Mission Impossible? What does the global cinema business need to feel good again?
Insights into the future of the film industry
In Episode 9 of The Media Room, media expert and author Vanita Kohli-Khandekar speaks to David Hancock, Chief Analyst, Media and Entertainment at Omdia and a leading expert on the global film and cinema market. They talk about the supply and demand dynamics of the film market, why theatres are still relevant as a revenue stream, how streaming services and theatres can co-exist, the finer details of the trump tariff on film productions and much more. Tune in for insights into the future of the film industry and the changes needed to sustain it.
NOTE: This transcript is done by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on [email protected].
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TRANSCRIPT
Vanita Kohli-Khandekar (Host): Ethan Hunt and his IMF team are coming to save the world one last time. Tom Cruise's Mission Impossible The Final Reckoning is due for a global release on May 17. It is arguably one of the biggest Hollywood releases since Barbie and Oppenheimer.
The eighth and final film in a franchise that has grossed over 4 billion at the box office is getting a proper old-fashioned release. There was a trailer, the crew is touring every major market from Japan, Korea, United Kingdoms, the film just opened in Cannes recently. Cruise even climbed on top of the BFI IMAX dome in one of the publicity shots earlier this week in London.
Mission Impossible is old-fashioned in other ways too. It is one of those rare movies for which there is so much buzz and anticipation globally. In most cities, advance booking is breaking records.
There's an air of excitement and anticipation that is rare for any movie these days. And that is where my guest this fortnight comes in. David Hancock is Chief Analyst Cinema and Movies at Omdia.
He is an expert on the global film and cinema market and has played a fundamental role in the conversion of cinemas to digital projection and distribution over the past decade. I had a long chat with David on the state of the global film business and Trump's plan to tax movies. Over to David.
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Vanita Kohli-Khandekar: Hi David, welcome to the media room. Wonderful to have you here and it is very strange because I have you here in the week that Mission Impossible is releasing globally and this Saturday in India and I'm going to be watching it this Saturday. So you're the perfect guy for me to have a conversation with this week.
David Hancock: Nice to be here.
Vanita Kohli-Khandekar: David, you know we're all looking forward to Mission Impossible but you know we'll come to that later. What is the shape of the global film business as it stands right now and you and I had this conversation earlier. You know you've had a rough three-four years with the pandemic and with the writer's strike.
Are we looking at a full slate from Hollywood? We're already five months into the year. What is it looking like?
What is the shape?
David Hancock: So we're not quite at a full slate yet actually. Obviously the pandemic, the writer's strike and the actor's strike as well pushed back films from 2023-24 into 2025-26. So I would say we're not quite at a full slate yet.
I think probably 2026 is closer to a full slate and I think we also have to bear in mind that Amazon MGM has also announced that they are firmly behind cinema and they're going to have a slate of around 14 films by next year. They're going to pretty much replace Fox when Disney bought Fox. A lot of their slate was taken away.
So actually the number of films in the market was reducing anyway before Covid and I think by the time we get to 2026-27 we should have a full complement of where we used to be about 10 years ago with films. So from that side of things, from the supply of films, I think we are getting back to somewhere around about where we used to be. I think we still have a problem probably with the mid-budget, smaller films.
But again, I can see signs with people like A24 and Neon in the States. They're bringing into the market, Amazon as well actually, they're bringing into the market smaller titles which actually do very well and they also allow everyone to go to the cinema. It's not just one type of film, there's a whole broad range of films and actually for me that's the key.
It's about everyone being able to go to the cinema to see something they want to see.
Vanita Kohli-Khandekar: You mentioned the supply side, so I'm going to stick to it for a minute because we need to talk about the demand side also. That's where many of the challenges lie. And the excitement for MIA is precisely because it's a franchise film, it's familiar territory, it is Tom Cruise.
Is that all that seems to be working right now? Is that all that the supply lines are working on? Because in India also we see that phenomenon, the big films which get the audiences back to the centres and that is why that's what studios invest in.
So from a supply side, is that something which is holding studios back from investing in mid-sized to small-sized films?
