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Box office mop-up jump 27% on 'lipstick effect'

11:31 PM Feb 19, 2020 |

The 'lipstick effect' has proved to be the saviour for the film exhibition business in 2019, with box office collections registering a whopping 27% growth amid an economic slowdown, Care Ratings said.

The 'lipstick effect' is a phenomenon where consumers prefer to spend on small indulgences in an economic slowdown, rather than blowing their money on big-ticket luxury items.

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Box office collections grew 27% to Rs 5,613 crore in 2019, and have notched a compounded annual growth rate of 13.4% in the last five years that have seen a slide in economic growth, the domestic ratings agency said.

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Apart from the shift in spends towards small-ticket items, improved content and a dip in goods and services tax (GST) on movie tickets also helped the industry, it said.

The average earning of a movie increased 15% to Rs 23 crore, while top-10 movies commanded a 42% revenue share during the year, it said.

'Avengers:Endgame', a Hollywood franchise, alone grossed Rs 373 crore to emerge as the most successful commercial film embraced by Indian moviegoers in 2019, it said.

Thirteen films crossed the Rs 100 crore collections mark in 2019, as against seven in the year-ago period, it said, adding that six Bollywood films crossed the Rs 200 crore mark in 2019.

Also Read: Does the deduction of entertainment tax affect a film’s box office collection?

In a new trend, the ratings agency said films are increasingly depending on the overseas market for box office collections, and cited the case of Aamir Khan-starrer 'Dangal', which grossed over three-fourths of its overall collections of Rs 1,968 crore from foreign shores.It explained that geographies like China, Middle East, Taiwan, Malaysia, Hong Kong and the UK have a growing appetite for Indian movie content.

The taxes in states like Maharashtra, Uttar Pradesh, Bihar and Karnataka have fallen from a high of 50%.

Apart from growth slowdown, the rise in collections was observed even as there is a growing proliferation of over-the-top (OTT) content platforms in India like Netflix and Hotstar.

"While OTT platforms offer the convenience of consuming content at any place and time, it cannot replicate the experience that a consumer gets while watching the same movie on an enlarged screen with superior technology and high-end sound systems in a theatre," it said. OTT platforms and theatres can co-exist, it added.

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