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Reliance Entertainment and T-Series' new $135 million deal and what it means for Bollywood's future.
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The Big Story
Remember going to the cinema?
That place where you would go to watch a three-hour-long Bollywood musical with one of the Khans, buy popcorns, drinks, or samosas—all expensive AF, and laugh, sing, clap, and cry along with them.
When was the last time you experienced that? I reckon it's been a while.
Ever since the coronavirus pandemic hit last year, movie theatres and the Bollywood industry, in particular, has had a pretty tough time. Major theatres across the country were forced to shut down by the Indian government, leaving the future of the $2.5 billion industry and its workers in absolute turmoil.
Take a look at some quick stats:
Indian cinema revenues dropped to $377 million in 2020, 80% less than the $1.9 billion it made in 2019.
Only 441 films were released last year, compared to the 1,833 releases in 2019.
The number of moviegoers dropped from 1.46 billion to just 39 million last year.
Single-screen theatres—those that only show one movie at a time—had the worst fate of all as around 1,500 of them closed down permanently. And while multiplex cinemas were hard hit, too, they were able to pivot to alternatives such as hosting live events and private screenings and implementing new QR-based food ordering.
But that's not all. Bollywood also had to deal with the streaming shift that was reinforced by lockdowns and curbs. Major streaming giants such as Amazon, Netflix, and Disney+Hotstar, witnessed a combined 40% surge in their Indian user base since the pandemic began.
Naturally, film production houses like Sony Pictures India sold the rights to their content to these streaming platforms in hopes of clawing back that lost revenue. And it worked; as per an EY report, production houses doubled their digital rights revenue to $471.8 million last year, selling around 30 to 40 films to streaming services in the last 18 months.
Despite such intense competition from streaming giants, two of India's biggest film studios are making their biggest Bollywood bet so far.
Anil Ambani’s Reliance Entertainment Ltd and Record label and Bollywood major T-Series have signed a $135 million silver-screen deal as they remain bullish on the box-office recovery. The duo has agreed to collaborate on more than 10 features, including dramas, comedies, action thrillers, and historic biopics over the next 36 months.
While Indian states are slowly opening up cinemas, T-Series Chairman Bhushan Kumar says Maharashtra—which accounts for around 30%-50% of a mainstream Hindi film’s theatrical earnings—still remains the biggest holdout. Both Reliance Entertainment and T-Series have postponed their releases multiple times since last year.
Bhushan, along with other industry executives, is now focusing on Diwali to revive the country's theatrical releases. But as we witness the third COVID-19 wave unfold right before us (yes, it's already here), along with the abysmally low vaccination rates throughout the country, the big Bollywood revival may have to wait for a while.
Until then,
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