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Reduction in govt spending a concern for cinema advertising, says UFO Moviez

On the corporate side, the weak performance of films at the box office is pushing advertisers away from cinema advertising.

November 03, 2022 / 05:10 PM IST
While theatres are back to pre-COVID levels in terms of ticket prices and food and beverage business, cinema advertising and footfalls are seeing a slow recovery.

While theatres are back to pre-COVID levels in terms of ticket prices and food and beverage business, cinema advertising and footfalls are seeing a slow recovery.

 
 
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Cinema advertising platform UFO Moviez, which reported a negative profit after tax (PAT) of Rs 92 million and revenue of Rs 1,078 million in Q2 FY23, saw no increase in government ad spending, which has become an area of concern for the company.

Government advertising revenue has been similar to Q1 FY23 in the second quarter, the company's management said. Out of the total in-cinema advertising revenue of Rs 131 million in Q2 FY23, corporate and local advertisers had ad spending worth Rs 103 million while government and PSU (public service undertakings) spending was at Rs 28 million.

Pre-COVID in Q2 FY20, total cinema advertising was at Rs 360 million out of which corporate spends were at 227 million and government spends were at Rs 133 million.

"The government is not spending the way it used to do pre-COVID on digital cinema media. The central government pre-COVID used to contribute 75-80 percent in some cases. There was also a trend when the state government and PSU share was slowly increasing from 15 percent in 2016 to 25 percent at one stage. But lion's share was from the central government," Ashish Malushte, Chief Financial Officer said during the Q2 earnings call.