India's entertainment industry is booming
India's booming entertainment industry will see an annual growth of 17 percent over the next few years to touch a revenue of Rs.423 billion ($9.3 billion) in 2008, says a new study.
According to study titled "The Indian Entertainment Industry: Emerging Trends and Opportunities", conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI) and Ernst and Young, revenue grew by 15 percent in 2003.
The figure stood at Rs.192 billion ($4.2 billion) in 2003.
"A robust macroeconomic environment with the (gross domestic product) GDP target at an annual eight percent growth will not only ensure a conducive environment for the Indian entertainment industry to grow but also result in an increased demand," says the study report.
"An increase in television viewership and improved realisation from television subscriptions and film exhibition were the primary drivers of this growth."
The report recommends rationalisation of entertainment tax, extension of concessions offered to multiplexes, a common ticketing platform for film tickets and a re-look at the current licence fee regime for FM radio players.
It favours the setting up of a central body that will issue licences to cable operators, based on certain mandatory information such as service tax and income tax registration and details of subscriber base.
"These licences could be free of cost to existing operators in the area and auctioned to new entrants," it said.
According to the report, the steps taken towards introduction of direct-to-home services, the multiplex boom and experimentation with digital cinemas to expedite film exhibition will spur growth in the sector in the years ahead.
"An increasing focus on the distribution chain, with a view to improving transparency, accountability and organisation, will enable fair sharing of revenues across the value chain and foster growth," the report says.
"The government will need to continue its proactive approach and increased collaboration with industry."
The reports said 2003 was a good year for the Indian film industry. There were 16 Bollywood films that had grossed more than Rs.100 million ($2.2 million) from the domestic market compared to 13 films in the previous year.
Revenues from international markets were also impressive, with four films crossing the $2 million ($44,000) mark in gross collections from the US and British market alone.
The total revenue of the Hindi film industry in 2003 is estimated at Rs.45 billion and is expected to grow at a compounded annual growth rate of 18 percent to gross Rs.101 billion ($2.2 billion) by 2008.
"The key growth drivers in this segment are increase in multiplexes, advent of digital technology, creating films as brands through corporate tie-ups, and corporatisation," said the report.
It, however, said that institutional funding for film production forms only five percent of the total industry size.
"An increased proportion of organised funding will help strengthen the business model for filmmaking and raise the standard for accepted financial and accounting practices across the industry."