Globalisation of Indian films

Indian films with their original and unparallel traits have a universal appeal. A wide diaspora of Indian origin plays an important role in popularising Indian movies abroad. Also, people who do not have their ethnic roots in India find in the overdose of human sentiments and gaudy painting of the Indian lifestyles a sort of entertainment resource.

Britain – the biggest market for Indian movies

Indian films are screened in around 110 countries including Peru, US, UK, Malaysia and Australia. On the popularity scale, Britain has emerged as the biggest market for Hindi films outside India, with more than two 20 lakh tickets sold annually. UK is the biggest market largely due to two reasons: largest number of British-Asian population and a great number of screens showing the movies. On the other hand, Britain has proved to be the most-popular destination. In 2006, 40 films were shot in the capital alone. It is a regular scene to see troupes of bhangra dancers giving their dazzling performance in front of the camera on the steps of Trafalgar Square or an attractive Indian beauty draped in chiffon saris in Piccadilly Circus.

Other side of the story

While Indian film export has grown by 30 per cent annually, potential of the sector remains largely unexplored. To promote Indian films at international level, it is important that Indian companies and producers participate in global festivals and markets such as Cannes and Berlin film festivals, MIPCOM, MIDEM, MIPTV, IBC, NATPE, NAB, Interbee, AFM and CASBAA. The Ministry of Information and Broadcasting has taken initiative by deciding to set up a separate council with the specific aim of export promotion. This council supported by adequate funding plans is going to propel the exponential growth in exports of Indian entertainment.   

It is crucial to get the right of international distributor for marketing, hiring publicists and agents, and creating an overall excitement about the film. Filmmakers consider the expenses for film promotion equal to the making of the film itself. Even the international distributors nowadays like to associate themselves with the fanfare of Indian films releasing abroad. Lagaan was one of the few films that benefited from its association with Sony and got a decent release in the US.

Government policy

In 2001, the Government of India bestowed industry status on film production. Earlier, the Indian film fraternity was fragmented and in utter want of reshuffle in organised manner. This industry status made it eligible for film financing from banks and financial institutions. Various initiatives are provided to promote and encourage film exports. The revenue earned from exports of film software is exempted from income tax. The duty paid towards the import of raw stocks is refunded back to the exporters by the way of duty drawback. On an average, an exporter receives approximately $ 25 to 30 ( approximately Rs 1,000 to 1,200) as daily drawback per print. With the opening up of the economy, the industry have become more export oriented. Since the content and audience base is different from that of other major exporters, such as the US, Indian film industry does not face any direct competition from global exporters, both in the domestic and international market. Access to the international market has enabled the industry to import latest technical know-how and skills and upgrade their technical and quality standards to international level. In 1991, the Indian government has made overseas entertainment earnings tax-free. In order to improve the production quality, the film industry imports various production and post production equipment. The reduction in import duties has facilitated such imports. After 1992, major US distributors have opened their offices in India. Many Indian producers are distributing their pictures in international markets through these international  distributors.

Business  share

Indian entertainment and media industry is valued at around Rs 353 billion, which is expcted to grow by 19 per cent over the next five years. The size of the motion picture industry is about 19 per cent of the total entertainment and media market. The market is big and attractive enough  for foreign capital and the government has allowed up to 100 per cent FDI equity in film production, distribution and exhibition. The market for film exports and overseas rights for Bollywood films grew to Rs 10 billion in 2006. It is interesting to notice that not only the Indian diaspora but also peopleo of other origins (Asian descent, Arabian descent and even African descent) constitute the customers in overseas markets. Notably, the industry has gained popularity in certain European countries such as Germany, Denmark, Holland and even China.  While the industry estimate puts the total value of Indian movies sold overseas at over $ 20 crore, the global market brings in roughly one-fifth of the total box office revenue for any major release in India.

