Unlock 5: Without Delhi and Mumbai, does it make sense for theatres to reopen from October 15?

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Theatres in India are allowed to reopen but will the move really bring cheer to the film industry?

The question arises because cinemas in both Mumbai and Delhi, the two major markets in the country, are not yet allowed to restart operations.

While theatres received a go-ahead from the central government on September 30 to restart operations from October 15, cinemas in both Mumbai and Delhi haven’t yet received permissions from their respective state governments to reopen.

Every state across India is taking decision to let cinemas open depending on the number of coronavirus cases in each state.

Mumbai and Delhi big markets for cinemas

For example, Delhi will need to get a go-ahead from Delhi Disaster Management Authority (DDMA) which is chaired by lieutenant-governor Anil Baijal to reopen theatres.

Also, the lockdown on cinemas will continue in Maharashtra till the end of October.

According to film trade analysts, Delhi and Mumbai are top cities among revenue earners for Bollywood films across the country.

If we go by the estimates of media analysts, Delhi circuit is almost 15 percent to 18 percent of Hindi box office collections.

In addition, a FICCI-KPMG report notes that Mumbai and Delhi/UP circuit together constitute approximately 60 percent of the total box office collections for most Hindi films.

And if we look at number of screens of top multiplex players, around 7.5 percent of PVR’s and 3 percent of INOX’s screens are in Delhi.

Big movies wait for big markets to reopen

This is why analysts are saying that no major Hindi film will arrive without theatres reopening in Maharashtra and Delhi especially in Mumbai as the territory, along with overseas, contributes a huge chunk to box office collections.

Among the big Hindi offerings, exhibitors are pinning their hopes on Akshay Kumar's Sooryavanshi and Ranveer Singh's 83. However, makers of the two films are not likely to release the films until theatres in Mumbai reopen.

More ticket sales in Mumbai and Delhi

When it comes to ticket sales, biggest growth is coming from Delhi, Mumbai and Bengaluru, point out experts.

If we compare ticket prices on online movie ticket booking sites then moviegoers in Delhi pay the highest prices as average ticket prices range from Rs 146 during weekdays to Rs 339 during weekends. On the other hand, cinephiles in Mumbai on an average pay Rs 109 during weekdays and Rs 211 during weekends.

Also, most multiplexes in India on an average earn 60 percent  of their revenue from ticket prices, 25 to 30 percent from F&B (food and beverage) and the rest from advertising.

When it comes to F&B segment, it is the key margin driver for theatres. However, in times of COVID-19 most exhibitors fear a drop in F&B sales.

In fact, an Ormax report in May pointed out that F&B consumption is likely to see over a 60 percent drop per footfall.

Even experts say that F&B business will see a huge hit as consumers may not be open to consuming food in cinemas.

This is why revenue coming from ticket sales has become more important than ever.

While it is expected that Delhi may allow theatres to reopen from October 15, cinemas in Maharashtra are not likely to reopen before November.

In an interview to a newspaper, PVR Cinemas' CEO, Kamal Gianchandani said that Maharashtra is the torchbearer of the film business as the state is a strong market not only for Bollywood and Hollywood films but also brings in strong office numbers for Marathi and south films.