David Hancock: That's a good question. I think that it's not just sequels, franchises and the big films that are doing well. I think that they've always driven the market.
We need to be clear about this. The top 10, 15 films in any country drive the market, they drive the box office, whether you have a good year or a bad year. It's the depth below that that actually broadens out the market.
So Mission Impossible, yes, it's the last instalment as well, of course. It's very cinematic. Tom Cruise is known to be a cinema lover, makes films for the big screen.
That helps. So those types of films really are going to do well in cinemas because they're made for cinemas. And then you have a film like Sinners, which came out last month in the States and globally.
Much more edgy prospects, not the same sort of feel at all. It's taken a quarter of a billion dollars worldwide for a film that probably most people didn't think they would. You've got Jason Statham, a working man, who's taken $100 million worldwide.
There are other films out there which, again, they may not make the headlines in the same way. They're not making a billion dollars, but they're definitely making enough to pay their money back, obviously. But they're also broadening the range.
So I think that, yes, we see the headline films, and they need to do well. Those ones need to do well for there to be a good year at the box office. There's a whole bunch of things happening underneath that level, which I think is getting back to somewhere where it was, but it's not where it was now.
That's, for me, probably the bit I'm looking at is a bit below the top 20 films. How are they doing?
Vanita Kohli-Khandekar: But if I remember reading your research correctly, the revenue pie has become pretty talk-heavy in the sense that the top 20, 30 films' contribution has increased over the years. It isn't that the middle and the budgets are bringing in greater amounts.
David Hancock: That's probably true. Certainly, the top 10 films in something like the USA, for example, take about 40% of the market. During COVID, it was half the market.
That was a bad thing. The higher proportion that the top 10 films take, the less successful the market is for me. Those top 10 films should be making around 30%, 35%, 40% maximum.
They're down back to about 40% now. But I think that the broader the market, the less the top 10 will be. For me, even 40% is pretty high.
Yes, an indication for me that actually, while those films are really important at the top 10, because they really do drive the big numbers, it's the ones underneath that actually you look out for to see the health, if you like. It's like a health check. If you have a successful, mid-level market, then you have a healthy market.
Vanita Kohli-Khandekar: That's such a nice way of putting it. Is it a healthy market, therefore? What shape is it in right now?
David Hancock: If I had a health check which was green to red, and green is healthy, red is unhealthy, then I would say five years ago, it was red, very deep red. Now, we're past the halfway mark between the two. I think we're edging back towards maybe a third of the way into green.
While the patient is not comatose and not in danger, it's still on the hospital ward, and it's still looking to get out sometime soon.
Vanita Kohli-Khandekar: Okay. What will it take for him to get to green fully?
David Hancock: More films and more people.
Vanita Kohli-Khandekar: More films, then?
David Hancock: More people into the cinema. Actually, not more film. The film side is interesting because production-wise, and India is obviously a massive producer of feature films, and you make in India one quarter of the world's feature films are made in India, but there are over 9,400 feature films made in the world in 2023, which is more than pre-COVID.
Actually, feature film production, which is feature films intended for cinemas, has gone back. It's way past where we were before COVID. So, in terms of what's being made for the cinema, that's very healthy.
I think that the key now is the bit you're alluding to before, is more about the demand side and getting people back into the cinema.
Vanita Kohli-Khandekar: And where are we there on the demand side? I mean, the habit is broken, the windows have shortened. I've got a litany of things which I want to throw at you, but I first want to get your take of where are we on the demand side?
Where are viewers and consumers as far as cinema is concerned?
David Hancock: So, it's complicated to unravel all this, but my sort of summary attempt to do that would say that people still like the cinema. When the right film comes, they go to the cinema. That's clear.
You have a Barbie, you have a Binecraft, you have those sorts of films. You can easily make a billion dollars in the cinema with a big film. That's still possible.
I'd say it's doable. It happens most years. So, when you have the right film, people go.
It's like going to the gym. If you stop going to the gym for a bit, then it's hard to get the habit back again. Now, I don't go to the gym, so I'm saying that theoretically, but I'm assuming that's the case.
