Digital Revolution could be a true messiah to the Indian film Industry

Film Industry probably is one of the top industries in the country both on revenue and number of people employed but at the same time very volatile and most unorganized. FICCI-KPMG study puts Indian industry at $2.2 bn and it is probably the No.1 Film Industry in the world churning out more than 800 films per year most made in Hindi, Telugu, Tamil and Malayalam.

 The Industry is very unique in its own way as it was not even considered as an  industry till late 90s and the way Film Industry works is different from many organized sectors. The success rate is very low making films the risky business and though we saw corporate and studios entering the fray, most couldn’t sustain. Today the number of films being made has come down and reports show that the revenues have become stagnant while the cost of making films have gone up. We have seen films like Blue, Endhiran, Chandni Chowk to China and Magadheera being made at huge costs and the biggest problem the producer faces today is to recover costs and make money. With Piracy and Internet downloads threatening the inflow of people into the theatres and the reviews on internet and newspapers influencing the decision of the filmgoer, the job of film maker has become even tougher to grab maximum eyeballs in the first few days and recover the cost at the earliest.

A film maker recovers his cost thru selling the theatrical rights to his distributors in India and abroad, music rights and satellite rights. Though there is trail income that comes by way of exhibition of film for years, the biggest focus of any film maker today is to get big openings to recover his costs. In this Industry fortunes are made or broken over a weekend and with films releasing every weekend and with limited theatres at stake, the first week becomes very critical. The trend thus far has been to ensure release with maximum number of prints, create pre release hype and ensure collections. These days the marketing of the films has been slick and hype to create good openings has been at peak but finally if the script is not good enough, nothing works.

In any other industry the premium product commands premium price and an economy product gets lesser price and the costing of the product is also in direct correlation of the product type. You will rarely find that the ticket price of a budget film being priced low while a high budget flick being priced high. The only differentiator here is number of prints and there are times when we find that the small film makers seldom don’t get proper theatres and hence the flick suffers. I think its time the Industry innovates to ensure that the costs are recovered better which can obviously improve the health of the Industry.

One argument that seldom comes in this context is that film industry should reduce the costs to ensure better returns. While I agree on the same, a look at the costing clearly throws the fact that 50-60% of the cost of making a film goes towards remuneration of the stars and it is not really controllable as the remunerations are market dependent and also depends on the success of the stars. The producers should definitely look at other options to reduce costs and digital production and exhibition is one area which definitely could be a game changer. Digital production would definitely reduce the wastage in making a film and also save time. With advanced cameras like RED in vogue, the quality of the cinema will also improve along with cost, if digital production is adopted. Digital Projection or Digital exhibition can definitely reduce the cost of making multiple prints and save on film quality. Digital exhibition, though is now pretty popular hasn’t caught up the way it is supposed to be. Pyramid Saimira has decided to close shop and UFO is a big player on the same. I see that Bollywood is more active on digital cinema and other industries are yet to catch up. Digital exhibition not just gives an opportunity for wide release of the film but also security against piracy. Digital content protection software can resist piracy.

Theatre is the prime medium thru which films are being exhibited and spiraling multiplex and theatre rents are squeezing the margins for the Producers and Distributors. Internet as a medium is not embraced by film Industry as much as it is embraced by others. Internet could be the right answer for the film piracy if used well. We have seen some bollywood films getting into streaming medium like YOUTUBE and the producers of 3 IDIOTS have agreed for download from You Tube against a price 12 weeks after theatrical release. Telugu film Prasthanam was allowed on Internet on pay per view basis. This could be a game changer if used well. The Producers and Directors might be wondering if embracing internet could destroy the quality of film viewing as films projected in theatres give an exemplary experience with right sound. While it is true that films can be best experienced in theatres, the number of downloads over internet are spiraling and there are good number of people across the world who are downloading pirated prints and the move to market the product over internet could certainly reduce the risk of pirated prints. This could only add as an additional income and also can give an experience better than pirated prints. While music, TV and book publishing industry has used internet to the greatest advantage, film industry is still in the initial stages and the biggest medium according to me is being left out.

The next biggest medium that could change the future of the film viewing could be mobile phones. With 3G all set to invade the Indian telecom space, the opportunities are enormous. The medium can be used to promote and exhibit films on pay per view and can give flexibility to the viewer to watch whenever he wants. Streaming of music and downloads can boast revenue of producers as well as telecom companies.

DTH is another medium according to me which could help producers grab more and more eyeballs. There were few small budget flicks that saw release on TV but this could be a big medium which can take films to millions of homes India and abroad. Agreed that this could pose direct competition to theatres but the producers can consider a staggered release of a week on DTH on pay per view.  I think this could almost put an end to the rising pirated DVD market and considering the reach the Industry has, this could turnout to be a good revenue model for the films.

With Globalization of Indian films and with new markets opening up ( Telugu movies doing well in Kerala and the most popular movies in Poland are Indian and Telugu flicks), If the Industry could open itself up and embrace new technologies, medium and distribution channels we can see more successful movies and happy producers which in turn can give us varied cinema of different genre.