JOIN USConvenient entertainment pushing movie sales amid slowdown
The economic slowdown seems to have not impacted the Bollywood film industry going by the box office collections in 2019. The industry has seen a 27% surge in gross box office collections last year, the highest growth in recent years.
The reduction in GST rates on cinema tickets, which was effected in December 2018, aided the growth in the filmed entertainment business in the country. The GST rates on cinema tickets were slashed to 12% from 28% earlier which helped the moviegoers.
The growth in the box office collection has been the highest during 2019, growing at a rate double than that in 2018. The total box office collections during the year stood at Rs 5,613 crore — up from Rs 4,422 crore in 2018 when it had grown by 13%, according to data available with CARE Ratings.
This whopping growth in movie collections has happened despite the fact that India has one of the lowest penetrations of the movie screens across the world (eight per million population) and lowest ticket rates across the world (average of Rs 190 per ticket) -- the major contributing factors in the box office collections. At the end of the calendar year 2018, India had just 2,950 multiplexes across the country, according to film industry insiders.
According to the industry sources, the complete and convenient entertainment experiences that the multiplexes offer have a huge impact on this.
“Whether it is a boom or recession, entertainment is one thing that people always want. And from food to playing area, multiplexes are offering everything. That is why the film industry is doing so well,” a Bollywood producer, who did not wish to be identified told DH.
The revenue mix of both PVR and INOX reveals that only 52% and 58% of their revenues came from the core business of ticket sales.
Movie trade analyst Taran Adarsh says that the multiplexes have also had a huge role in the rise of the movie tickets.
“There are multiple factors contributing to it. The flow of releases has been immense over the year -- not only Bollywood but also regional movies. This has helped. More multiplexes have resulted in more tickets being sold,” he said.
The investor presentations of PVR and INOX reveal that they had added 30,500 and 13,800 seating capacities respectively across the country in 2019.
According to analysts, the recalibration of GST rates on movie tickets has translated into better queues outside cinema halls. In December 2018, the GST Council had recalibrated tax slabs on movie tickets across categories by up to 10 percentage points.