Just when cinemas made a strong comeback with both films and audience returning to the big screen, fresh curbs owing to rising COVID cases has once again slowed down the recovery of the theatre business.
"Delhi announcing cinema closure is a big blow. Jersey (Bollywood venture starring Shahid Kapoor) has shifted from December 31, which was a film the industry was confident about," said Rahul Puri, MD of Mukta A2 Cinemas, a chain by Mukta Arts, the company founded by veteran filmmaker Subhash Ghai.
He added that fresh restrictions and curbs are giving the audience pause and people are being cautious particularly in the North.
Echoing similar sentiments, Amit Sharma, MD, Miraj Cinemas, said, "Night curfews are impacting footfalls because in most of the cities night shows do really well. Plus, curbs by various state governments are now postponing the big-ticket Hindi releases."
Average occupancy for night and evening shows during weekends in pre-Covid times was 60-65 percent, while for blockbusters, it was close to 80-85 percent.
When it comes to Hindi releases, pre-COVID, Hindi films accounted for 43 percent of overall box office revenue in 2019, according to a 2020 report by EY, the consulting company formerly known as Ernst and Young.
Restrictions impact recovery
"The mood seems to have shifted to some caution around the country due to Omicron and this seems to be dragging down collections," said Puri.
Ranveer Singh-starrer 83, which was released on December 24, saw a sharp drop in business on the fourth and fifth day of its release with the film reporting collections to the tune of Rs 7 crore and Rs 6 crore respectively.
From delay in releases to drop in collections, all of this is coming at a time when films like Spider-Man No Way Home and Telugu venture Pushpa reported solid performance in theatres that resulted in strong footfalls and occupancy levels going up.
"November was a good month for us, and in December Miraj Cinemas reached 25 percent occupancy which was our pre-COVID number as a company on a 100 percent capacity and not on restricted capacity. So, when it comes to reaching to pre-COVID level, it was 100 percent recovery for us in December," said Sharma.
Analyst Karan Taurani, Senior Vice-President, Elara Capital, said multiplexes PVR and INOX were largely at the break-even point in November this year and in December they turned positive.
Miraj Cinemas' Sharma said that "Pushpa and Spider-Man No Way Home were winners in December. Spider-Man No Way Home is inching to Rs 200 crore business. Pushpa performed not only down South but also in the North; the Hindi dubbed version recorded strong box office numbers."
South superstar Allu Arjun's Pushpa in 11 days of its release in theatres has earned over Rs 186 crore worldwide, according to film trade analysts.
Adding to this, Puri said, "Occupancy levels for Spider-Man (No Way Home) and Pushpa have been historic. The films have done exceptionally well across the country and certainly, we are seeing lower footfalls post that for films like 83."
Sharma said overall cinema-going sentiment is getting impacted which will delay the recovery of the theatre business further.
Fresh curbs to affect many metrics
While ticket prices and spend per head were trending at par or above pre-pandemic levels in select states post the release of films including Sooryavanshi, Spider-Man No Way Home, Pushpa, among others, these metrics are likely to get impacted due to new COVID restrictions.
Taurani expects that there will be further delay in the theatrical window going back to the pre-COVID period of eight weeks which currently is four weeks.
PVR had expected the theatrical window to be back at its pre-Covid length of eights weeks by the next financial year.
Inox Leisure's Chief Executive Officer Alok Tandon had also expressed confidence that the theatrical window will soon go back to eights weeks during the company's Q2 FY22 earnings call.
Taurani expects even distributor share to get impacted due to new COVID curbs. The revenue-sharing model under which some portion of a film's box office collections goes to those distributing the film and the rest to the exhibitor underwent a change due to the COVID-19 impact.
Distributor share which is currently at 60 percent revenue in the first week, 55 percent in the second week and 50 percent in the third and fourth week, pre-COVID was around 50 percent in the first week, 42 percent in the second week and 37 percent in the third week. Due to the closure of cinemas in Delhi and restrictions, producers are likely to continue asking for a higher distributor share.Overall, the cinema business which was expected to see recovery in 6-9 months or by March next year may get further pushed to Diwali 2022.