More movies in the making, but fewer screens to go around

Multiplexes in major cities are more open to mid-budget and regional films, but tier-two and tier-three markets remain thinly served. As a result, the industry remains divided on whether the increasing volume of films can find adequate theatrical infrastructure.

Recent deals that underscore the shift include Reliance Industries Ltd-owned Jio Studios’ acquisition of a 50.1% stake in Sikhya Entertainment Pvt. Ltd. Meanwhile, music label Saregama has invested ₹325 crore in an initial stake in film-maker Sanjay Leela Bhansali’s company. Universal Music has acquired a 30% stake in Excel Entertainment.

“These kinds of deals can meaningfully increase output, especially in the small and mid-budget space where studios are better placed to back new voices, contained stories, and sharper genres. That said, more films do not automatically mean more theatrical films,” Bhuvanesh Mendiratta, managing director of multiplex chain Miraj Entertainment Ltd, said.

“Many of these titles will still be built with a hybrid mindset, aiming to create strong IP (intellectual property) and then choose the best window based on audience pull, genre, and marketing scale,” Mendiratta said.

India’s screen density remains low relative to its population, with prime showtimes in multiplexes concentrated in major cities. “Big cities have options, but depth in tier-two and tier-three depends on local market confidence, language fit, and promotional push…films can release, but the real question is whether they can get a meaningful run with enough shows to build momentum,” Mendiratta pointed out.

India does not have adequate or evenly distributed theatrical infrastructure to absorb a sustained increase in smaller films, Raheel Patel, partner, Gandhi Law Associates, said. Screen scarcity, show-time prioritisation for tentpole releases, and high exhibition costs mean that only a fraction of such films will get viable theatrical runs; most will either see token releases or direct-to-OTT strategies, he pointed out.

The persistent concentration of screens in metropolitan and semi-urban centres, coupled with the dominance of multiplex operators and the continued decline of single-screen theatres, imposes severe constraints on equitable and timely theatrical access, said Tushar Kumar, advocate, Supreme Court of India.

“The anticipated expansion in output will undoubtedly generate new commercial opportunities through slate financing, bundled acquisitions, and long-term commissioning arrangements. However, it will also engender material challenges in the form of content oversupply, intensified competition for visibility, and progressive margin compression,” Kumar said.

Studio partnerships with boutique content houses are turning niche filmmaking into a steady pipeline rather than isolated experiments. This will increase the volume of character-driven, regional, and story-focused films, said Alay Razvi, managing partner at Accord Juris.

For theatres, it creates opportunities for curated releases between big tentpole films, helping fill calendar gaps with targeted content.

“Increased supply creates both momentum and pressure. OTT platforms are shifting toward portfolio-based acquisitions rather than aggressive single title bidding, giving producers steadier pipelines but lower headline prices,” Razvi said.

Oversupply can compress margins unless films offer clear audience data, franchise potential or built-in fan bases. Theatrical distributors may demand stricter recovery terms and tighter release windows, he added.

Cash for content

Consolidation of this scale typically happens during periods of disruption, when financing models, audience behaviour and monetisation strategies are all being recalibrated.

These transactions go beyond backing individual films. They reflect a strategic shift toward long-term partnerships, with studios and music labels seeking deeper control across the value chain — from IP ownership and music rights to global

“This consolidation is likely to bolster output across segments, including niche, non-mainstream and small-to-mid budget films, particularly for boutique producers such as Sikhya, whose strength lies in story-driven cinema that often struggles to independently crack pre-sale or platform-led deals,” said Anushree Rauta, equity partner, head of media, entertainment and gaming practice, ANM Global.

However, increased output does not automatically guarantee wider theatrical success. “India continues to face a structural deficit in cinema screens, uneven regional distribution infrastructure, and a sharply narrowing theatrical window for films without established star casts,” Rauta added.

On the digital side, platforms are becoming more cautious and increasingly tying acquisitions to performance metrics. Large studios, with slate-based deals that bundle smaller films with marquee titles, are better positioned in this environmen, pressurising independent producers and acquisition prices, Rauta said

At a broader level, the industry appears to be shifting from a star-centric production model to a studio-led ecosystem. Media conglomerates are positioning themselves as long-term custodians of intellectual property, controlling decision-making and building franchise pipelines rather than chasing one-off box-office wins.

Ankit Sahni, partner, Ajay Sahni & Associates said the opportunity lies in scale efficiencies – better bargaining power, portfolio licensing, and systematic monetisation of IP across formats and territories.

“Last year, the Indian box office had a strong run, with overall collections crossing nearly ₹13,000 crore. What really mattered was not just stardom alone, but the diversity of films across languages, their depth, and consistent performances,” film producer Anand Pandit said.

But audience consumption patterns have evolved post-pandemic, he added, making balanced planning critical. For production houses, theatrical revenue is now just one part of the equation, alongside OTT, overseas markets and global releases, reshaping marketing strategies.