If Bollywood has a strong fan-base on its home turf, its popularity in foreign markets is no less. Every passing year, films from this segment are getting a bigger and better response from the audience abroad.
While China was a game-changer for Bollywood in terms of overseas collections, newer markets have become important for B-town. Overseas theatricals have emerged as an important avenue for producers, giving them an additional safety net.Overseas theatricals contributed approximately 16 percent to the overall segment’s revenue in 2017, an increase of approximately 3x from 2016, according to EY 2018 report.
An important trend that has emerged in recent years is that apart from big-budget movies, small and medium-sized films are also being distributed in foreign markets aggressively.In 2018 so far, eight out of 11 highest grossing films at the international box office are small and medium-sized films. Films like Badhaai Ho (still running in theatres), Raazi, Veere Di Wedding, Sui Dhaaga, and Sonu Ke Titu ki Sweety raked in Rs 70 crore, Rs 40 crore, Rs 38 crore, Rs 22 crore, and Rs 21 crore respectively. While the first three films on the list are big banner releases, the rest of the offerings have modest budgets.
The change began seeping in when Irrfan Khan-starrer The Lunchbox did a business of Rs 70 crore abroad. Now, producers are keen on distributing films no matter what the budget is, betting solely on the content.
For Bollywood movies, the US (30 percent), the UK (20 percent), and the Middle East (25 percent) together contribute to 75 percent of total overseas revenues. Other emerging markets include Australia, New Zealand, and South-East Asia, according to a 2017 KPMG report.
The Khans of Bollywood rule in certain territories, for instance, Aamir Khan is very popular in markets like China and the UK. Movie-goers in the US and Germany are fans of Shah Rukh Khan, and Salman Khan is welcomed with open arms in the Gulf countries. They are also admired in other markets ranging from Canada to Malaysia, and Japan to Turkey.
In fact, industry insiders believe that it was Shah Rukh Khan’s My Name is Khan that discovered the strong potential of overseas markets for Indian films. The film not only raked in an estimated Rs 147 crore in overseas revenue, it also found a mention on IMDB’s 2010 list of highest grossing Indian films in the international market, where it was ranked ninth.
The international market holds a lot of significance for Indian films, contributing to a significant portion of a film’s revenue. A KPMG report pointed out that over the next five years, overseas theatricals are expected to grow at a CAGR of 7 percent on the back of an increase in the number of movies, both Hindi and regional, travelling to overseas markets.
From 2010 to 2016, the segment’s contribution increased from Rs 760 crore to Rs 1,100 crore.
It is noteworthy that Bollywood alone is not enjoying success in overseas markets, regional films are making their mark too. This year, Tamil biggie Sarkar superseded Aamir Khan’s Thugs of Hindostan.
In 2017, Tamil action thriller Mersal crossed the $10 million mark (Rs 70 crore approximately) at the overseas box office, with the overall foreign earnings pegged at $11.1 million (Rs 78 crore approximately) in 12 days. The Vijay-starrer, which already had joined the list of all-time highest south Indian grossers worldwide, had at last count, made $372,000 in Australia, $694,000 in the UK, $655,000 in Malaysia and $26,000 in New Zealand.
Telugu action-drama Jai Lava Kusa had collected close to $1.39 million (Rs 10 crore approximately) over a five-day opening weekend. Over the same period, Punjabi film Nikka Zalidar 2 topped the box office charts in Canada, the UK and Ireland with weekend earnings of $250,447 and $88,400, ahead of all Hindi releases.
Tamil cinema has achieved about 50 percent of the kind of market Bollywood can currently boast of in the United Arab Emirates, while in Malaysia, it is ahead of Hindi cinema. In countries like Australia, The Netherlands, Singapore and increasingly, South America, regional language films have become very popular.
Although treatment of a movie, when it is sent overseas, calls for more money and expertise (subtitling or dubbing, revenue-sharing agreements that usually favour the theatre-owners), it is the higher footfall and screen count that makes up for the extra amount spent.
China and the US have the highest screen density. In fact, Indian film exhibition segment, in terms of number of screens, is less than 1/5th in size as compared to developed markets like China and the US.
In addition, there have been times when worldwide collections have turned around the financial performance of a film at the home turf. Examples include Jab Harry met Sejal, Secret Superstar, and Raees, among others.
Another important aspect that helps Indian films make money abroad is that audiences outside India usually have to shell out more, around three-to-four times, for movie tickets.
As the contribution of international markets to overall box office collections has become crucial, experts believe that the industry should go beyond English-speaking territories. With that, Indian films will not only strengthen the industry, but will also help boost tourism, create more jobs and add value to the Indian economy through taxes.