Film industry’s mid-year report card is bleak, box office earnings down 39%

Indian film industry faces a summer of discontent, with box office revenue down 30% in Q1 FY2024. Key for recovery: differentiated stories and big-ticket films.

It’s yet another summer of discontent for the Indian film industry. In the last two months, most Hindi and regional language films-- with the exception of a few in Malyalam-- have tanked at the box office. The Indian film business is down almost 30% in the first quarter of FY2024 (April to June) over the same period last year, said media analyst Karan Taurani of Elara Capital.

Film industry’s mid-year report card is bleak

Last week’s Bollywood release Chandu Champion seems to be sustaining but two bigger films, Bade Miyan Chote Miyan and Maidaan released earlier, tanked. Taurani estimates the Hindi film box office revenue between January to June 2024 to be ₹1300 crore, lower than the ₹1,550 crore it clocked during the same period in 2023.

“Exhibitors continue to cut shows and capacity over the past six months on the back of a muted content pipeline,” he said. Though some of the small and medium budget films like Srikanth, Crew, Article 370 and Munjya fared decently, Hindi cinema’s collections were marred by absence of large budget films. “And 80-85% of Hindi box office today depends on large budget films,” he added.

Sanket Kulkarni, head of business development (theatrical) at Ormax Media agreed that films of a certain magnitude are required to boost the box office. Last year, four Hindi films crossed the ₹600 crore mark and at ₹12,226 crore, 2023 became the first-ever year to cross ₹12,000 crore mark at the India box office. “The clear learning was that the overall box office growth hinges on big films outperforming expectations rather than mid-level films achieving unexpected success,” Kulkarni said.

The Indian film industry’s current slowdown can also be attributed to some large films being postponed and poor flow of Hollywood content which suffered owing to the prolonged writers’ strike last year.

Hollywood and Tamil film businesses too saw a drop of 24% and 31% respectively during the January to May period this year, Kulkarni said. But Malayalam cinema saw its box office revenue soar to ₹713 crore between January and May versus ₹572 crore for the whole year in 2023, he added. With Prabhas starrer Kalki 2898 AD slated for release on the 27th, Kulkarni said forecasting for June is risky.

Though film trade experts expect Indian box office collections to improve in the second half of 2024 when bigger films like Singham Again, Sarfira and Pushpa 2 release, they also point to the industry’s struggle with appetizing content.

Producer and film business expert Girish Johar said with increasingly evolved audiences, the parameters for box office success are changing. “Audiences need different stories and not just big stars. They want to be entertained. Even in a large-scale entertainer, the story cannot be stupid,” he said. Also, the audience walk-in patterns for theatres have altered. “With world-class OTT content at their fingertips, the urgency to watch films on the big screen has changed,” he said.

Ormax’s Kulkarni said the audiences’ understanding of the theatrical worthiness of a film has shot up. “The last one and a half years has made it very clear that films must have a differentiated proposition for people to think it is worth watching in a theatre,” he said. The learning comes up consistently in Ormax research for filmmakers and studios testing film scripts, a business that’s seen a 65-75% jump for the company.

Currently, both reception and monetization of content is challenging. “The rejection rate of films is very high. You may not survive till Saturday if you don’t connect,” Johar said of films releasing in India on Friday.

In terms of monetization, films are no longer able to command steep prices for their TV or OTT debuts as the economics of these two ecosystems are also under pressure. High multiplex ticket prices too often deter audiences who weigh their value against the price of subscription to an OTT platform.

So, what’s the solution to the Indian film industry woes? “There’s no secret sauce for this. We need to make films with differentiated stories, large-ticket films and have a blend of content and star power because content or star power alone doesn’t work,” Taurani said.

Johar agreed: “Run of the mill stories don’t work as audiences have too many options. Basically, you need guts to come to the box office now. It is not a simple game anymore.”