But it's hard to get a habit back. If you break a habit, it's hard to get it back. I think that because of COVID shutting cinemas down for 18 months, two years, that was a habit that was broken, and people got used to watching films on TV.
They used to being at home, but actually not being out. I think that that habit has been broken, and I think most people, myself included, underestimated the length of time, the difficulty in getting that habit back again. So, I think that part of the problem in the past two or three years has been because it's been very broken with the supply, and there's not a momentum.
There's not films all the time to go and see at the cinema. So, you go and see a film, everyone gets excited, then there's no film again for three months you want to see, four months. So, again, you break the habits.
There's not this good supply of films that you want to see as an individual, not just everyone, but you want to see. So, if you say you go to the cinema five, six, seven times a year, you need to have a film every month or two that you like. The lack of films you want to see, not you individually, but one wants to see, has been a problem for getting people back into that habit.
But I think that once people do get back into a habit, and we have seen this, then it's still there. The desire to be outside, to be out of the house, to be with other people, to be in the cinema, to watch something on a big screen, that habit is still there. It's still something which is actually deeply ingrained in us.
And I don't fear for that at all. I think that side is fine. I think the problem has been the films haven't been sufficient enough to get people back in.
Then there's other pressures on time as well. You had a financial crisis two years ago as well. People didn't have enough money.
You have uncertainty in the world now as well, which never helped. So, there's all these things happening around the general economy and the general world, which are impacted cinema as well. But fundamentally, I think that people did change their habits a bit during COVID.
Some elements of people are struggling to get back to cinema in the same way they did before, partly because the film's not on offer, and partly because the habit is no longer there, or at least the habit has softened. So, it needs to get back into the habit.
Vanita Kohli-Khandekar: You said that they can get back to the habit. You've seen it. Have you seen numbers coming back to normal in any of the markets that you look at?
David Hancock: Yes, actually, there are countries in the world, some countries in Eastern Europe, some countries in, was it Argentina? I can't remember now, sorry. But there are definitely countries which have returned to almost pretty much where they were.
I define that about 95% of where they were before. So, there definitely are countries which are around about there. So, it's not as if it's an impossible mission.
The issue is we need to get there as a world.
Vanita Kohli-Khandekar: If I was to look at the global attendance in 2024, what are we at in terms of people COVID and in 2024?
David Hancock: 2024 was about 20% down on 2019. In fact, more than that, it was about 25% down on 2019. 2023 was about 20% down.
This year, we are expecting it to be about 20% down again. In fact, probably slightly higher than 2023 number. So, if you look at the global number at about $40 billion, this year we're expecting about around about $34.8 billion. So, yeah, pretty high up with the world's office back in 2019. So, yeah, now we're moving in the right direction.
Vanita Kohli-Khandekar: Is there something that studios, exhibitors need to do either on pricing or on screens which could help? Because one of the things, and apparently I can see that, and this is not just in India, across the world, that line events are taking off hugely. They're doing very well.
Especially in India, there's been a boom for the last couple of years. We've had Coldplay here, we've had Ed Sheeran here, and all sorts of things. So, clearly, people are stepping.
So, is there something that exhibitors need to do, whether it's on pricing, whether it's on where the screens are, and is Windows an issue? The gap between the film's theatrical and streaming release, it's become a point of contention in many countries. So, there are two questions there, David.
I'm sorry, I'm moving you to the next stop.
David Hancock: I'll deal with the live events first. So, live events, obviously, cinema does do live events in the sense that they can screen live events onto the screen. It's not quite the same as being at a live event.
You could argue that the cinema is the live event of movies. Instead of watching at home, you're out to see it, you pay a premium, probably, and you're seeing it at other people. So, it's effectively the same as a concert, to watch something on a screen, a movie, a live event.
So, I think that's probably less of an issue. The live part is a desire, I think, to be in the moment. That's the same everywhere for music, for sport, for things.
You want to be there and be present, and you can't really replicate that with cinema in the same way, other than a premiere, for example, that's probably a live event. So, I'll probably leave that one to one side for the moment. In terms of the Windows marketing, yes, there's a lot here to think about, actually.
