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Location Matters?

When it comes to investing in property, it is said that three things are of utmost importance: location, location, location!

What role does location play when it comes to investing in intellectual properties like motion pictures? As all of us know, there are multiple implications of the location/s a film is shot in. The obvious creative consequence, of course, is the impact location has on the look, feel and tone of the film. To cite a few recent examples, the setting was a critical element in the visual narrative of films like KahaaniGangs Of Wasseypur and Barfi!.

There are financial repercussions too, the most obvious being the cost of production. A scene in your script requires you to shoot a scene by the seaside? Clearly, shooting at Madh Island will be cheaper than shooting in Goa, which in turn, will be cheaper than shooting in Mauritius, which will again be cheaper than shooting in Hawaii.

But can location impact revenue too? Will someone staying in, say, Chandigarh, be more inclined to watch a film based in Chandigarh over one based in Bangalore? That is what we are trying to explore in this note.

While a detailed study getting into the finer details of theatre-level collections in each city would require much more space than that afforded by this page, let us look at the locational impact on territorial collections of some recent films:

The way to read this table is: Of the approximately Rs 55 crore that Kahaani collected at the domestic box office, 10 per cent came from the territory (West Bengal) that the film was narratively based in – Kolkata, West Bengal. Typically, a Hindi film earns 4.5 per cent of its all-India collections from West Bengal. Ergo, Kahaani’s collections were more than double (122 per cent) the norm.

The data above would seem to indicate that location does have a positive impact in the territories the film is based in – albeit to vastly varying degrees. So all things being equal, one can expect higher collections from regions they are based in and it may make sense to keep that in mind while scripting in the location of your film.

The moot point, of course, is the trade-off between the cost of shooting in a particular location and potential increase in collections from that territory. More importantly, the relative importance of that location/territory in the overall all India collections pie.

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