A declining rupee vis-a-vis the dollar is adding to the woes of many, but for the Indian film industry the forex gains in overseas releases have bolstered the bottomlines.
“Since August, we have gained an additional 10-15 per cent on an average from overseas theatrical releases,” said an official of Reliance Big Entertainment, the company behind the release of blockbusters Bodyguard and Singham. Bodyguard collected over Rs 190 crores, with overseas revenues contributing around Rs 43 crore.
“The strengthening of the dollar will help us, as we have a significant portion of revenues dependent on international markets that are reporting revenues in Indian rupees,” said Kamal Jain, group chief financial officer, Eros International Plc. The company is planning to release Shah Rukh Khan-starrer Ra.One across 300-400 screens abroad.
In the last two months, the rupee has depreciated by over 11 per cent against the dollar from around Rs 44.08 on August 1. On Monday, it closed at Rs 49.15 per $1.
“If money is given to any overseas distributor, it would have been given at the earlier rate. Now with the dollar strengthening, there is a forex gain,” said Suniel Wadhwa, an independent distributor. Industry officials said generally all monetary assets in foreign currency are reinstated at the end of every month.
According to industry insiders, most overseas distribution deals are done in US dollars. Bollywood is now spreading its wing to non-traditional markets, including Taiwan, China, South Korea, Egypt, Jordan, South East Asian countries and Latin America. “When 3 idiots was released in Korea in August, the distribution contract was done in dollars because it is easier to track box-office collections,” said an industry source.
In the the last two years, the overseas market has been fast emerging as a major revenue stream for filmmakers because of the growing interest in Hindi films. Most production houses are increasingly weighing on the concept of re-editing Bollywood productions to tailor them for the overseas audience.
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For instance, My Name is Khan set a bench mark by releasing the movie in over 65 countries with a shorter international version. Similarly, Reliance Big Pictures released Hrithik Roshan-starrer Kites in a 90-minute English version edited by Brett Ratner called Kites Remix.
A KPMG-FICCI report on the media and entertainment sector said overseas theatrical proceeds contributed to eight per cent of the total film revenue or Rs 660 crore in 2010, and is expected to reach Rs 950 crore, with a CAGR of 7.5 per cent. The size of the Indian film industry in 2010 was Rs 8,330 crore.