"The rise in OTT is expected to eat into cinemas viewers and profits, as more than 50 per cent of the people use OTTs more than 5 hours in a month. Also, options like Smart TV, Chromecast coming into the picture have impacted the traditional mode of entertainment the most. These developments have helped to bring movie theatre experience at home, with seemingly unlimited choices spoiling the viewers!"
It is normal that technology and platforms change with times.
The 1980s, the report said, saw the exponential rise in video cassette renting, which for the first time challenged the established modes and models of entertainments. It noted how the rise in number of multiplexes since early 2000s across metro/urban areas effectively killed the DVD industry and single screens.
"However, the onslaught of OTT seems to have taken us back to the good old days of watching moving at home just like the DVD era, only with enhanced choices!"
In India, the OTT market is expected to reach Rs 11,944 crore by 2023, up from Rs 2,590 crore in 2018 with a compound annual growth rate of 36 per cent, the report said citing independent estimates.