Marketing is a big deal, and part of the issue now is that the window is shorter, that's clear. It is 90 days on average before COVID. It's about 45 days on average now after COVID.
So, it's halved. If you want to see a film in the cinema, you will still see it in the cinema. You will take your kids to go and watch Lido and Stitch in the cinema, because it's a cinema, it's a day out, it's a treat, it's an event.
So, you will still do that. Disney's been very good at actually putting things out and then keeping them clearly for cinema for a fair amount of time, and also putting a date on when they come back out into the home. I think part of the issue around the Windows is actually the uncertainty.
Quite often, you don't know when the film is appearing in the home, so you won't know when it comes out in theatres. Have I got three weeks to watch this in theatres? Will it be in my home in three weeks?
Will it be in my home in two months? Because Windows, some films still are in cinemas for two, three months without going to the home, but it's often not known in advance, yes or no, for that film. So, that's actually an uncertainty I think people didn't have before.
Before you knew, pretty much, it comes out in cinema, it'll be in my home in three months' time. I can get it on T-Board or premium VOD, whatever it's called, then you can get it at a set time. That's not the same anymore, and that's actually affecting people's decision to go to the cinema.
In terms of the length, you still see films in the home, people still go to the cinema to watch them because that's their preferred choice of watching that movie. So, I don't always see that Windows necessarily harmful to watching a film. What I think is more harmful at the moment is that the marketing of movies basically is more efficient than it used to be.
It's done with algorithms, it's done on social media, and it's effectively, movies have been marketed to people who are already going to go and see them. It's a bubble, that sort of self-containing bubble. So, they are not being marketed to those that they think, yes, this person is likely to go and watch our film.
So, we'll market it to them. Now, that's great because it's efficient. Marketing movies used to be very inefficient, used to waste 90% of the money.
But the problem with that now, as it's becoming apparent, is that you have people outside, some of those would have gone to the cinema to watch the film. Now, they're not being reached. There aren't the posters on the bus stops, there aren't the TV adverts, there aren't things that everyone can see and say, oh, yeah, that's good, I'm not going to see that.
And they're also being marketed far later. In fact, the marketing really starts two or three weeks before the film comes out. And then, the film essentially, the first weekend is almost like the first marketing point, rather than a month before or two weeks before.
The first marketing point of the first weekend, social media, word of mouth is very quick, it moves very quickly. And the film can make or break on that first weekend of social media, word of mouth. So, the initial marketing is not sustaining the film carrying on going for two, three months in the cinemas.
If the film doesn't make it straight away, it doesn't get a chance to stay on and sort of find its audience, it's off quite quickly. So, for me, this whole efficiency of marketing is great, make sure they're a marketeer, but it's not actually reached all the people that could actually go and see a film. By the time those people know it's in the cinema, then it's always come off the screens in cinema.
So, they're not going to get a chance to go and see it. I think this is where the 15-20% for some films is coming from, or where the down bit is coming from. They're not being reached quick enough, and by the time they are reached, it's come off the screens.
And so, either films stay longer in cinemas or they're marketed earlier, and there's more of a campaign to build up their awareness about a film. That seems to me that has to happen at some point soon.
Vanita Kohli-Khandekar: That is so interesting, because one of the feedbacks which I got, again, not to compare the markets, but from India, from a smaller team, was that studios are no longer marketing their films. They just do some digital stuff, release a trailer, and if the trailer gets 5-10 million views, they're very happy. But the theatre owner, he says, but who's watching the trailer?
Russians. I mean, how does this matter to a Hindi film? Who's watched the trailer somewhere else?
So, his point was the physical marketing is almost, and what you're saying about posters, and I remember the pubes used to be full of stuff for a musical or a film. Physical marketing, is it because of budget, or is it because everybody thinks everything has to be done digitally?
David Hancock: That's a good point. I don't know the answer exactly. I'm afraid I have no numbers to back the answer up.
My sense is that I think that there's pressure to go digital. It's seen as more effective, more efficient. I think the studios can't really win on this one, because they used to be criticised for being too inefficient, for wasting all their money on physical marketing that didn't reach the right people.
