The one thing that exhibitors will not have to worry about once they resume operations, is having a content-rich line-up.
According to Karan Taurani, Vice President, Elara Capital, there are ample movies that will be available for release over the next six months.
"Big-budget Hindi movies, like Coolie no.1, Sooryavanshi, 83 Biopic, are ready for release,” he said.
In a research note, he said that movies require a three-month span for dubbing of content. Hence, all pending films expected to be released in Q1 FY21 too will be ready for release in July. There is enough amount of content available until September this year to ensure that cinemas are full.
In terms of the regional movies, multiple films are ready for release from June-July onwards.
Taurani also believes that box office collections will continue to move positively after the lockdown is over, as people will be bored of watching OTT content at home, and will move out of their houses to watch big movies on bigger screens. So, footfall is expected to witness a sharp surge post the theatre reopening.
Despite the optimism around strong content, Taurani is of the view that the status of the outbreak after the lockdown period will decide the fate of the exhibitors.
“In case, the number of infected cases move up sharply despite the lockdown and it is extended further by two to three weeks, it will have a negative bearing for exhibitors. People will monitor the situation closely before hitting movie theatres even after the lockdown is called off,” Taurani told Moneycontrol.
He further highlighted that large multiplex chains like Inox, PVR and Cinepolis will see new screen addition and execution, tariff hikes, renegotiation with the property owners for rentals, renegotiation for distributors share to get postponed by six months.
Besides, after theatres reopen, it will take occupancy levels around two to three weeks to come back to what they were before the shutdown.
The spread of COVID-19 in developed nations will lead to a bigger delay of large Hollywood releases globally, which too will impact box office revenue for exhibitors.
“Hollywood contributes almost 12 percent of box office revenue for PVR and Inox, with PVR having a relatively larger share (15 percent to 18 percent),” Taurani added.
The exhibitors are seeking help from the government and have urged for a GST break for one year.
Taurani believes that temporary relaxation of GST and lower distributor share may reduce near term losses for the exhibitors.