Mumbai (Maharashtra) [India], April 1 (ANI): Film financing in India continues to remain structurally challenging, with film financiers entering projects at the earliest and riskiest stages while returns are realised much later and with significant uncertainty. Industry observers note that film financing looks more attractive on paper than in practice and in recent times the underlying risk-reward imbalance for financiers has only intensified.

India's media and entertainment industry crossed Rs 2.5 trillion in 2024. However, film revenues declined by 5 percent to Rs 187 billion even as more than 1,600 films were released during the year. Performance concentration also became more visible, with only a limited number of films achieving substantial box office success. At the same time, digital and satellite rights witnessed moderation in value as buyers adopted a more selective approach.

For traditional financiers, this creates a recurring challenge. Capital is deployed during development or production, where uncertainty is highest, while monetisation depends on multiple downstream factors such as theatrical performance, streaming deals and ancillary rights. Delays, cost overruns and shifting release timelines further add to the pressure, often forcing early or suboptimal sale of rights.

The core issue lies in how and when these rights are monetised. In many cases, rights are sold prematurely to manage cash flow constraints or repay investors, rather than being leveraged at their peak value.

It is this gap that CineNow's Rs 1,350 crore Secured Participation Fund is addressing through a film-tech driven approach. The company's slate-based approach treats film IP as a collateralized asset that grows in value across different stages, from development and casting to production and distribution readiness. According to the company, this staged value creation allows investors to leverage technology and exit before the full release cycle has played out.

Tokenizing a basket of film IP enables partial or full exits before the film reaches theatres or downstream monetisation cycles. This, in effect, aims to provide financiers with greater control over timing and risk exposure.

According to the company, CineNow has also incorporated institutional features into its structure, including third-party fund administration, legal oversight, independent auditing and robust regulatory compliance. The company states that intellectual property under the fund will be registered in both India and the UAE, with the latter offering an additional layer of legal enforceability.

The structure also offers an alternative for producer-financiers. Traditionally, producers investing in their own projects face concentrated risk tied to a single film. Under CineNow's model, producer-financiers can participate through the fund while still backing their own projects gaining upside exposure to the broader slate and diversifying risk.

From a macro perspective, the company highlights that while financial markets may experience volatility during periods of geopolitical uncertainty, demand for entertainment content tends to remain relatively resilient. This positions film IP as a consumption-driven asset class with multiple monetisation avenues that can sustain relevance even during uncertain economic cycles.

Rohit Dalmia, who is leading the initiative, said that film financing has historically operated as a fragmented and relationship-driven market with limited structural safeguards for investors. He added that while films have always had multiple revenue streams, the absence of early and timely liquidity has often led to inefficient monetisation.

Industry participants believe that models such as this could signal a rapid shift towards more structured and institutionalised film financing in India. By focusing on risk diversification, asset-backed structures and improved timing of capital exits, such frameworks attempt to eliminate unsecured bridge financing and redefine how financiers engage with the film economy.

CineNow Limited has been established in the British Virgin Islands as a special purpose investment vehicle focused on financing, owning and commercially exploiting film intellectual property originating from India's entertainment sector. (ANI)