NextFin News - India’s film industry, the world’s most prolific by volume, is undergoing a structural reorganization as production houses pivot toward artificial intelligence to combat a deepening crisis in theater attendance and ballooning costs. While Hollywood remains entangled in labor disputes and regulatory caution regarding digital replicas, Indian studios are aggressively deploying AI to rewrite film endings, generate entire mythological epics, and automate dubbing at a scale that is beginning to decouple the industry’s economics from traditional physical production.
The shift comes at a precarious moment for the Indian box office. According to data from consulting firm Ormax Media, the number of moviegoers in India fell to 832 million in 2025, a sharp decline from the 1.03 billion recorded in 2019. Although ticket price hikes pushed total revenue to a record $1.4 billion last year, the underlying health of the industry is increasingly dependent on a shrinking pool of "mega-hits." In response, studios like Eros Media World and Abundantia Entertainment are turning to AI not just as a post-production tool, but as a primary revenue driver. Vikram Malhotra, founder of Abundantia Entertainment, recently announced an $11 million investment in a dedicated AI studio, projecting that AI-assisted or generated content will account for one-third of the firm’s revenue within three years.
This transition is most visible in the controversial practice of "creative renewal." Last year, Eros Media World utilized AI to alter the conclusion of the 2013 hit Raanjhanaa, replacing its tragic ending with a happier finale to appeal to modern streaming sensibilities. Despite a public backlash from lead actor Dhanush, who argued the technology "stripped the film of its soul," the commercial results were undeniable. PVR Inox, India’s largest cinema chain, reported that the AI-altered Tamil version sold 35% of available tickets during its release month—12 percentage points higher than the 2025 industry average. Pradeep Dwivedi, Group CEO of Eros, confirmed the studio is now reviewing its 3,000-title catalog for similar AI-assisted adaptations, viewing the technology as a vital hedge against a 44% drop in annual operating revenue.
The cost advantages are particularly stark in India’s high-demand genres of mythology and fantasy. Rahul Regulapati, head of the AI studio Galleri5, noted that AI is currently slashing production costs to one-fifth of traditional budgets while compressing timelines to a quarter of their original length. In Bengaluru, Galleri5 is already engineering digital "superstars" for films based on the Ramayana and Mahabharat, bypassing the logistical nightmares of massive sets and high-priced human talent. This aggressive adoption has attracted significant interest from global tech giants; Google, Microsoft, and Nvidia have already established early partnerships with local filmmakers to test generative tools in the Indian market.
However, the rapid pivot toward automation carries significant risks for the industry’s long-term brand equity. While the efficiency gains are quantifiable, audience reception to AI-generated content remains volatile. Critics and researchers, including Dominic Lees of the University of Reading, suggest that while India may become the global hub for AI filmmaking, the "uncanny valley" effect and the loss of human performance nuance could alienate the very audiences studios are trying to win back. Furthermore, the lack of robust union protections similar to Hollywood’s SAG-AFTRA agreements means the Indian industry is moving into a legal vacuum regarding the rights of actors whose likenesses and past performances are being "re-optimized" by algorithms. For now, the financial imperative of survival in a post-pandemic landscape is outweighing the philosophical concerns of artistic integrity.
Explore more exclusive insights at nextfin.ai.
