Ritesh Batra's The Lunchbox, which releases this week, is a significant film. Not because it got rave reviews at every major festival from Cannes to Toronto or because it could end up being India's entry to the Oscars-it is a critical film because it tests how hard Indian studios can push in their bid to revive the sagging overseas market for Indian films. The Lunchbox is a gentle, realistically-told love story of a widower and a neglected housewife. The overseas market, however, is "very star-driven, extravaganza-driven," says Avtar Panesar, vice- president (international operations), Yashraj Films, one of the oldest players in the NRI markets. "They (the NRI audience) don't want to see Life in a Metro (2007) because that is too Western. They want to see the glamourous side of India. There was some traction with Vicky Donor (2012) etc, but it is slow," thinks Pranab Kapadia, president (distribution), Eros International. As the Indian market matures, this creative disconnect has meant that growth in the overseas market has, "slowed down," says Gautam Jain, head of research, Ormax Media, a TV and film research outfit. From 30-40 per cent for large films, the proportion of box-office revenue coming from overseas has gone down to 20-25 per cent over the last decade. For smaller or medium-budget films, it is down to 10-15 per cent. At an overall level, the global market now brings in only 6.7 per cent of the total revenues for Indian films, down from 20 per cent or so in 2000. (See table) Some of the biggest overseas markets have stopped growing, while others are hiccuping. The US, UK and West Asia bring in 75 per cent or more of all overseas revenues for an Indian film. "The UK market has been flat over the last two years," says Rohit Sharma, head of international sales and distribution, Fox Star Studios. "Business plans are not drawn on the basis of the overseas market," adds Smita Jha, leader (entertainment and media practice), PricewaterhouseCoopers. At over Rs 10,400 crore, the domestic market is much larger and faster-growing compared to the Rs 760 crore overseas one. You could argue that Yeh Jawaani hai Deewani (2013) and Chennai Express (2013) crossed the $10 million mark in the overseas market, which shows the market is alive and kicking. They, however, are the exceptions, not the rule, say analysts. What happened to a market that was on steroids till six years back? The flashback Satyajit Ray's Pather Panchali (1955) was one of the first films to give international audiences a taste of Indian cinema. Later, Raj Kapoor's films charmed the Russians. Then Sooraj Barjatya touched a chord with NRIs in the UK and US with Hum Aapke Hain Kaun (1994). Labelled a 'wedding video' by most Indian critics, the film had 15 songs and featured umpteen wedding rituals. It was just the sort of film that made NRIs and other South Asians living away from home wallow in nostalgia. As luck would have it, an aspiring, post-liberalisation urban India too loved it. Soon Aditya Chopra followed with Dilwale Dulhania Le Jayenge (1995) and Karan Johar with Kuch Kuch Hota Hai (1998). And a whole wave of 'wedding ritual' or 'NRI' films followed. It was Bollywood at its best. And it defined and labelled us for life as a country that makes colourful films full of song and dance. The genre went on to create a Rs 980 crore market for (largely) Hindi films by 2008 in the rest of the world. This happened at a time when the Indian film industry was stagnating, even de-growing. The difference between the dollar and the rupee and better average prices in the UK and the US meant that a film which did well abroad could get 40 per cent or more of its revenues from there. Many film makers such as Chopra consciously targeted the overseas market and the urban Indian one to sail through the troubled 1990s. Over the years, things changed. The grant of industry status which allowed the flow of organised capital (1998), the tax breaks for multiplexes (2001) and the launch of digital cinema (2003) led to changes at the retail end. The tide began to turn. As capital began to flow into building screen infrastructure, the Indian industry started growing again. In ten years, what was seen as a dead industry has grown nearly three-fold. This growth has unleashed the creative spirit of this industry. Johnny Gaddar (2007), Kai Po Che (2012), Vicky Donor, Oh! My God (2012) are among a rising number of films that say new stories in new ways. And with an increasingly mature domestic audience, they work. Much of this experimentation however does not find favour with the overseas audience.
A close look at the big hits in India versus overseas over the last ten years shows that. Omkara (2006) or The Dirty Picture (2011) were hits in India, but very few wanted to see them in either the UK or the US. Kahanii (2012), one of the biggest hits in India last year, hardly did $2-3 million worth of business outside. "There is double-digit growth (overseas) but it is not comparable with growth in domestic theatrical," thinks Ajit Andhare, chief operating officer, Viacom18 Motion Pictures. Now factor in revenues from TV. Films are one of the biggest drivers of viewership on television, a medium bigger and more profitable than films. Therefore, cash-rich broadcasters happily pay top dollar for film rights (see table). This then creates a bigger, stronger market for Indian films within India. Why then should the industry chase markets that aren't very large and don't sync with the films that are working domestically? A question of size That's because the potential is evident. The big Indian hits earn Rs 35-55 crore ($7-10 million) overseas - and sometimes a little more - but these are few and far between. There are countless others that earn a few thousand dollars each. There may be a bigger market for many of these because the appeal of Indian films goes beyond just 22 million NRIs to local audiences in China, Morocco, Hong Kong and dozens of other countries with an 'affinity' for Indian culture. There are new markets such as Germany, Peru, France and Poland coming up. These need to be nurtured. It takes anywhere from Rs 66,000 to Rs 110,000 ($1,200-$2,000) per screen for a global release that should reach at least 500-700 screens. Not all Indian studios can spend this kind of money because they are, as yet, small. The largest, Eros, has a top- line of Rs 1,074 crore ($195 million). The world's top five studios range between $4 billion and $9 billion in revenues. Until half a dozen Indian studios hit a top-line of at least a billion dollars, becoming a power in the overseas market, a la Hollywood, is difficult. There was a flutter of hope when global studios set up production arms in India over five years ago. But Disney, Paramount, Sony or the others have rarely used their global offices to release an Indian film. Largely, the global studios' focus remains juicing more out of the Indian market, either through local or foreign titles. For instance, Disney owns UTV, one of the largest studios in India, but Disney has never distributed UTV's films globally. "We release Paramount pictures in India, but Paramount does not release our films overseas. The percentages are so small that it is not worthwhile to throw resources at it," says Andhare of Viacom18 Motion Pictures. Indian films start popping up on the global charts only after the first 100, sometimes first 200 films. Other foreign cinemas routinely do $10-30 million or more on the box-office numbers. Amelie (2001) did $33 million (Rs 154 crore), while Crouching Tiger, Hidden Dragon (2000) did a mammoth $1.28 billion (Rs 5,900 crore) at the US box office. The biggest hits out of India so far are, My Name is Khan which made $23.5 million (Rs 105 crore). The other is 3Idiots (2009) which made roughly the same amount at the box-office outside of India. There are some signs of change though. "The US (audience) is changing," says Panesar. For instance, Bhaag Milkha Bhaag (2013) did only a quarter- of- a-million dollars in the conservative UK market but $1.5 million in the US. "The US is the most progressive market and is open to new content and new concepts," says Sharma. Panesar points to West Asia, the only overseas market in which Yashraj Films releases the films under its youth banner, Y Films. The rejuvenation of the overseas market for Indian films then depends on two things. One, Indian studios acquiring scale, something that will happen over time. And two, global audiences accepting that Indian cinema is more than just Bollywood. The Lunchbox is a step in that direction.