Negligible size

Though India is the largest film producing country, producing approximately 1,000 films per year, the largest film companies generate between $ 7-50 million (approximately Rs 28 - 200 crore) in revenue. Compared to the enormity of Hollywood, the value of Indian film industry estimated at $ 2 billion is a negligible size. To expedite growth, industry experts feel that marketing has to be played aggressively besides branding of studios and making films on the content that has more global appeal. The sector is encountering challenges from various channels of media and entertainment, which are fighting tooth and nail in their bid to allure consumers. The same is echoed in the   statement of Amrita Pandey, Associate Vice President, International Distribution and Syndication, UTV Motion Pictures: “To increase the business share, the industry needs to tap the new markets in countries like France, Spain, etc., utilise the new revenue streams like online distribution, IPTV distribution etc. and finally to work on the content keeping in mind the taste of international audiences.”

Trade barriers & movie certification

Ms Pandey opines, “As for the major trade barrier faced by Indian cinemas, it is losing the huge market in Pakistan where screening of Indian films are prohibited.” Apart from this, the absence of strict regulations has resulted in unchecked growth of movie piracy. In India, movies have to undergo a certification process under the Central Board of Film Certification. Similarly, these movies too go through the same process in various countries for international release except in the USA. Ms Pandey informs that for the countries like UK, Singapore, Australia, SA and Malaysia, separate certification is required.

 Key international distributors

The opening-up of the economy in general has given a new lease of life to the Indian movies. Audio-visual sector in particular has made the domestic producers more export-oriented. Many production houses like Yash Raj Films,  Eros International, Adlabs Films, UTV Motion Pictures and Rajshri Production have set up their own distribution networks in international markets. These companies doing their best to stay at par with international standard by introducing latest technologies. Others are tying up with international distributors to distribute their films globally. Strictly speaking, American audiences got their first real taste of genuine Indian movie masala with Lagaan. Sony Pictures Classics released the film in May 2001 to art-house audiences with much critical support. However, despite high expectation, the US-based film magazine Variety reports that Sony Classics' Lagaan made a meagre amount of $ 73,276 ( approximately Rs 30 lakh). Even with the Oscar nomination, Lagaan's success remained limited to the South Asian communities.  The company  has produced the much hyped movie Saawariya, directed by the noted director, Sanjay Leela Bhansali. It plans also a gala release of the movie acros India and abroad. Eros International is touted as one of the leading Indian international distributors of Bollywood films with its presence in countries like UK, USA, Australia and Fiji. The company is the national and international distributors of the movies like Devdas, Eklavya, Partner, Gandhi My Father and many others. Lately, the company has been floated on the UK’s Alternative Investment Market. Yash Raj Films, a prodoction and distribution house of the eminent movie director Yash Raj Chopra, has the blockbusters like Kabhi Khushi Kabhi Gham, Kabhi Alvida Naa Kehna, Bunty Aur Bubly in its kitty . According to industry sources, Shah Rukh Khan has sold the entire rights, except music, of the forthcoming film Om Shanti Om from his home production, Red Chillies, to Eros for Rs 75 crore. Bollywood’s remarkable overseas success in terms of revenue comes with Kabhi Alvida Naa Kehna at $ 11 million (approximately Rs 44 crore). Another  media and entertainment company, UTV Motion Pictures, has made its foray in international distribution with the films like Bluff Master, Parineeta, Taxi No 9211 and Don. It has offices across India, Mauritius, UK and USA. Walt Disney Inc. holds a strategic stake in UTV.

Future

Research work published this year by PricewaterhouseCoopers forecasts that the industry will see compound annual growth of 24 per cent over the next five years. If the prediction comes out true, the industry will be worth $ 19 billion (approximately Rs 760 billion) by 2010. The industry's growth rate is expected to comfortably exceed that of the economy.  Considering the scenario, India is hoping to make 10 per cent annual growth in the next few years, which is really an achievement-target that the country is eagerly looking forward to.