India's cinema struggle: Falling screens and capital crisis demand gumption

The movie business in India is caught in a vicious cycle of falling screen count and, consequently, fewer films and no capital. Breaking out of it will require gumption

There are so many happy movie business stories, you just have to look for them. Take Sitaare Zameen Par. Aamir Khan Productions decided not to do any OTT deal until the film, which released on June 20, had its full theatrical run. The shorter the window between a film’s theatrical release and its appearance on OTT, the less likely it is that audiences will walk into the theatre to see a small film like this one, which is about the story, not about the star  — a la Pushpa 2 or Pathaan. Since he has been critical of the two- to six-week short window, actor Aamir Khan, who owns the eponymous studio, put his money where his mouth is. Sitaare Zameen Par’s success then brings courage to studios that end up doing terrible deals with streaming platforms to recover money before a release.

 

For another happy story, travel to West Bengal. When theatres started shutting down, going from 400 in 2000 to 140 in 2015, the largest studio in the region, SVF Entertainment, saw its collections dip. The producer of Chokher Bali and Raincoat, among other films, also owns the OTT Hoichoi and produces thousands of hours of streaming and TV programming. But this was a crisis. Theatrical revenue is the engine of the cinema ecosystem. Of the ₹20,000 crore that Indian films made in 2024, two-thirds comes from theatres. And it determines what streaming or television firms pay.

 

Much like Khan, SVF’s co-founder Mahendra Soni decided to tackle this head on. It started building, managing or acquiring screens across small towns and cities, reaching 53 screens currently. This will go to 75 by March 2026. As the screen count rose, SVF’s share of the net box office collection in West Bengal doubled.

 

For two decades now, India’s screen count — falling from 12,000 in the late ’90s to 8,000 or so now — has had studios wringing their hands. The world’s largest film-producing country has just six screens for a million people, compared to, say, 125 in the United States or 30 in China. And if you ask why more are not being built, theatre chains point to the 20-30 per cent occupancy of the current ones. They are right. But as SVF shows, there is another side to the story.

 

While a lot of investment is happening in screens, it is focussed in areas where ticket prices are high and quick returns are possible. When screens were dropping in West Bengal, Kolkata remained stable because it is a multilingual metro with higher average ticket prices. So Hindi, Hollywood, and Bengali cinema all have a home here. Outside of Kolkata, only Bengali films work. And without screens, that audience simply disappeared. When SVF revived theatres, entire towns came back into the game.

 

That brings this to the point of this column. There are ways out of endemic problems — it simply needs gumption. For too long the real issues — the lack of screens, of capital, and of decent marketing — have been hidden behind silly arguments. Multiplex versus single-screen film, OTT-versus theatrical, Hindi versus South — these are the squabbles of a market where the pie has not been growing. The domestic theatrical revenue in India has hovered between ₹11,000 crore and ₹12,000 crore for over five years. In 2023, a good year, 943 million tickets were sold. The “theatre-going population” stands at 122 million or about 11 per cent of the population. It is anywhere from 50 to 80 per cent in Europe and the US. The biggest hits have a footfall of about 35 million people or just 2 per cent of the population. That is because for a vast number of Indians, there is no local cinema.

 

Note that the cumulative consumption of cinema is huge. One-fourth of all TV viewing, a third of OTT and three-fourths of all music consumption is film. But it doesn’t reflect in our ticket sales.

 

Over three decades, a vicious circle has formed. The lack of screens means less money and therefore fewer films being made. For a short time, satellite — and now streaming — gave quick money, squeezing theatres further. Much of this was aggravated by the pandemic. The result — the main revenue source is asphyxiating, even while people continue to step out for entertainment. Only when two billion and more tickets are sold, when more people walk in to watch films more often, will the Indian film business reflect the country’s size and potential.

 

But this needs more than an SVF in West Bengal or a PVR-Inox in the South. It requires some state intervention too — maybe a tax holiday for building theatres since they are infrastructure? That is how the multiplex boom began in 2001. And it needs more non-strategic investors, a la Adar Poonawalla in Dharma Productions on the studio side.

 

The last, not-so-happy, story. Given the competition film faces from other forms of entertainment, it is a pity that studios do not apply their mind to marketing, which has become formulaic and totally online. At a Mission Impossible – The final Reckoning show recently, there was not a single poster or standee at Inox Insignia (Pune) for a selfie. Ditto for a Bengali movie friends saw there later, and for Sitaare Zameen Par at a Cinepolis. If movies are marketed only online and only to audiences who are likely to watch them, how will the market expand?

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