‘Audience Fatigue A Bigger Challenge': Film Trade Analyst Komal Nahta On Changing Viewership In India

The July 21 Hollywood film releases – Greta Gerwig's Barbie and Christopher Nolan's Oppenheimer – have together become Rs. 100 crore hits within the first week at the Indian box office. The much-awaited Hollywood releases brought audiences around the globe and in Indian en masse to theatres at a time when footfalls have remained subdued since the Covid-19 pandemic – falling from 1.46 billion in 2019 to 994 million in 2022. The collections follow in the footstep of the July 12 release, Tom Cruise's Mission Impossible - Dead Reckoning which is soon to enter the 100-crore club. 

While Barbie earned ₹27.5 crore nett, Oppenheimer made ₹73.15 crore nett during the first week in India, making it Nolan's highest-grossing film in India. With these numbers, Hollywood has now delivered three back-to-back hits in the Indian market, making India one of the top international markets for the industry. 

Financial journalist and founder of The Core Govindraj Ethiraj spoke to Komal Nahta, a veteran Film Trade Analyst and host of ETC-Bollywood Business, to understand the changing dynamic of the Indian entertainment industry and how Hollywood is a huge shareholder in the Indian boxoffice.  

"Hollywood is feeding the Indian box office because Hindi films do not seem to be doing too well," Nahta said.  

There is significant churning occurring in the Indian entertainment industry over the past few years. According to a report by the Federation of Indian Chambers of Commerce & Industry-Ernst & Young, the Hindi movie industry has lost over 17% market share since 2019. While the Hindi film industry is underperforming,  there are fewer than required box-buster releases to keep the revenues flowing. "When a movie that was expected to do Rs 200 crores, does about Rs 80 crores, in reality, there is a gap. If we look at a total of 7-8 blockbusters in a year, at least four of them should have been in the first half and that has not happened," Nahta added. 

However, Hollywood has maintained momentum, witnessing a 25% year-on-year revenue growth in 2022 from 2021. It has captured 10-15% of the Indian box office since the last decade. 

Meanwhile, between 2021 and 2022, the OTT space has also expanded by 20%, capturing 424 million audiences, says The Ormax OTT Audience Sizing Report 2022. Talking about the OTT wave in the Indian film industry, Nahta said "For the first time in my 30-year career, I am now saying that probably films may not be the same again because the discussion in households today is about web series, not about films."

Here are edited excerpts from the interview: 

What is your view on the present situation in the film industry?

Hollywood is feeding the Indian box office because Hindi films do not seem to be doing too well. We had Pathaan early this year, which did well followed by The Kerala Story after about five months. These two films have stood the box office in good stead. However, if we were to count on Hollywood, it was Mission Impossible- Dead Reckoning, Oppenheimer, and then Barbie. All these movies have hit the screens in quick succession, and it almost seems like we are dependent on Hollywood to make the trade go. It's a sad reality. 

 

Hollywood in aggregate accounts for only 6 -10 percent of the box office in India.

No, not even 10 percent. It is about 6 - 8 percent on the higher side. However, suddenly everything seems to be concentrated around Hollywood films, at least as far as the Indian box office is concerned. This is mainly because many big-budget, big-banner, and big-star cast films are biting the dust. They have hit the very bottom. For instance, it is not that they are earning lesser than expected revenues, say Rs 200 crores instead of Rs 250 crores. They are much lower at around Rs 100 crores and that is the shocking part.

 

What would be an example of that?

A movie like Satyaprem Ki Katha. One assumed that this movie would have also joined the 200-crore club post Bhool Bhulaiyaa 2 but it did not even reach the Rs 100 crore mark. See, it did well. Sajid Nadiadwala made his money. However, when we are looking at the industry or trade as a whole, when a movie that was expected to do Rs 200 crores, does about Rs 80 crores in reality there is a gap. It doesn't match.

 

In a good year, if you use pre-pandemic benchmarks, how many hits do you need to keep the supply side strong, and the entire industry (in the extended sense) humming?

Let me put it this way. At least 3-4 blockbusters, and 3-4 more minor hits. That is the minimum requirement. Whereas in the first seven months, we have had only two blockbusters-The Kerala Story and Pathaan. 

 

In your view, at least two additional big hits and all of the smaller hits have not happened?

No, not really. 

Are you looking at the financial year or calendar year?

I am looking at the calendar year and we have five months to go. The lineup is good. We have Rocky Aur Rani ki Prem Kahani, Tiger 3, Jawan and Dunki. So while all is not lost, we should ideally have had at least 4 blockbusters and some medium-level hits. There were just about 2 medium-level hits as against the 3-4 expected. So it is an alarming situation.

 

Do you believe that these hits should have happened in the first 6-7 months already?

Yes, if we look at a total of 7-8 blockbusters in a year, at least four of them should have been in the first half and that has not happened. 

 

The industry is shrinking because the overall revenues are decreasing. What is the impact of this on the downstream?

I think the confidence in the trade is shaken, which is why so many people have not been able to start films. Actors too are contemplating what's next, and are being cautious. I think it is a sorry situation, and the money flow has been affected. If there are no footfalls at the ticket counters, money is in short supply. In such a scenario, most would hesitate to produce expensive movies as they are unsure of their reception. 

The present crisis is also due to the belief that there is fatigue among the audience, that they are tired of going to the cinema. While I agree that there is a monetary crisis, audience fatigue is the bigger challenge. Most importantly, OTT is now a huge challenge. Everybody kept denying it and believed that these would coexist like television and films. But that is not the case. 

For the first time in my 30-year career, I am now saying that probably films may not be the same again because the discussion in households today is about web series, not about films. They discuss films when those films are released on the web, on the OTT platforms. That is not a very good situation. Previously they used to eagerly await watching a big banner movie on the first weekend of its release. Now, the conversation is more about that latest web series. So now the conversation has changed–it is no longer focused on films and that is the biggest tragedy.

 

From a monetary perspective, OTT is also supporting the industry. So is that making up for what is being lost potentially on the box office sales? Where is the balance if any?

See, the money is coming into the film industry because people are making entertainment content but the platform is changing. So while producers, actors, and technicians are having a good time, we need to remember that it is the cinema industry. The exhibition sector is in a state of panic as they have been investing heavily in properties and building cinemas. However, the footfalls are quite contrary or are different from what they thought they would be while investing huge amounts. So it is not the end of the entertainment industry. It is the end of the exhibition, cinemas for seeing--that is the alarming part.

 

Is there a silver lining or is there a bright side to all of this?

The bright side in my view is with Oppenheimer and Barbie doing so well, we need to take a step back and realise that it is our content, which is bad, and is keeping people away from the cinemas. If we also come up with compelling content, people will come back to the cinema. So that is the only silver lining.  

See, it is not like the Oppenheimer and Barbie equivalent of Bollywood has flopped. It is bad content and hence the flops. The only difference is that we would have said, "Oh, it's not good, yet it has done fairly well," if this had been the pre-Covid era when OTT was less popular. We now say, "Oh, it's good. But yet it has not even done reasonably well." A majority of the audience has decided to go to cinemas only once or twice a year. The regularity of movie-going, which was there in the pre-COVID days, is no longer there.  

And we're only speculating that perhaps this is just a phase; perhaps people will come back to the theatres once they have some excellent content. The only thing the professionals in the industry can do right now, aside from working extremely hard, is to hope that people will once again develop the habit of going to the movies regularly.