So, now they're trying to be more efficient using digital and social media, which is far easier to target people. They're almost being criticised for being too efficient. I don't know.
Studios say they're spending the same amount of money on marketing, but they're not saying that they've reduced marketing budgets. Exhibitors at the same time say, well, people aren't necessarily coming to our cinemas knowing about the film. So, you can put trailers into cinemas, but that's already a self-containing bubble again.
People who go to the cinema will see the trailer. Fine. People on social media algorithms, which like movies and cinemas, will have those trailers pushed at them.
That's fine, but they're probably going to go see it anyway. It's not so much the physical digital split, it's the cinema-goers, non-cinema-goers split. It's the frequent cinema-goers, casual cinema-goers.
What I think is happening is the casual cinema-goer is not being hit enough.
Vanita Kohli-Khandekar: You know, it's funny. I was speaking to Lior Cohen last week, before last. He was here in India for Waves.
He was talking about how artists are chasing the algorithm because they think the whole thing is about Instagram, but he says the whole thing is about making great music. He's the head of music for Google globally. I said, how do you bring in serendipity?
Because you see it across media, and I cover all media segments. Across media, serendipity is going out of the game. It is getting very precise.
That itself is limiting your market. It is ghettoising you to only your target users. Is it a fair assumption to make for films also, in some sense?
David Hancock: Streaming for me, streaming is a funnel. Streaming funnels you into things you already like. Cinema is a mirror, frankly.
It's a mirror. It reflects you, it reflects other people, reflects culture. And the more you can discover, the more you can, as you say, serendipity is a great word for cinema.
The more you can discover through exploration, through accident, through discussion with other people, you broaden your mind, frankly. And that's how the world, I think, is better off. If you funnel people down into just things they already like, then no one's learning.
I would say it's a fair assumption, and I would agree with that.
Vanita Kohli-Khandekar: I just want to come back to Windows for a bit. You said it went from 90 to 45 days. I thought it was a fixed thing in Hollywood, for example, in the US market, or UK market, in the developed markets.
What is it at currently, and why is it shifting? Because studios are uncertain. You mentioned some of this stuff, but is it not a fixed number that it will be four weeks or eight?
David Hancock: No, so it's never been a fixed number. There's very few countries, France is the main one, there are very few countries that have a set legal chronology. Mostly it's an industry agreement.
It's not a legal requirement, it's an agreement between parties. The agreement between parties before COVID was 90 days, and the agreement now, there's actually several agreements. Universal has a deal with a couple of cinema chains, where they can bring a film off in 15 days if it's not working.
They're 15, 30, 45. We've just done some research at Omnia recently, and my colleagues released a report on Windows. We do it every year.
It shows quite clearly. I haven't got the numbers in front of me, I'm afraid, but it shows very clearly that now that world no longer really exists. There's no longer industry agreements and such.
The studios can almost do what they want within a certain sort of framework. Each studio is different. A studio at Disney has nine, 10, very big films every year.
They tend to be family-orientated, animated, or kids have family. They tend to be in cinemas longer, because families take the kids longer to see a film. The Disney stuff tends to be, A, dated, so you know exactly when it's coming out on theatrical and on Disney+, but they also tend to be longer in cinemas.
They'll go on for 60, 70, 80 days in cinemas without going to Disney+, quite happily. Whereas another studio, Paramount, for example, might have a different strategy, different types of films. If you're making a film that's almost like a streaming film, then you might well put it into cinemas for one month, 30 days.
Say, right, it's done its cinema bit now. It's probably taken 80% of what it'll take in cinemas, will get on to streaming quickly, so it still has the word of mouth, still has the hype around the film, the marketing around the film. It still has the ability to be fresh and modern.
The first step in streaming is transactional, premium, so you're paying for it. You want to try and get people to pay for it while it's still fresh, while it's still valuable. That's broadly what's happening there.
It's really a question of the film, the studio, the overall strategy, and the types of films that people have in their slates, if that makes a big difference.
