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China could beat US as largest theatrical box office market: Mike Ellis

Interview with President & MD Asia-Pacific region, Motion Picture Association

Vanita Kohli-Khandekar 

Mike Ellis
Mike Ellis

Simplification of clearance procedures for shooting and a robust tax-incentive regime will help India attract big-budget productions, Mike Ellis, president and managing director, Asia-Pacific region, Motion Picture Association, tells Vanita Kohli-Khandekar

What are the big challenges that the Indian and Asian film industries face?

India is already the fifth largest international box office market in the world after China, Japan, France and the UK. As the Indian audience evolves and grows, there will be scope for more business opportunities. In 2013, the Indian motion picture and television industry contributed $8.1 billion to the nation's economy, equating to 0.5 per cent of the gross domestic product and supported a significant 1.8 million jobs. There is an immediate need to review the complex tax system, increase screen density numbers in the country, control rampant piracy and introduce a robust production incentive regime to increase industry growth.

Today, foreign and local producers are constantly looking for ways and means to maximise their return on investment. From a production perspective in India, there are multiple challenges faced by filmmakers during the clearance process at the regulatory and administrative level, including at the application stage. These barriers undermine the potential of film productions and its allied industries to grow. Transforming India into a global film-shooting destination will require establishing film commissions to act as a one-stop-shop coordinating with local government and filmmakers to provide all the necessary services for film shoots, in addition to promoting film tourism.

If you had to make comparisons - size, profitability, business dynamics, consumption patterns - between the three-four key markets in Asia, what would they be?

The Asia-Pacific region is the number one international box office region, at $12.1 billion. Seven of the top 20 international box office markets are in the Asia-Pacific. By the end of 2014, China's total box office reached a record $4.8 billion. It is now the second largest theatrical box office market in the world. The market has witnessed phenomenal growth rates in the past few years adding 13 screens a day in 2014, after peaking at about 18 screens a day a couple of years ago. At the current rate, China could surpass the US as the largest theatrical box office market by 2018. In 2014, China added 1,015 cinemas and 5,397 screens bringing the national total to 5,615 cinemas with 23,592 screens. This equates to about 50 per cent of the total of 47,349 screens in Asia-Pacific.

The benefits of China's film industry go beyond box office numbers. In 2013, MPA released a report by Oxford Economics showing the film and television industry contributed over $42.1 billion to China's economy, and generated more than 4.5 million jobs. This growth would not have been possible without the government's support in terms of investment in theatres, support to co-productions and helping attract world-class cinema technology to improve the movie experience for audiences.

As MPA, if you had a piece of advice for the Indian industry what would it be?

India has a lot going for it as a destination for film tourism, given its huge range of locations, vast cultural diversity, trained film crews and low production costs providing low barrier entry points to shooting films on location. Still, India faces hot competition from a number of Asian countries that offer a range of film production and tax incentives. Simplification of clearance procedures for film shooting, support to productions through a robust tax incentive regime, and adopting global best practices, will help to attract big budget productions and in turn boost inbound tourism.

Take what the Lord of the Rings trilogy did for both New Zealand's domestic film industry and for tourism. It delivered significant expenditure by the production company between 1998 and March 2002 of NZ$392 million. Add to that the mass employment generated of around 1,500 people in various capacities per week. The promotion of New Zealand as a tourist destination off the back of those films was astonishing.

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First Published: Tue, April 14 2015. 00:50 IST