Multiplexes are among the worst-hit sectors, bearing the brunt of closures and restrictions brought by the coronavirus outbreak. The impact can be assessed from the fact that most multiplexes still remain closed when most businesses are allowed reasonable relaxations.
The environment continues to be bleak for multiplexes. Players have resorted to cutting expenses. Employees have suffered due to layoffs and balance sheets have been bruised due to cash burn without income. However, multiplexes have managed to scrape through these difficult times.
All is not lost
Amid the gloom and doom, the industry is seeing a ray of hope in the trends emerging in the international market. Footfalls are gathering pace across multiplexes in global markets where they have resumed operations. It is an indication of a strong appetite for movies as people look to get their lives back on track. Domestic players are expecting a similar trend to play out, riding on a strong regional industry.
Eastern markets lifting the sentiment
A comparison with Japanese and South Korean markets would be more apt for Indian multiplexes. Both these countries have strong regional film industries like India. Emerging reports are suggesting that new releases are received well despite strict occupancy caps and time restrictions.
Japan's industry is extremely optimistic of a swift recovery once cinemas are fully functional. The optimism is based on the trends of quick recovery last year when theatres opened briefly. 'Demon Slayer–Kimetsu No Yaiba The Movie: Mugen Train' became the biggest film ever released during this period.
South Korean industry is less upbeat due to operational difficulties and lack of content. Multiplexes have resorted to giving discounts to vaccinated moviegoers to improve footfalls. Despite that, major releases like Demon Slayer–Kimetsu No Yaiba The Movie: Mugen Train has managed to pull in large crowds. Vin Diesel's F9 has also been received very well and became the third highest-grossing film this year in South Korea.
Buoyant western markets
Multiplexes in the UK have also reopened with strong box office performance. Sony's Peter Rabbit 2 has reported the highest weekend collections since 2020 when the pandemic surfaced first. French cinemas have also reopened with a bang, selling 3,05,000 tickets on Day 1, making it the best reopening performance in Europe.
In the US market, A Quiet Place and Fast and Furious have drawn in strong crowds. The industry is looking forward to movies like Jungle Cruise, The Green Knight, and Hitman’s Wife’s Bodyguard to bring in crowds.
Multiplexes in the US have also started to allow completely vaccinated visitors to remove masks within cinema halls, a sign of the return to normalcy. It should further encourage cinema-goers.
In the Indian market, sentiment among producers is far more bullish than it was in 2020. After the first lockdown, they preferred to wait and watch, unsure of public response. However, producers are not in a position to hold on to their releases and continue to suffer cash burn. They are looking to release their titles and recover the cost of production at the earliest.
As many as 15 big-budget movies are waiting for release. Producers will be further encouraged by huge pent-up demand in other markets where multiplexes have started functioning.
Akshay Kumar's Bell Bottom is set to be the first major Bollywood project coming out post-pandemic. It is expected to create a similar impact as Vijay's Master did for the Southern industry after the first phase of lockdown.
Master garnered almost full occupancy in multiplexes and managed close to Rs 250 crore in collections worldwide.
Apart from Bell Bottom, Alia Bhatt's Gangubai Kathiawadi, Ranveer Singh's '83, John Abraham's Attack and Telugu multi-starrer RRR are the other big movies set to hit the screen in 2021.
With vaccination drive picking up, multiplexes are expecting to reopen faster in Tier 1 and 2 cities over the next three months. Producers would also be looking at a good window for releases around Diwali while keeping a close eye on the coronavirus situation.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.