In Bollywood sweepstakes, yardsticks change with time. Once upon a time, great music was the touchstone of box-office success, and for years, ‘silver jubilee’ was the measure of a stunning hit.
Nowadays it’s the box-office collection that matters. How much money has the film collected – 200-300 crores, or more?
Box-Office Collection Matters
So, what’s the significance of these numbers?
For the trade it’s reassuring how robust the simple, old world box-office collection can be if the mix is right. First, it’s earnings after paying entertainment tax that can be as high as 30%. Second, the money made overseas is over and above this. Third, it does not take into account other revenue streams that flow in from satellite rights, music and digital.
Over the years, Bollywood has been earning more revenues due to a combination of more screens, higher ticket prices, and a wider reach, thanks to “digitalisation” that quickens the day and date release.
How Do Bollywood Films Make Money
Here’s how film producers and studios make money through their films.
- Domestic box office
- Overseas theatrical distribution
- home video segment
- Cable and satellite rights
- Music Rights
Over the years, a lot of film producers have been focussing their efforts on just making the film; they then sell the film to a studio to do the marketing, promotion and distribution.
Producers who sell a film outright to a studio are equal beneficiaries. In such deals, the onus of marketing and releasing and thereafter making profits rests solely with the acquirer.
Funding for the Films
Foreign investors have good reason to be drawn to his industry as a billion people watch films, possibly more than once a week, and the numbers are hard to ignore. India has the largest film industry in the world; with almost a thousand films being produced a year, which is definitely much more than Hollywood.
In addition to the increasing number of foreign funding sources, the industry is also witnessing dramatic changes in how and from where it earns its revenues.
Read complete article here at India Knowledge@Wharton
When Baahubali 2 Broke Several Myths
With the stupendous success of Baahubali, there are many who feel that Bollywoods’ commercial supremacy in Indian cinema is coming to an end.
Baahubali 2′ not only shattered box office records, the movie also shattered several myths that were prevalent in Bollywood till now.
Bahubali’s success reveals that size of the market for Indian movies is huge. Indian Filmmakers just need to give the Indian audience something worth coming to the theatres for. The audience don’t care if a movie has big stars, or is dubbed, as long as the film wows them and gives them a Hollywood like visual experience.
‘Baahubali’ broke the notion that dubbed films don’t work. Hindi-speaking audience only has Salman Khan and Aamir Khan to look up to, to give them the blockbusters (Shahrukh finds it difficult to give even decent hits nowadays). Both men do only one film a year (on an average), so the younger audience turns towards Hollywood films to get their thrills on screen (‘Baahubali’ gave the audience that kind of experience).
The movie should encourage more producers (of regional films) to dream big and make a pan-India film (now that it has been proven that language is not an obstacle…and we are talking about really big numbers here.
Baahubali 2 grossed over Rs 500 Crores worldwide in the first few days of its release.
Even in the Hindi-speaking belt of India, dubbed version of “Baahubali 2” made more on its first day of release than Bollywood’s top grossers “Dangal”, “PK”, and “Bajrangi Bhaijaan” did on their respective opening days.
Other Factors Affecting Box Office Collection
While content shall remain the king, certain investments have made a difference – More multiplexes and upgraded single theatres across the country have pushed up collections. Fast-track penetration has happened due to digitalisation. Prints have become cheaper, day and date release possibilities (a trade term that stands for simultaneous release across markets) is now a reality.
All these factors have contributed to higher collections.
The two major contributors to revenue growth are:
- Higher average ticket prices and
- Broader theatrical distribution.
Having said that, theatrical contributes only 50% to a film’s overall revenues, with satellite, music, home video, overseas rights, new media, digital rights and other smaller revenue streams making up the rest.
Read: Film exhibition business in India
