How digital cinema is changing the film business

December 23, 2011

Source: Business Standard

Total revenues of the film business have more than doubled in the six years – in India

Having revived both cinema advertising as well as single-screen theatres, digital cinema is transforming the economics of the film business in India.

Take a deep breath, relax. That is what the two leading digital cinema companies in India should be doing. At over 5,600 screens in all, Real Image and UFO Moviez have digitised more than half the total single screen market in India. Both are making operating profits and Real Image has actually broken even. Why then are they still ramping up at a breathless pace?

Because size does matter—for both these companies and for the Rs 14,000 crore Indian film industry. It is size that will determine the leader in the world’s largest film-producing and ticket-buying but least profitable country. The total revenues of the film business have more than doubled in the six years since the first major digital cinema roll-out began in 2005. Of these, box-office revenues have grown fastest thanks to multiplexes and digital single screens.

The latter now bring in more than half of the total box-office revenues. Yet, for digital cinema to fully realise its potential, it has to prove to advertisers that, “Cinema is no longer a fringe medium,” as Arvind Ranganathan, CEO, Real Image puts it.

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