OTT, COVID-19 to blame for Bollywood’s bleak box office performance, say experts

After 83, Ranveer Singh will be back on the bog screen with Yash Raj Films' Jayeshbhai Jordaar which will hit theatres on August 27. Image: Twitter

Hindi films, the highest contributor to Indian box office revenue in the pre-COVID period, are now struggling to sell big-screen tickets. From big-budget ventures to star-led films, Bollywood’s performance has been bleak so far in 2022.

On the face of it, the share of Hindi films at the box office this year shows only a marginal dip. However, the lion’s share of the contribution is actually from Hindi-dubbed South Indian films.

“The share of Hindi language between January to April this year is 38 percent, which is similar to the 39 percent share in 2019. However, 60 percent of this share has been contributed by the Hindi versions of RRR and KGF Chapter 2. Had these two films not been considered in the Hindi box office, the share would have been much lower,” Gautam Jain, Partner at media consulting firm Ormax Media, told Moneycontrol.

Apart from the Alia Bhatt-starrer Gangubai Kathiawadi, which earned over Rs 100 crore, and the sleeper hit The Kashmir Files, which crossed Rs 200 crore in revenue, Bollywood has not fared well at the box office.

Ranveer Singh’s Jayeshbhai Jordaar, a new release, has underperformed. Trade analysts expected an opening day collection of Rs 6-7 crore. However, the Bollywood venture earned Rs 3 crore on day one.

Jersey, featuring Shahid Kapoor, raked in Rs 19 crore over three weeks, Ajay Devgn’s Runway 34 collected around Rs 29 crore in two weeks and Heropanti 2, starring Tiger Shroff, managed around Rs 24 crore in two weeks.

The tepid performance of these films has been linked to competition from Hollywood and offerings from down South.

Over-the-top competition

Film producer and trade business analyst Girish Johar said Bollywood’s box office business has been hit by streaming platforms. “The pandemic led to the growth of over-the-top (OTT) platforms, which offered a lot of quality content. This led to audiences being more selective. The pandemic is subsiding but OTTs are still giving quality content,” he said.

The pandemic had led to the rise of direct-to-digital releases. Over the last two years, many film studios and directors have directly released their films on OTT platforms due to the COVID-induced closure of theatres for many months. In the first half of 2021, around 26 Hindi films that were originally conceived for theatrical release were streamed directly on OTT platforms.

OTT viewing has impacted Bollywood content the most at the box office, Johar said.

“Post the pandemic, the metro multiplex audience is now clearly segregating films into two buckets: to be watched on the big screen and to be watched on any other screen. Since most Hindi films released till date apart from a Sooryavanshi or Gangubai Kathiawadi fall under the second bucket, Hindi films have not set the box office on fire,” said Ormax Media’s Jain.

He added that Hindi cinema has avoided making films that would appeal to a wide spectrum of audiences. “The focus over the last five years has been to cater to the top 10-20 metros and multiplexes, completely ignoring the larger audience and their expectations.”

Increase in ticket prices

But it is not just the OTT impact and coronavirus outbreak that led to huge losses for theatres. The steep hike in ticket prices also played a role.

“Multiplexes were unable to do business in the last two years due to COVID-19. So, to make up for the losses, they have moved to higher ticket pricing. There has been an increase of around 40 percent in ticket prices,” pointed out Johar. And that has affected the business of Bollywood films.

PVR’s average ticket price (ATP) increased to Rs 235 in FY22 from Rs 180 in FY21, while INOX’s ATP grew from Rs 170 to Rs 217.

Regional rules

Even the strong performance of regional content spells bad news for Bollywood. “The share of Telugu and Kannada language films has increased from 12 percent and 5 percent, respectively, during the January-April period in 2019 to 27 percent and 9 percent in 2022, aided by the performance of RRR and KGF Chapter 2,” noted Jain.

He added that KGF Chapter 2 which did business to the tune of Rs 1,008 crore, and RRR, which has collected Rs 882 crore, are the top two grossing films of the year till date. “KGF Chapter 2 has become the second-highest grosser in the Hindi language, surpassing Dangal and just behind Baahubali: The Conclusion, which also happens to be a dubbed film,” Jain added.

Nitin Menon of NV Capital noted that every regional movie is aware that there is a Rs 1,000-crore box office market up for grabs and every movie coming from the southern stable wants to capture this number.

“Hindi movies will have to think about how to expand their market, especially in South India, which has close to half the exhibition screens in India. That’s the reason even the highest Hindi grosser, Dangal, had insignificant collections in southern markets.”

Johar said that even Hindi films such as Heropanti 2, which caters to a large audience, have not fared well at the box office. “Heropanti 2, which was released 2-3 days before Eid, when such films see high traction, was discontinued a day after Eid. This has never happened. Even Jersey, which got good word-of-mouth, did not fare well at the box office,” noted Johar.

Counting on new releases

Yet, Jain and Johar believe that this is a phase signalling a shift in content consumption. “While the present situation looks bleak, there are multiple Hindi films in the pipeline that have the potential to get audiences back to cinemas and increase footfalls. Brahmastra, Laal Singh Chadha, Cirkus, Tiger 3 and Pathan are a few films that can appeal to a wider audience,” said Jain.

Karan Taurani, Senior VP, Elara Capital, who has pared his Hindi box office projections for Q1 FY23 from 60 percent growth over the pre-COVID level to 46 percent, believes that a lot depends on upcoming ventures. “Hindi box office growth in Q1 FY23 will depend a lot upon the performance of the remaining large-budget films this quarter, including Bhool Bhoolaiya starring Kartik Aaryan, and Akshay Kumar’s Prithviraj,” he said.