Tussle with producers costs multiplexes Rs 24cr weekly

It's been 10 days since the producer fraternity went on strike against the multiplexes. Only one hindi film released and theatres are now empty. With no relief in sight, CNBC-TV18's Tanvi Shukla and Isha Dalal report that this summer may be a disaster for multiplexes.

It's literally shutters down for the country's big-five multiplex chains, which are mostly dependent on Hindi movies for revenues. As producers and multiplex owners continue to lock horns over the revenue-sharing formula, Cinemax, PVR, Inox, BIG Cinemas and Fame are losing around Rs 24 crore in revenues each week.

Even the release of Akshay Kumar starrer Tasveer 8X10 has not helped as producers refuse to even screen old movies at multiplexes.

Here's the math:

The big-five multiplex chains together have 1.62 lakh seats. Each seat screens at least 4.9 shows a day, that's 34.3 shows a week. This means every week, 54.55 lakh seats are available to generate revenues.

But weekly occupancy levels at most multiplexes stand at around 27% even with higher rates on weekends and holidays. This leaves just 16.36 lakh seats that actually generate revenues.

On average, a seat at a multiplex generates Rs 121 per show, with an additional Rs 31 on food and beverage. That's a weekly revenue of around Rs 24 crore for the big-five chains.

While chains like BIG Cinemas, PVR and Cinemax do get some revenues from regional and theatrical shows, it is just about 14% of their total revenues. And that's no justification for keeping a screen open.

With no Plan B, the IPL and the elections may be the only source of entertainment this summer.