The ‘100cr Club’ Or ‘Tip of The Iceberg’?

Rs. 21cr. That’s what Dabangg 2 netted on its first day at the domestic box office – December 21. This meant that it broke the highest opening day record (earlier held by Rowdy Rathore or Don 2, depending on which source you follow) for a normal working day by a cool 6cr+.

Now, most films don’t do Dabangg 2’s first-day business in their opening weekend. Many don’t even manage it in their entire lifetime. Yes, this makes 21cr look relatively monstrous. But is it really so?

21cr nett business means a gross business of about Rs. 28cr. That’s the amount of ticket sales, out of which about 7cr went to the government as entertainment tax, leaving behind the nett figure of 21. Average ticket price in India today is Rs. 85 to Rs. 130, depending on the release profile of the film. Dabangg 2 being a hugely single screen driven release, let’s assume the price at Rs. 90. So, 28cr means only about 3.1 million (31 lac) tickets were sold on what was a record breaking opening day, which amounts to 0.26% of India’s 1.21 billion population. Only 0.26%!

What kind of mass medium is this, which gets consumed by only 1 in 400 people on its best day?

Part of the challenge is purely demographic in nature. 61% of our population is rural, and even television reaches only about half of this section. Many villages are “media dark” areas, with no entertainment sources, barring perhaps a local medium wave frequency of All India Radio. Hence, expecting our cinema to reach these villages, where theatres are largely non-existent (except some villages in AP & TN), is perhaps asking for too much.

But even if we focus only on the 39% urban populace, only about 0.7% of them saw Dabangg 2 on its first day. A typical episode of a TV program like Diya Aur Baati Hum or Balika Vadhu is watched by more than 8% of the national urban population everyday, five days a week, 52 weeks a year.

If at only 0.7%, we get 21cr, a 50cr opening day (i.e. 67cr gross) shouldn’t be very far away, right? At an average ticket price of Rs. 80, this would mean 8.3 million people, still only 1.75% of our urban population, or less than 1/4th of a daily soap’s viewership. And remember, we are comparing a film’s best day to a serial’s typical day.

What is preventing us from finding these additional 5 million people to visit a theatre on the opening day of Dabangg 2? Primarily two reasons:

1. Cinema accessibility: In the last 10 years, 400 multiplexes have come up in the country. But more than 90% of these are in the top 10 metros. The access to new content in smaller towns remains poor. Even with digital technology, the penetration has remained purely surface level, than really deep.

There is a Catch 22 involved here. Many smaller towns don’t have cinemas that are well maintained or worthy of “gentry” (read sophisticated and/ or family audience) patronage.  These theatres are still seen as not being safe for women, or indeed, worthy of being visited by a respectable family. Hence, films that tend to do well here are soft porn, south or Hollywood dubs or the odd Bollywood action film that releases in its second month. It’s become a pattern that will get resolved by a combination of bringing mainline cinema to these theatres, as well as by maintaining them consistently. Clearly, not an easy one.

2. Ticket pricing: In the more urban centers, ticket pricing and demand show little correlation. It is assumed, for example, that everyone in Western suburbs of Mumbai, has the willingness to pay Rs. 250 for a ticket. There is no flexible pricing based on the title (barring steep price hikes for big star releases) or front row tickets. So, a 300-seat auditorium will go 40% full, while it may have arguably been 60% full and made more money at a lower or more differential price point. Essentially, the multiplex revolution has alienated the lower middle class from the cinemas in the bigger cities. If you have to spend Rs. 1000+ for a family of four, you will do it for perhaps an odd film or two in a year. In fact, over the last three years, revenue growth in the smaller towns has come up from more theatres (the surface level penetration I spoke about) releasing mainline Hindi films, while that in the urban centers has come largely from the ticket price hike. Yes, the frequency of theatre visits has increased amongst the urban youth, but this has been offset by a drop in the visit frequency for the older, family audience.

Both these areas are beyond the direct purview of the film producers and studios. One is more about real estate & retail, and the other more about the exhibition business. Yet, the producers and the studios will be the direct beneficiaries as a result of any changes in these areas. Hence, it is in their interest to drive the change.

Making cinema accessible, on both price and experience, should be a point of great discussion. But I suspect this is not something that’s top priority right now. Everyone’s happy talking about 100cr, now 150cr. 500cr is a benchmark that’s currently so out of reach, it’s not even considered a benchmark.

With technology coming into play more than ever before, the need to act fast can’t be overstated. Because if the urban youth disengages and starts moving their consumption to the Internet, our cinemas can be in trouble, deep trouble.

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About Shailesh Kapoor

Founder & CEO - Ormax Media. Film Lover. Media Insights Detective. Budding Author. Lifelong Student.
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6 Responses to The ‘100cr Club’ Or ‘Tip of The Iceberg’?

  1. nice article and thought for extending the business by actually making the cinema reach to small interiors also 🙂 i was wondering, apart from the price theater owner has to pay to maintain their theater’s quality, wont he have to pay too much to get the new movie digital print. since population and movie goers will be still less in smaller towns/villages, will he be able to cover up his cost of buying digital prints of new movies, let alone theater maintenance cost.

  2. Ena says:

    Very well written.Another thing is satellite rights. Movies are shown on TV just after about 1 or 2 months of their release.Some even before.Why go to a hall whwn you can watch it on TV.Some serious thinking.

    • I don’t think the satellite factor is a major one. It’s like piracy. If you don’t give incentive to watch a film in a theatre, all kind of alternatives will come up. Real solution lies in making theatres more accessible.

  3. Sir, it’s strange that you don’t think content is essential for good business. 500 crore is possible only for a movie which has good content.
    We can’t expect that from bad or mediocre movies. Barometers and benchmarks should now shift to second week business or onward.
    Today, all top 10 stars are capable of 100 crore even with dud – all it takes is 0.8% of Indian populace to watch it.

    • Agree with you. I never suggested that bad content can take a film to 500cr. I was suggesting that EVEN good content can’t take a film to 500, unless theatres become more accessible.

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