Republic Economic Summit: Films, TV still rule Entertainment world amid rise of OTT

In the lead up to the first-ever Republic 'India Economic Summit' scheduled for November 26 in the National Capital, Republic World establishes an overview of the world's sixth-largest economy and key contributory factors to its growth, crisis and sustenance.

The Entertainment industry plays a crucial role in the economy of the nation as it involves numerous entrepreneurs, employees and viewers. The industry's role in generation of revenue, creation of jobs and entertainment of citizens can't be ignored. Here's looking at some of the highlights in the various branches of the industry, like Films, TV, OTT and Radio. 

Films 

The film industry has grown by leaps and bounds over the past few years, with many films going on to earn over Rs 300 crore at the box office. Some movies like Baahubali neared the Rs 500-crore mark in India alone, while the film is said to have crossed the Rs 1000-crore mark across the globe. However, the industry faced a massive setback in the form of the COVID-19 pandemic.

As per a trade observer, Hindi films earn close to Rs 3,000 crore every year, but this figure stood at around Rs 500-600 crore only during the pandemic. Apart from the losses of around Rs 1,700-2,000 crore, filmmakers are set to face increased budgets, in the range of  Rs 5 crore-15 crore since the interest costs and overhead costs due to the delay are set to prove costly.

An exhibitor named Akshay Rathi shared that the theatres faced losses worth Rs 25-75 lakh per month due to costs of maintenance of the theatres, salaries and more despite films not being released. The release of movies which could not happen during the pandemic in the year 2020, were all pushed to 2021 leading to more cramped space between releases, and simultaneous releases, which will make it harder for filmmakers to recover costs. 

The ray of hope was the performance of Sooryavanshi, which became the first film to hit the Rs 100-crore mark at the box office since the start of the pandemic, and is inching close to Rs 200-crore. 

The Government has taken various initiatives for the industry like the implementation of the Cinematograph Bill, which aimed at curbing piracy, and a recent policy aimed to promote filmmaking. The ongoing International Film Festival of India is conducted by the Information & Broadcasting Ministry with intense preparations every year, where films and artists across the globe are celebrated. The National Awards and Padma Awards for artists have been a motivational boost for them.

Among the upcoming initiatives is the Uttar Pradesh government initiating the set-up of the Film City along the Yamuna Expressway. The project is priced at Rs 10,000 crore, which could play an important role in providing opportunities for artists, creation of employment and revenue generation.  

TV

TV continues to have a wide reach despite the growth of the Over-the-Top platforms, especially in remote areas. The industry, however, faced a setback during the COVID-19 pandemic, when its revenue fell 17 per cent Y/Y in 2020 generating USD 4.4 billion in total revenue (62 per cent from advertising and 38 per cent from subscription), as per a report by report from advisory and consulting services provider Media Partners Asia (MPA). As per the report, the TV industry is expected to grow over the next four years, and a figure of 7 per cent rise that will take the total revenue to USD 12.3 billion (approx Rs 91,684 crore) by 2025 is expected. 

The Direct-to-home subscription is also expected to grow from 5.8 crore homes in 2020 to more than 6.8 crore homes in 2025, as per the report.

OTT 

Over-The-Top platforms like Netflix, Amazon Prime, Disney+ Hotstar have been witnessing significant growth as access to the Internet and increase in net speed have increased. The COVID-19 pandemic, when movie theatres were shut, added to the growth as many ventures directly released on OTT platforms.

The OTT market in India is said to be worth USD 1.5 billion in 2021, as per a report by RBSA Advisors. This figure is set to rise to USD 12.5 billion by 2030, the report added, courtesy better Internet connectivity and rise in smartphone usage.

The government has also sought to regulate the OTT industry, which has faced flak from a section of the audience over its content. It had brought the platforms under the ambit of the Information & Broadcasting Ministry in November 2020. The platforms were given numerous rules to abide by in the Information Technology (Guidelines for Intermediaries and Digital Media Ethics Code) Rules 2021 (Rules).

Radio/Audio streaming 

The radio industry has witnessed various phases from being a major medium of communication to being used by only a limited market. However, the industry saw a turnaround of sorts during the COVID-19 pandemic, when the time spent on radio increased by 23 per cent to 2.36 hours daily, as per AZ Research. It had concluded that 82% people had tuned into radio during the pandemic. 

As per a report by RBSA Advisors, the audio over-the-top platforms like Spotify, JioSaavan, etc are worth USD 0.6 billion at the moment. This figure is expected to rise at CAGR of 28.6 per cent to USD 1.1 billion in 2025 and further to USD 2.5 billion by 2030, the report added.

(With inputs from PTI)

Image: Pixabay/Representative