Avatar: The Way Of Water released in India on December 16, 2022, and has gone on to break box office records since then. The film is expected to end its lifetime run at the India box office with gross collections of ₹480 Crore (nett ₹385 Crore), making it the highest-ever Hollywood grosser in India, beating the record of Avengers: Endgame (2019) by a comfortable margin of about ₹30 Crore.

In this extraordinary box office performance, what stands out specifically is the higher-than-usual contribution to the film’s box office from the Southern markets, especially AP-Telangana and Tamil Nadu. The five Southern states contributed about 49% to the film’s India box office. In contrast, films from the Marvel Cinematic Universe (MCU) typically generate 25-35% of their business from South India. Avengers: Endgame was just under the 30% contribution mark. Avatar’s South India box office is about 80% higher than that of Avengers: Endgame, but its box office in the rest of India (non-South) is about 35% lower than that film. Even the first film in the Avatar series showed significant South India skew in its box office.

This wide difference in how Hollywood in general (MCU films have defined and dominated the category over the years) vis-à-vis Avatar is fascinating enough for a deep-dive. Why did South India respond so much better to Avatar than to Avengers: Endgame?

This skew finds its roots in an understanding of the differences between the content of the two films, and how that aligns with the taste, exposure, and evolution of the audiences of the South and non-South markets. Here are four key reasons:

1. Greater appeal for the fantasy genre in the South

If we look at the genre tags for the two films on IMDb, Avatar: The Way Of Water is described as Action, Adventure, Fantasy; whereas Avengers: Endgame is described as Action, Adventure, Drama. The difference is essentially between Fantasy and Drama. Avatar is a high-concept film, that relies heavily on world-building, and creating an immersive experience to engage its audience. While MCU also has a considerable share of world-building, it relies on action, thrills, and humor to engage with its audiences. Both are visual spectacles, but in the former, the visuals are intended to immerse you into Pandora, while in the latter, the visuals are meant to exhilarate and thrill.

But why does the fantasy genre hold higher appeal in the South? The South film industries, especially Telugu and Tamil, have a long, rich and successful history of costume dramas. NTR and MGR made their mark as superstars by starring in such roles. Such is the impact of these roles on audiences that, till date, you can find NTR’s image as Lord Krishna on calendars in Andhra Pradesh and Telangana. MGR, once he entered politics, remained undefeated until his death.

This has created a strong association in the audience’s mind in the South markets, that dressing up as a completely different person (in case of Avatar, people from different planet) is part of spectacle in great cinema.

Additionally, more recent successful experiments in these fantastical and larger-than-life worlds and spaces (most notably Bahubali and RRR), even in the mainstream, have resulted in the audience having the ability to appreciate content of this nature. It essentially comes down to exposure, and to having better references, which makes fantasy a genre with higher inherent appeal in the south.

2. Content differentiation vis-à-vis local industry

Audiences watch films from other languages often to seek for benefits that don’t get served by their local content industry. The South Indian film industries thrive on action, the genre most MCU films belong to.

Like Avatar: The Way Of Water, another film 2012 (released in 2009) became one of the biggest blockbusters from Hollywood of its time, especially in South India. It didn’t have any major stars, was not in the superhero genre, and there was no element of franchise equity either.

The point is not that audiences in the South seek immersive experience more than action or stunts. But given that the South Indian film industries do action well, what viewers in these markets seek from Hollywood films will be their idea of ‘differentiated content’. Since ‘action’ is a box that local industries manage to tick very well, the immersive experience of a film like Avatar: The Way Of Water is appreciated a lot more, for the genre contrast it provides. In the non-south markets, because the need for action, stunts, and masala entertainers itself is not being fully satisfied by Hindi content, their expectations from Hollywood content have shaped up to be closer to MCU-like films.

3. Avatar’s leisurely narrative style

Many tentpole Southern films are known to be longer and more detailed at times, and the audiences in these markets are used to a certain style of storytelling that’s nuanced, and not exactly fast-paced. Anyone who has seen PS-I knows that the film, much like Avatar: The Way Of Water, is ‘slow’, and is dependent on creating a certain vibe using its atmospherics. Audiences in the South are more accepting of longer movies, as well as movies that are indulgent and slow-paced, as long as the pay-off is worth their time. This comes down to conditioning, given that many films in the South (especially in Tamil and Malayalam, and not so much in Telugu and Kannada), have been operating in similar narrative structures,  although in completely different genres.

4. Longer shelf life of audiences

The Telugu and Tamil audiences, unlike Hindi audiences, continue to be regular film viewers for a longer duration. Therefore, those who watched the first film in 2009 would still be regular theatre-goers, keeping the franchise’s continuity intact. In the Hindi film industry, the transition of audiences from regular to irregular to non-viewers (and vice versa) is a lot more fluid, and the 13-year gap becomes a franchise limitation in this context.

This is also evident in the findings of our Sizing The Cinema 2023 report. The overall theatrical audience in India witnessed a 16.3% reduction, compared to the pre-pandemic level, but the loss of audience in the Southern states was only 5%. Hindi theatrical audience, in contrast, diminished by 22% (see this article for more details). Hence, franchises with long gaps between films are better positioned to ride on the equity of the franchise in South India, than in non-South markets.