Vanita Kohli-Khandekar: Very interesting. I also think it could change if that particular studio has its own streaming platform. Disney has its own platform, Drew has its own platform, so their whole attitude changes.
We discussed this briefly, and you put out a note on LinkedIn also on the proposal to Donald Trump's idea to put 100% tariffs on films made outside of the US. Of course, it has to do with runaway productions, but just could you take my listeners through, what is the issue, and could this be a bad idea for film? I think it's a bad idea, but I'm just saying.
David Hancock: I'll let you know my view in about a minute and a half. I'll take you through what's happening. Runaway production has actually been around for a long time.
In the 1990s, countries started putting tax incentives in place to try and attract film producers to come shoot in their country. It's spread since the 1990s, it's spread in the past 30 years. There's probably over 100 systems in the world now, either regional, national, state level, lower levels as well, actually, of tax incentives to try and attract producers, film and TV, into people's countries.
Since 2002 was the first time I saw the term runaway production, there was a report done in Hollywood about films going to Canada mainly. Films would be shot in Canada because it was cheaper. Canada put in place production hubs, so Toronto is one of them.
The production hub essentially works as a film studio. The studios would go to Canada to shoot their film, it'd be cheaper in terms of labour, and the whole thing would cut costs, or at least reduce the pressure on costs, let's put it that way. That's spreading out to a lot of other countries.
UK and Australia, for example, are major production hubs for the studios, the American studios, but all the other countries around the world with tax incentives will also attract film producers because it would be cheaper to take your crew over there, make the film over there with cheaper labour, get the tax credit as well, so you get 20, 30, 40% off the final cost of the film. The whole thing works against the US, which has high labour costs and doesn't have the same system of tax incentives. It does have tax incentives, but they're not as attractive.
They may have been attractive 25 years ago, but now it's a different world. Saudi has a 40% tax incentive, and most countries have around 30%. That's a fact.
The top 40 films in the States in 2024, 12 out of the 40 were shot entirely in the States, and another nine were shot harshly, so very small amounts in the States, but mainly somewhere else. So 28 films of the 40 were shot majority in another country, but they were American films. I think what Donald Trump picked up on, or he picked up on that really, something I mentioned a month or two ago as well when the whole thing about tariffs started, was that's really the main problem they have, actually, is losing production to other countries.
Actually, the idea originally wasn't this at all. I think that what happened was that the word tariffs got taken too seriously in that sense, but the actor John Voight was tasked a few months ago with coming up with a plan to try and keep American productions in the States. John Voight presented his plan to Donald Trump last weekend, and the day after, Donald Trump came out with tariffs on overseas movies.
That's not a coincidence. Obviously, things were discussed during that meeting that weekend, but the whole plan is much bigger than that. The whole plan is not about tariffs.
The whole plan is actually a tax incentive plan. It's more about co-production treaties, working with other countries. The U.S. has a right to try and keep their films in the U.S. That's fine. We all have that right, and this is a plan to try and do that. There is one part in tariffs in it, which is what you mentioned before. They call it a tariff.
For me, it's not actually a tariff, but there is a charge, 120%. If you shoot a film outside the U.S., whatever you gain at a tax incentive, you'll be charged 120% of that amount when you come back to the U.S. to screen it. So effectively, you pay 20% more than the money you've got from the tax incentive, which is almost like a penalty.
So it's a way to try and deter people from shooting outside the U.S. That's the tariff part.
Vanita Kohli-Khandekar: This is for American films, right?
David Hancock: This is for American films, yes.
Vanita Kohli-Khandekar: So suppose a Korean film releases, because I was thinking of reciprocal tariffs. That's what was in my head when I...
David Hancock: That's because that's what he said. He said films from outside the U.S.A. would be subject to a tariff. But I can't see anywhere on the planet where it says that.
It's really that the whole thing was about stopping American films shooting abroad. So in terms of a Korean film or an Indian film going to the States and being released, I can't see anything in the White Plan that says that's going to be charged. That'll be released normally.
In fact, it's quite a complicated area, really, because films are a service, not a good. It's not a good like a car or an air conditioning machine or whatever. It's not like that.
