Forbes India 15th Anniversary Special

Business of Entertainment: Some post-Covid recovery in 2023, but choppy waters ahead

This year saw a bright light shining over Indian cinema and OTT in terms of content, and box office revenue was led by big-budget Hindi films. But theatre occupancy levels remain a concern, and consolidation in the industry stands to change the way the game is played

Divya J Shekhar
Published: Dec 21, 2023 03:25:42 PM IST
Updated: Apr 3, 2024 04:08:43 PM IST

Business of Entertainment: Some post-Covid recovery in 2023, but choppy waters ahead(Clockwise)Shah Rukh Khan’s Jawan in September, said to have collected Rs 1,145 at the global box office; The Elephant Whisperers won the Best Documentary Short at the 95th Academy Awards; stand-up comedian Vir Das won an Emmy for his Netflix special Vir Das: Landing and and Sunny Deol’s Gadar 2 earned Rs 691 crore.

December was festive at the movies, with a big-budget theatrical release almost every week. In Hindi, the month began with Animal and Sam Bahadur, the former reportedly crossing Rs 800 crore in box office revenue at the time of writing this article. Then there was Shah Rukh Khan-starrer Hindi film Dunki and the first instalment of the Prabhas-starrer Telugu film Salaar. In English, there’s been Wonka and Aquaman and Lost Kingdom.

While the December releases are largely reflective of the kind of Indian films we’ve seen succeed at the box office through this year—the aggressive, alpha male-led violent action and drama genre—they also faithfully keep up the box office victory streak that was set by a handful of films that released before them.

The films were also credited with bringing people back to the theatres, starting with Shah Rukh Khan’s Pathaan in January, said to have collected Rs 1,000 crore at the global box office. This was followed by Karan Johar’s Rocky Aur Rani Kii Prem Kahaani, which reportedly earned Rs 335 crore, Shah Rukh Khan’s Jawan in September with Rs 1,145 crore global collections, and Sunny Deol’s Gadar 2, which earned Rs 691 crore. This was followed by a slump in October and November during the ICC Men’s ODI Cricket World Cup that was held in India, before another high in December.

India had memorable moments at the Academy Awards and International Emmy Awards in 2023. Actor and stand-up comedian Vir Das won an Emmy for his Netflix special Vir Das: Landing, while producer Ekta Kapoor received the Directorate Award. Actor Shefali Shah earned an Emmy nomination for Delhi Crime’s season 2. In March, ‘Naatu Naatu’ from Telugu film RRR won an Oscar for Best Original Song, while The Elephant Whisperers won the Best Documentary Short at the 95th Academy Awards. In September, Malayalam film 2018 was chosen as India’s official entry for Oscars 2024.

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Karan Taurani, senior vice president, Elara Capital, says that Indian content earning worldwide recognition, thanks to OTT platforms, will continue to “encourage more producers and creative people to make differentiated content, which is accepted both by the Indian and global audiences.” Other big trends this year, he highlights, include South films working well in the North and vice versa, and “both these movies working globally”. English films dubbed in Hindi are seeing more acceptance in metros and tier 2 markets, contributing to about 30 percent on average, he says.

Sequels and franchises also worked well for the industry this year and will likely to continue into 2024, said Sanjeev Kumar Bijli, executive director, PVR Inox, to Forbes India in a recent interview. He gave the example of the ‘spy universe’ coined by Yash Raj Films earlier this year, which released Pathaan and Tiger 3. Fighter, starring Hrithik Roshan and Deepika Padukone, is lined up for January. There’s the Singham universe established by Rohit Shetty, and the third instalment of Don, directed by Farhan Akhtar. “Sequels will be a major focus of the Indian film industry. They have a certain fan following among the audiences so they end up becoming box office successes,” Bijli said.  

These instances of booming box office collections, however, are not a result of more people coming back to the theatres, but high ticket prices, says Taurani. He says that theatre occupancy levels remained at 75-80 percent recovery through the year compared to pre-Covid levels. In fact, PVR-Inox, among India’s largest multiplex operators, also shut down 50 loss-making screens in May.

Also read: Censorship or Certification: How should OTT platforms be regulated?

Consolidation ahead

OTT platforms, the other leg of the entertainment industry, have also had an eventful year. Last week, as per media reports, Netflix joined its peers in stop global streaming of uncut Indian films, giving the Central Board of Film Certification (CBFC) indirect control over censoring what Indians watch online.

One big development has been consolidation in the Indian entertainment landscape. The $10 billion merger of Sony Pictures Network India and Zee Limited, whose deadline was set to December 21, has now reportedly been extended. Another potential deal could involve Reliance Industries either taking over Disney Star’s entire India business or its streaming business, Disney+ Hotstar. Consolidation is beneficial for broadcasting business, says Taurani, because it is likely to result in channels having more clout among advertisers, cost saving and improved operational efficiency.

Consolidation, he adds, will also let OTT platforms raise average revenue per user (ARPU). They are paying large amounts for acquiring content, which will likely reduce with consolidation. This, however, could be bad news for film producers who are piggybacking on sale of OTT rights. “More than 60 percent of their revenue is coming for digital rights,” Taurani says. “As far as movie producers are concerned, consolidation is likely to shift the bargaining power from content makers to OTT platforms, which could add to the challenges of making and selling large scale films.”