EY Report Highlights Crisis in Indian Film Exhibition: Declining Revenues, Screen Shortage, and Calls for Urgent Reforms

By Sonu Tyagi, Editor & Founder, Approach Bollywood Newswire App & Approach Entertainment

In a comprehensive analysis released this month, Ernst & Young (EY) paints a stark picture of India’s film exhibition sector, revealing a industry grappling with shrinking revenues, falling footfalls, and systemic challenges despite the enduring love Indians have for the big-screen experience. Titled “The Story of Film Exhibition in India 2025,” the 36-page report, prepared in collaboration with the Multiplex Association of India (MAI) and other key associations, underscores the sector’s potential as a driver of economic growth, employment, and cultural influence—if policymakers and stakeholders act swiftly.

The report, backed by surveys of over 14,688 cinemagoers and insights from production houses, arrives at a pivotal time for Bollywood and regional cinemas. While India’s media and entertainment (M&E) sector grew at a compounded annual growth rate (CAGR) of 5.42% from 2019 to 2024, theatrical revenues stagnated with a negative CAGR of -0.2%, dropping from INR 191 billion to INR 187 billion. This lag contrasts sharply with India’s overall GDP growth of 6.6% and per capita GDP rise of 5.75% over the same period.

Indians’ Unwavering Love for Theaters Amid Headwinds

Despite the downturn, the report affirms cinema’s cultural stronghold. A whopping 81% of surveyed cinemagoers prefer theaters over streaming platforms, citing superior sound and video quality (75%) and the joy of “going out” with family or friends (60%). “Cinema has always held a unique place in India’s cultural and social fabric,” notes Kamal Gianchandani, President of MAI, in the foreword. “Theaters are not just venues; they are vibrant community spaces where stories come alive.”

However, the sector’s reach remains limited. With India’s population at 1.4 billion, only about 150 million (roughly 10%) attend movies in theaters annually, per industry estimates. Footfalls plummeted 41% from 1.46 billion in 2019 to 0.86 billion in 2024, while screens per million people dipped from 7.6 to 6.8. Single-screen theaters bore the brunt, declining by around 1,000 since 2018, and even major chains cut investments by 12%.

The success rate of films has also waned: The number of movies grossing over INR 100 crore fell 41% from 17 in 2019 to 10 in 2024. Genres like action/adventure top audience wish lists (55%), but drama, romance, and family films see lower uptake, often consumed at home via streaming.

Global Benchmarks: India Lags in Screen Density and Incentives

Drawing international comparisons, the report highlights India’s underperformance. While China boasts 64 screens per million people and the US 109, India trails at just 7. Screen counts grew marginally from 9,632 in 2014 to 9,927 in 2024—a 3% increase—compared to China’s 285% surge.

Other nations offer robust support: The UK provides enhanced tax credits for independent films, while China waived cultural fees during the pandemic and launched a 1 billion yuan subsidy for affordable moviegoing. Theatrical windows are longer globally—France mandates 4 months for TVOD, Germany 6 months for state-backed films—contrasting India’s shrinking 4-8 week norm.

Sanjay Jaju, Secretary of the Ministry of Information and Broadcasting, emphasizes reform: “India’s rich cinematic heritage deserves a future as dynamic as its past. By embracing reform and fostering collaboration between industry and government, India can redefine moviegoing.”

Key Ailments: Content, Windows, Piracy, and Costs

The report identifies multiple pain points. Content quality tops concerns, with 55% of cinemagoers and 78% of producers citing a shortage of quality stories and writers. Short digital windows exacerbate issues: 81% believe films hit streaming within 8 weeks, prompting 53% to wait for OTT releases in the last three months alone.

Piracy remains rampant, with 51% of media consumers accessing illegal content—76% among 19-34-year-olds—and levels spiking post-streaming launches. Economic factors compound woes: India’s GDP per capita ranks 140th globally at US$2,937, leading many to opt for cheaper alternatives like free TV or streaming. A 70% rural-urban income gap further limits access.

Pricing pressures persist. Average ticket prices (ATP) in India (US$1.6) are low on a purchasing power parity basis compared to the US (16.1) or Germany (13.0), but non-ticket revenues (like F&B) lag at 54% of ATP versus 72% in Canada. High GST (18% on tickets over INR 100), electricity costs (INR 12.3/unit for multiplexes vs. INR 3.4-7.7 domestic), and state-imposed price caps (e.g., INR 150 in Tamil Nadu) hinder profitability.

Nitin Datar, President of the Cinema Owners and Exhibitors Association of India (COEAI), stresses preservation: “Single-screen theaters are special—they are community landmarks, symbols of nostalgia, and key to authentic movie experiences.”

The Missed Opportunity: Untapped Pin Codes and Economic Potential

At its core, the report pins the crisis on a screen shortage, particularly low-cost ones. Out of India’s ~19,000 pin codes, 16,350 have no cinemas, leaving vast swathes underserved. Doubling screens to 20,000 could boost revenues by INR 6,600 crore, create 125,000 direct jobs (from today’s 138,000), and generate INR 950 crore in additional taxes.

“The core issue seems to be a shortage of screens, particularly low-cost theaters,” the report states. Piya Sengupta, President of the Eastern India Motion Pictures Association (EIMPA), adds: “With teamwork and support, we can make movie-going better, grow the economy, and share India’s culture with the world.”

Recommendations: Short-Term Fixes and Long-Term Vision

EY outlines actionable steps. Short-term: Extend theatrical windows (65% of producers say 4-week windows hurt performance), deregulate pricing, allow alternate theater uses (e.g., events, sports screenings), enable 24/7 operations, grant industry status for lower electricity tariffs, revise GST slabs to INR 300, and ensure censorship parity with OTT.

Long-term: Offer tax holidays for new screens in underserved pin codes, fast-track approvals, incentivize FDI, and promote “entertainment-in-a-box” mobile setups or multi-purpose community centers in rural areas (where 60% of Indians reside). Convert single screens to multiplexes and strengthen anti-piracy enforcement.

Shashank Raizada, President of the National Association of Motion Pictures Exhibitors – New Delhi, urges collaboration: “Through ongoing collaboration, forward-looking policies, and targeted investments, the cinema exhibition sector can further strengthen its role in India’s cultural economy.”

The report, informed by data from Comscore, UFO Moviez, and EY surveys, calls for a unified push to revitalize the industry. As Gianchandani concludes, “The journey ahead holds tremendous promise… driven by creativity, powered by technology, and sustained by collaboration.”

For the full EY report, visit ey.com. Approach Bollywood Newswire will continue tracking developments in this space.

Sonu Tyagi is an award-winning writer, director, and producer with a distinguished background in journalism and advertising. As the visionary founder of Approach Entertainment—a leading celebrity management, films production, advertising & corporate films productions, films marketing, events & entertainment marketing firm—along with Approach Communications (India’s premier PR and integrated communications agency), Approach Bollywood (a dedicated entertainment news wire), and Go Spiritual (a spiritual organization promoting spirituality, mental wellness, and social impact), he has redefined the landscape of Indian media and entertainment. Discover more at www.approachentertainment.com and www.sonutyagi.com