They're a service. And they're also a digital service, these days, especially on streaming. But even a film in the theatres is sent usually by satellite or broadband to someone.
So it's a digital transmission. Now, digital transmissions are actually exempt from tariffs under the WTO, the World Trade Organisation rules. There's a moratorium on digital transmission taxes, tariffs, until next year.
So you can't actually do that anywhere. They could put out the WTO rules and not do that. But I don't think the point of this was about penalising foreign films to be released in the USA.
It was more about trying to stop US producers shooting outside the US.
Vanita Kohli-Khandekar: And it's a fair enough thing that you should shoot American films in America, unless the location demands it.
David Hancock: Yes. And this is another interesting point as well, because in the text of the White Plan, it does say where a film cannot be shot in the USA. So there are exceptions.
There will be circumstances where you can shoot a film abroad. Because films are shot abroad for two reasons. They're shot for authenticity reasons.
So this is a Spanish film set in a Spanish location with Spanish backgrounds and Spanish people and Spanish cars. If it's a Spanish film, then really, authenticity demands and the creative team would like to shoot in Spain, because it makes it more authentic, rather than find somewhere that looks like Spain. That's one reason.
The second reason is, if you like, tax and financial. So one is authenticity, creativity, and one is financial. What they seem to be trying to do is to stop the financial ones going abroad.
If there's a reason to be shot somewhere else, and it's part of the creative vision of the film, I think that's actually more of a sort of a grey line. That's probably going to be a discussion to be had about whether this is a financial or a creative decision. But it clearly seems to be certainly targeting the financial decisions to move abroad.
Vanita Kohli-Khandekar: Yeah. Texas had introduced some incentives, I think, some years back, and they've been publicised by Matthew McConney and a whole lot of other people. There's some advert, I remember, of publicising the incentives that Texas states could shoot within the state.
David Hancock: Yeah, absolutely. Almost every US state has had an incentive at some point. There's very few US states, there's 50 states, and there's very few states that never had an incentive.
Quite often, for the smaller states, a tax incentive will be created for one film. Basically, someone like Nathan McGonigie says, I want to go shoot a film in Idaho or somewhere. Idaho state will put in place a tax incentive for that one film, basically, because there's very few films shot there.
That'll then get used, and it'll probably get taken off the statute books a few years later, because no one's using it. But then there are places which are very popular for shooting. New York and LA are the big two, but Texas, obviously.
Anyway, with good locations and infrastructure, you need infrastructure to shoot. You can't just turn up somewhere and shoot. You have to have caterers and roads and communications and lorries and everything else to make a film.
Vanita Kohli-Khandekar: It's an obligated thing, shooting a film anywhere. It's not just you carry a camera and head off somewhere. Two last questions.
One is a comment on the India market, because though our size and value is not anywhere close to Hollywood, but we are also a very film loving country. We love our films. It is a pretty locally dominated market, but it's going through the same thing of broken habit, and we have very low screen density.
Streaming is taken off. So, the same challenges. So, any comment on this market?
If you had to have a piece of advice, not specific to India, to studios and exhibitors and to people within the film ecosystem, in order to break this particular... I think jinx is a strong word, but you know what I mean. But if you had to get the market going, what are the two, three things you'd like to see in motion for this platform?
So, two questions, one comment on India, and two, three things that would get the market going.
David Hancock: I'll start with India first. So, you'll know your market better than I do. I understand markets from sort of market level perspective.
I haven't been to India. I've been an analyst for 35 years now, so I know a bit. So, India, the first thing I'd say is you're a massive film country.
You make two and a half thousand feature films a year. You have a very, very strong linguistic diversity of films. The people in India love film.
They love, I guess, TV as well, but they certainly love films. But at the same time, that hasn't translated into being the biggest market in the world for film. You are in terms of production, but not in terms of size, in terms of screens or in terms of revenue.
So, there's only about 10,000 cinema screens in India, 1.4 billion people, which as you say, is a very low screen density. Now, some of that's to do with geography, some of it's to do with financial sort of economic makeup. But you have, as a country, moved away from the old single screen model, which was the sort of big, big single screen cinemas, quite cheap, quite popular.
