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Business of cineplex and entertainment

Enkayaar, Bollywood Trade News Network
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Mani Kaul, the famous director, who became famous with his film USKI ROTI and one of the pioneers of art movies in India returning after nine long years to India, made a remark that is indicative about the status of the entertainment industry in India. He said that at the time when he was making the films, if multiplexes were present then filmmaking would have been a relatively easy proposition. This is a very telling comment on the way the entertainment industry is progressing in the country.

The potential that FICCI has judged for the entertainment of industry to become around 170 billion-dollar industry seems to be on the verge of realization. FICCI has given the reference year for such figure as 2010. The growth of the industry to such proportions from a small beginning of 65 billion dollars in 2005 is owing to the boom that the multiplex industry is having. In only two years the multiplexes have increased the revenue generation from 65 billion dollars to 90 billion dollars (estimated figure based on past performance). It is this sense of buoyancy, which has in fact provided the impetus to the PVR chain to dream big and open the multiplexes in other countries outside India.

UTV has already signed business deals to produce films other than Hindi films in different parts of the world. During the last quarter the way entertainment stocks have picked is an interesting indication about the shape of things to come. Internet has emerged as the second biggest medium behind print media, which is garnering quite a lot of advertisement for itself. This development also marks a marked shift the way entertainment industry is evolving. With the economy getting digitized, and convenience oriented, delivering of entertainment content through Internet was to emerge as the most potent method.

This is precisely the reason why the films are being released on the Internet as well, in the form of downloadable versions. During the first quarter of the 2008 the stocks of all the entertainment industry have registered growth of more than 25% on an average. The market capitalization of the entertainment-based stocks, in which are included Adlabs, PVR, UTV etc., is more than 5000 crores.

In just thirty years, entertainment industry has moved from one end to the other. During the late 70s if a film producer was not able to provide the detailed costing of his films then a levy of 10 percent ad valorem was charged by the government on to the producers. Result was most of the films got stuck. Now the clock has moved to the other end, where now films run ahead of the schedule and do not overshoot the time limit. It is the professionalism that has been introduced into the industry, is what has made it as one of the most promising industries to watch out for during next two three years to come. Increased earnings are going to be the guiding maxim for the industry.

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