By Shailesh Kapoor
Last weekend, Union minister Ravi Shankar Prasad gave a press statement, where he cited the combined first-day collections of War, Sye Raa Narsimha Reddy and Joker (Rs. 120 cr) to “prove” that there is no slowdown in the Indian economy. This comment, which can form a case study in a Logic 101 class on how not to construct an argument, has been the subject of many jokes and memes on social media over the last week.
For most people in traditional businesses, the slowdown this year is a harsh reality. If we speak specifically of the media sector, most TV channels and print publications have started reporting declining sales this year, forcing them to rationalise expenses, while they wait and hope for a better 2020-21. The digital and online businesses have managed to hold on somewhat better, with the growth in data consumption countering the slowdown in some measure.
I’m not an economist, and any further comment on the slowdown is out of syllabus for me. But the specific 120 Cr comment is definitely in my territory. The chart above and below captures the movement of the total box-office in India from 2013 to 2019. These are box-office collections across all Indian languages put together. Gross (pre-tax) numbers have been considered, as tax burden on film tickets has changed because of the arrival of GST, and then the change in the GST slab earlier this year. The numbers for 2019 are estimates for the entire year, based on the collections so far.
A first look at the chart itself should tell us that there hasn’t been much of a steady growth in the box-office business in India over the last few years. The CAGR over the period 2013-2019 stands at a mere 5.6%, and even the best growth years have struggled to go much beyond 10% growth. Importantly, some of this growth is seller-led, coming only because of the continuous growth in ticket prices. Footfalls have remained largely stagnant, and even fallen in specific years.
The other story in the chart is about how small the number Rs 10,450 cr is in itself. If you are aware of even the ballpark in which television revenues operate, you would know that the box-office collections from across the entire country can’t match up to the revenues of some of the big TV networks in India. Not that television is a very big industry to begin with.
Hence, to even quote box-office as any indication of the health of the economy is fallacious and contentious. But if entertainment can provide fodder for more entertainment, however unintentionally, who’s complaining?
By Your Editor