Hollywood films gain traction in India

Hollywood has always had the role of a bit player in India. While audiences queue up to see the latest blockbuster starring Shah Rukh Khan or Rajnikanth, Hollywood films have been mostly restricted to an urban, English-speaking elite and consequently only accounted for around 4-5% of India’s billion dollar-plus annual box office.

But that market share has been slowly creeping up in recent years and during 2012 the US studios have taken some giant strides in India. In April, Disney UTV released The Avengers on 800 screens, the widest release ever for a foreign film at the time, which helped propel it to become one of the top five Hollywood films of all time in India with a final tally of $12.7m.

In June, Sony’s The Amazing Spider-Man swept away The Avengers’ record screen count by opening on 1,200 screens and grossing $6m on its opening weekend. The film went on to take $14.5m, becoming the third biggest Hollywood film of all time behind Avatar and 2012. The following month, Fox Star Studios’ Ice Age 4: Continental Drift scored the biggest debut in history for an animated film in India, grossing $1.5m from 238 screens.

All these films reaped the rewards of steady growth in multiplex screens and average ticket prices in India, along with the growing experience of the US studios as they grapple with this idiosyncratic and fragmented territory.

For example, Ice Age 4 benefitted from being dubbed into multiple languages, a strategy that is common practice for action blockbusters, but which Fox decided to also use for animated films. As Fox Star Studios CEO Vijay Singh explains, the experiment started with Ice Age 3, which was dubbed into Hindi and grossed a healthy $2m in 2009.

“With Ice Age 4 we tried to push the envelope further and also dubbed the film inTamil and Telugu,” Singh explains. “The strategy worked as the film did really well in the languages as well as the English version.”

The US studios have also started subtitling the English versions in English, making Western dialects and strong accents easier to understand. It’s also become common practice to open films day-and-date, or even a few weeks before, their North American release. In a market so heavily dominated by local content, they’re also finding that forging alliances with local studios can help.

Several US studios are now deeply embedded in the Indian market. Since completing its acquisition of UTV Software Communications, Disney has merged its India operations with those of the Mumbai-based powerhouse and releases all of its films through new entity Disney UTV. Similarly, Paramount’s films are now handled by Viacom 18, the 50:50 joint venture between Paramount parent Viacom and India’s Network 18.

Fox Star Studios, which releases all Twentieth Century Fox titles in India, is a joint venture between Fox and its News Corp sister company Star India. And following its deal with DreamWorks, India’s Reliance ADA Group handles all of the US studios films in India; along with select titles from US sales company IM Global in which it holds a majority stake.

All these companies - UTV, Viacom 18, Fox Star and Reliance Big Pictures - are major producers of Hindi-language content and are also moving into production of regional-language films. These tie-ups give the US studios extra clout as they can now deliver multiple content streams to local exhibitors.

“When you can offer both Hollywood and Bollywood, you get better terms and usually more screens,” explains Reliance head of distribution & acquisition Utpal Acharya. “Exhibitors think if I mess around with this guy, I may not get the next big Bollywood release. You can dictate when you have Spider-Man, but you struggle with the smaller English films.”

The remaining studios, which don’t have local partners, all have their own offices and distribution set-up in India. But in some cases, they opt to leverage the strengths of a local distributor by selling theatrical rights, at least in situations where the numbers make sense. Warner Bros recently sold theatrical rights to The Dark Knight Rises to Mumbai-based DAR Motion Pictures, which described the deal as “the biggest ever acquisition in the history of Hollywood film distribution in India”. Released on 1,000 screens, the film went on to gross $9.9m to become the seventh biggest Hollywood film of all time.

But despite the growth, Hollywood still doesn’t have the easiest ride in India. Multiplex development is not as fast as in China and Brazil, due to building regulations and the slower than expected rise of shopping malls, and the country still only has around 1,300 multiplex screens.

The US studios also have to grapple with the fact that India has become an e-cinema market - there are currently around 6,000 e-cinema screens compared to around 400 DCI-compliant 2K digital screens. Around 300 of those 2K screens are 3D-enabled, a number that is not likely to explode until local filmmakers embrace the format. And the country still only has a handful of IMAX screens.  

All this means that Hollywood films still rely heavily on physical prints in India, unlike local films which can be distributed via satellite and released on up to 3,000 mostly e-cinema screens. Although not deemed worthy of such wide releases, US indie films can also take advantage of India’s booming e-cinema circuits. Multivision Multimedia’s recent release of The Expendables 2 raked in $2m from 800 screens on its opening weekend. Reliance plans to release Dredd on close to 600 screens this month, across all formats including e-cinema 3D.

Rising marketing costs are another challenge facing the US studios. Hollywood films are performing better due to aggressive marketing spends, but pricey TV remains the dominant advertising medium and to reach this multilingual nation, it’snecessary to advertise across many different channels. “For Hollywood films that have been dubbed, spend has gone as high as 25% of the rental value whereas before it was more like 10%,” says Reliance’s Acharya.

And yet the nation’s growing number of movie channels are probably one of the biggest factors raising awareness of Hollywood films. “Now we have at least two channels screening dubbed versions of English films so everyone is aware of the content,” says Gaurav Verma, director of India Theatrical Distribution, Studios at Disney UTV. “Everyone is aware of Iron Man because the films have been dubbed and broadcast across 14-15 different languages in India”.

The US studios are also starting to see e-cinema as an opportunity rather than just a problem and using the format to distribute trailers for their films. “We can attach trailers for a big Disney film on to the screenings of a major Bollywood or Tamil film in the e-format cinemas,” explains Verma. “That kind of cross-promotion really helps.”

And beyond all the strategising and collaboration, there are also changes slowly taking place in Indian society that are likely to boost Hollywood and eventually other foreign films. As DAR distribution head Murli Chhatwani observes: “The younger generation aged 15-30 years actually seems to prefer Hollywood and edgier local films to classic Bollywood”.

So far only certain genres and franchises seem to be working, but a few years ago even Batman didn’t have wide recognition in India. With the Indian population now increasingly travelling, using smart phones and watching global TV, it may only be a matter of time before the market opens to a wider range of films.