Indian media is full of reports about Bollywood’s increasing influence in the world movie industry and how it is catching up with the big boy Hollywood. Let us look at some facts.

Hollywood Bollywood Shah Rukh Khan Tom Cruise

Bollywood was born in 1899 with the production of a short film and Hollywood’s birth happened 11 years later in 1910 with a Biography melodrama.

Hollywood produces 500 films per year on average and has a worldwide audience of 2.6 billion whereas Bollywood produces more than 1000 (not consistently) films every year and has a worldwide audience of 3 Billion. In terms of vieweship, Bollywood overtook Hollywood in 2004 and has been leading ever since.

Hollywood’s Domination
Bollywood made a revenue of $1.75 Billion in 2006(estimated to rise to $3.4 Billion in 2010) which is only half the revenue of what one Hollywood studio, Walt Disney made in 2006 – and that is saying a lot. However, while Hollywood’s market inside the US has almost saturated, India’s 500 million population under the age of 20 will ensure that the market inside India will grow exponentially in the coming years.

Although Hollywood produces only a fraction of the number of films made all over the world, it garners a staggering 75% of total revenues. Also, 50% of its earnings(expected to grow to 80% in the next 20 years) come from the foreign market whereas for Bollywood it is 20%.

Hollywood has an overwhelming domination among the top grossers worldwide – almost all of the top 50 movies are made in Hollywood. It has virtually eclipsed all other film industries except Bollywood – for instance, the European film industry cut down to 1/10th of its size since 1910.

Spiralling Production Costs and Risks
The average cost of producing, marketing and distributing a Hollywood film is more than US$60 million though a Star Wars or Harry Potter costs around $100 million and only one out of ten succeeds. At the same time Shekhar Kapur’s ‘Paani’ which is tipped to be the costliest film ever to be made in Bollywood will cost $20 million and the average cost of a big movie is around $ 5 Million. 50% of the movies produced in Bollywood are never released and on an average more than 95% of those released results in losses.

Bollywoods NRI Connection
Around 15 million Indian expatriates living in different parts of the world account for over 65% ofBollywood’s earnings. An estimated $800 is spent by NRI’s in Indian movies and music. US (2 million Indian expats), UK(1.5 million) , South Africa(1 million of Africa’s 2 million Indian population) are major markets for Bollywood.

The Bottomline
Despite the hype surrounding Bollywood’s increasing influence in the world movie industry, it is a long way from being a threat to Hollywood’s influence.
Revenue-wise Hollywood movies does not depend on ticket sales alone. It follows the time-tested ‘franchise-formula’ where a major part of the revenue comes from other segments like TV networks, magazines, home-videos etc. Ofcourse, Bollywood is toying the same line but it is too early to say if a successful process is in place.

A few years ago, 70% of the money for movies made in Mumbai came as liquid cash from traders in real-estate, jewellery and the Mumbai underworld. Things have improved, but the financing of Bollywood movies is still shady business coming largely from the non-organised sector and with virtually no financing from the banking sector unlike Hollywood where production studios and the organised sector treat it as an industry and has a well established network. Bollywood was officially recognised as an ‘industry’ by the government only in 1998.

And if Bollywood basks in the glory of dubious ‘Shah Rukh Khan has more fans than Tom Cruise’ reports for too long, it may not be a happy ending afterall.

Sources: Variety International Film Guide, Asianfilms.org, Reuters

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