Tolly & Kolly Battle with Bolly

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Posted on November 21st, 2009 in Movies, News

A recent report from Ernst & Young to the FICCI (Federation of Indian Chambers of Commerce and Industry) underlines the fact that the two southern film industries known as Tollywood, based largely in Hyderabad, and Kollywood, based in Chennai, are strengthening their grip on Indian cinema, with each now accounting for 34% of revenue. Bollywood now accounts for 25% with the smaller industries in Malayalam and Kannada taking 8% and 2% respectively.

Whilst overseas, Bollywood has a much stronger marketing profile – to the extent that all Indian movies are commonly labelled as Bollywood – an increasingly southern diaspora is also ensuring that southern movies are now commonly finding distribution deals in the west. Total annual revenue for southern movies is 1,700 crores with 5% coming from overseas. This compares to around 12% from overseas for Bollywood movies.

Of the remaining revenue streams, 75% comes from cinema admissions and television rights account for about 17%. However, it is generally accepted that the southern industries have so far failed to grasp new media such as the internet and to find ways to monetise them. This is an area of concern.

Typically, southern movies have much better budgetary control than their northern neighbours in Mumbai with an average film costing around 5-10 crores, pre-release distribution deals typically selling for 8-15 crores and a moderately successful release might take 12-25 crores at the box office. This year, more than 200 Tollywood movies will be released and approximately 120 Kollywood films.

Bollywood on the other hand has had to work harder than usual to make a profit this year with the top five production houses – UTV, Yash Raj, Eros, Reliance and Studio 19 – who account for 70% of all Bollywood films, reporting investments of 537cr against cinema revenues of 510cr. The studios have been damaged by the earlier Multiplex strike and too many movies jostling for position in the second half of the year. For the first time, they have had to rely on income from other revenue streams – estimated at around 150cr – to push them into profit. “The number of films that released this year has been high but we’ve had just two performing months,” says Vishal Shah of Fun Cinemas, “Content has also failed, which has led to the drop in box office collections.”

Kuch Toh Bolo!

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