That is dying. Those screens are shutting down slowly. There's still a few, but they're definitely been closing down over the past 20 years or so.
The film economy, if you like, the cinema economy is becoming more geared towards the multiplexes, the modern cinemas, which tend to play a bit of a mix of Hollywood and Indian films, a bit of other stuff as well. Broadly speaking, I think it's a pretty successful market. I think there probably needs to be more screens, actually, but not necessarily in the same place as the screens that you have now.
So, I'd need to get more demographics of the country and the economic makeup of the country, but there probably could be more screens. Well, China has 90,000 cinema screens and the same number of people as you. You have 10,000.
You have 10% of the number as China. So, there's probably space there to grow in terms of screens. In terms of what to do about the jinx, well, I sort of think in a way they're doing it, it's getting bigger and more or less bigger films into the market.
I really think this is the key to it. I think that people love film going. They love films.
They love cinema where it's done right. Cinemas have to be good as well. They can't be horrible.
All cinemas have to be good. And that doesn't mean just a modern box. It means great design.
It means great seats. It means great service. It means great technology.
There needs to be a good space to be. The world has moved on since 20, 30 years ago in terms of old-style cinemas. No one wants to sit for two and a half hours in an uncomfortable chair.
So, that's got to be right. But if that bit's right, then it's all about getting them excited about films again. And if that requires great marketing, different marketing, then so be it.
Do that. But I don't see streaming, for example, as a conflict with cinema. Streaming and cinema, like cinema and DVD, like cinema and VHS, go hand in hand.
They're symbiotic. It's about consuming content. I don't like the word content very much, but you know what I mean.
It's about consuming film, TV. It's about consuming things. People that game a lot are high cinema goers.
People that stream a lot are high cinema goers. People that like watching things, playing things, engaging with film, TV, music, games, they like doing it everywhere. So, there needs to be the space for everyone to watch films in the environment they want to watch them.
And I'm okay with people watching a film at home. That's fine. It doesn't have to be in the cinema, always.
But as long as there are things being made for the cinemas that are cinematic, there need to be films for cinema that people want to go and see in cinemas. It can't be streaming films put into cinemas. It needs to be a film that actually, this is a cinematic film.
You need to see this in the cinema. It's created for cinema. It's made in a way that will thrive in the cinema.
And those films, we are seeing, we still have them, still plenty of them. We see the film studios in the States are very much behind that. They understand the value of cinema.
The value of cinema really is it creates value elsewhere. It creates a great starting point for a film to move into its life or throughout other parts of its life. So, it's all linked.
It's all interconnected. And one doesn't really compete with the other. All these parts of the chain have to be in balance.
And for me, it starts with cinemas and getting those films into cinemas that need to be in cinemas.
Vanita Kohli-Khandekar: No, in India, I use the phrase that cinema is the Gangotri of all value in our media ecosystem here. Because 70% of music in India is for film music. 25% of streaming and TV viewership is, in streaming it's probably larger, is films.
So, you cannot judge films only by the amount it collects in the theatres. Theatres are 60% of the revenues. There's a whole lot of other stuff.
And you're absolutely right. It's just that the theatrical system seems more broken than the other and therefore.
David Hancock: Yeah, well, the other ones were in the home. COVID was in the home. So, the other ones thrived in COVID.
I think that they've gone backwards a bit since COVID stopped. And so, they've had issues created by being too successful in COVID, of course, sort of. It's the other way around.
So, the balance is probably a little bit off all around actually at the moment still. But I'm very optimistic about that balance returning.
Vanita Kohli-Khandekar: I hope so. On that happy and positive note, and here's hoping MI does very well. Thank you so much, David, for joining us and explaining this whole thing to us.
Thank you.
David Hancock: My pleasure, Vanita. It's been a pleasure.
Vanita Kohli-Khandekar (Host): Hollywood has been through a double ringer because of the pandemic and then the writer's strike. That is why the celebration around Mission Impossible feels good. Much of what David says holds true for India too.
Habits are broken and so has supply. But that is a topic for another day and another guest. Happy watching for now.
