01. India.
Bollywood, Larger than Hollywood?
Based in Mumbai, India’s entertainment industry has long centered around “Bollywood,” which produces more than 900 Hindi-language films each year. Films in other Indian languages are also a large part of the industry, made in cities such as Hyderabad and Channai. Indian consumers buy more than 3 billion movie tickets annually. While growing rapidly, at about 14.1 percent per year, the industry remains small in terms of overall value because ticket prices are a fraction of those in the U.S. Nonetheless, by the end of 2014, annual industry revenue is expected to hit $5 billion. And it’s not just box-office sales: About 50 percent of the revenue for Hindi-language films comes from DVD sales and video on demand.
02. Nigeria.
“Nollywood”–Low-Cost Films with Lots of Action
Nigeria’s “Nollywood,” Africa’s largest film industry, produces some 50 films a week generating around $600 million annually. The films are made both quickly and cheaply; the BBC estimates that it costs between $25,000 and $70,000 to make a film in Nigeria and many recoup their production costs within two to three weeks. Most Nollywood films go straight to video and sell about 20,000 legal copies, but the most successful can easily sell more than 200,000. The challenge for producers is piracy.
Those pirated discs travel all over the world—throughout Africa, the Caribbean, the U.S. and Canada. Film producers and the Nigerian government are now trying to install digital source codes that would limit piracy and enable the industry to capture more revenue.
Those pirated discs travel all over the world—throughout Africa, the Caribbean, the U.S. and Canada. Film producers and the Nigerian government are now trying to install digital source codes that would limit piracy and enable the industry to capture more revenue.
03. China.
The Grand Prize in World Entertainment Markets
While homegrown content is on the rise, demand for U.S. television programs remains strong in China. Some 450 million Chinese legally watch videos online each year, and so far, most of those videos are American-made. Two of China’s largest video sites, Youku and Todou, merged in 2012 to become China’s largest online portal. Their original plan was to provide user-generated content and produce in-house shows, but the merged entity now mostly offers licensed content from Hollywood. China’s other main online video portal, Tencent, formed a joint venture called Hollywood VIP with four major U.S. studios—Warner Bros., Universal, Miramax and Lionsgate (Disney is now also involved)—to distribute content in China.
China bans YouTube and some television programs but from Hollywood’s perspective, the country offers a huge opportunity for those willing to play ball: Revenue from online video distribution in China rose to about $2.1 billion in 2013.
As costs for foreign content increased, domestic production rose by 45 percent in 2013. Youku Todou plans to spend about $50 million to create its own programming this year.
04. Latin America.
Promising Growth
Brazil’s online entertainment market is estimated to include 68 million users, while an estimated $1.2 billion is spent on DVDs annually. The DVD market is dwarfed by Brazil’s pay TV market, which generates over $9 billion per year. But as in India, Africa and China, piracy is a problem throughout Latin America. Market research firm IHS estimates that Mexicans spend about $360 million a year on counterfeit DVDs and Brazilians about $140 million.
DirecTV stands to gain the most from reducing piracy; the largest satellite operator in the U.S. also has some 18 million subscribers across Latin America. AT&T, which recently bought DirecTV, notes that only 40 percent of the households have pay television—meaning the market is far from saturated.
