Multiplexes bet on strong content line-up for sharp recovery, see increase in occupancy

According to film trade experts, family audiences account for 35 percent of overall footfalls in cinemas.

After Bollywood offering Sooryavanshi’s strong run at the box office with over Rs 194 crore and the film nearing Rs 200 crore, multiplex operators are betting big on Hollywood venture Spider-Man: No way Home which has seen one of the strongest advance bookings ever.

Kamal Gianchandani, president, Multiplex Association of India (MAI) and CEO of PVR Pictures, said that the strong advances of Spider-Man: No Way Home are pointing to a sharp recovery in the cinema business. He said that Spider-Man… has changed the course of upcoming ventures such as Ranveer Singh’s 83.

“Film 83 is going to be a landmark film. It is releasing on December 24, a day before a big holiday. The release strategy is falling into place. What Spider-Man… is doing is that it is bringing large crowds back to theatres and whetting the audience’s appetite. They will get to see posters, trailers of 83 which will augur well for the release of 83,” Gianchandani added.

The MAI president also noted that Telugu language offering Pushpa, which is also releasing in Tamil, Malayalam, Kannada and Hindi on December 17, saw all tickets sold out in Andhra Pradesh, Telangana and Karnataka in advance bookings. He added that there are movie releases every week and blockbuster-potential films every month over the next year.

“There is The Matrix Resurrections on December 22, Jersey and The King’s Man on December 31, RRR on January 7, Akshay Kumar’s Prithviraj on January 21. Producers have started blocking dates in September, October of 2022. Avatar is (releasing) in December 2022,” he said.

While exhibitors are banking on upcoming content, theatres are seeing a recovery in business.

“All revenue engines, be it ATP (average ticket price), SPH (spend per head) and occupancies are seeing sharp recovery. Between October-November, at an industry level, occupancies are growing by 50-60 percent. If occupancy was 18 percent in October it has gone up to 27 percent in November due to more films. ATP and SPH are also growing by a big margin sequentially. People had expected de-growth in SPH because F&B (food and beverage) is not permitted inside auditoriums in some markets and that the audience would be wary of buying F&B. But that’s not the case. There has been a significant jump in SPH,” said Gianchandani.

According to analyst Karan Taurani, senior vice-president, Elara Capital, overall box office revenue for exhibitors is likely to see full recovery over the next six to nine months. And for multiplexes including PVR and INOX, F&B revenue is largely back to pre-COVID levels except in some states like Maharashtra, where food is not allowed inside theatres. F&B revenue will move back to pre-COVID levels in line with footfall recovery, he said.

However, cinema advertising revenue which contributes 11 percent and 10 percent of overall revenue of PVR and INOX, respectively, remains below par. “It will be important to track recovery trends in ads as this segment contributed 35 percent and 30 percent of EBITDA (earnings before interest, tax, depreciation and amortisation) for PVR and INOX, respectively, in FY20.”

Another aspect of the cinema business that was impacted due to the coronavirus outbreak was the theatrical window, which is the period between a film’s theatrical release and its launch on a streaming platform. The window, which was reduced to four weeks in COVID times, will go back to what it was in pre-COVID times by next year, said Gianchandani.

“As a short-term measure we have agreed to contract the window to four weeks. This window will stay till March. And from April 1 next year, this window will go back to what it was in pre-COVID times. Most cinema chains have got written contracts with large producers like Yash Raj Films on the window. Other content partners are also supportive. On April 1, we will revert to the erstwhile eight-week window,” he said.

When it comes to reopening of theatres, Gianchandani said that 97-98 percent multiplex screens have reopened and are operational.

“As for single screens, about 85 percent are back in operation. We are seeing a small number of permanent shutdown of around 2-2.5 percent as far as single screens are concerned. For multiplexes, (we are) not expecting any shutdown. The remaining screens will open in due course of time,” he said.