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  • Tips Films’ dependence on box office success is continuously reducing: Tips Films MD Kumar Taurani

    Tips Films’ dependence on box office success is continuously reducing: Tips Films MD Kumar Taurani

    Mumbai: “The film industry provides a very good opportunity to scale up operations very profitably and with very low risk,” quoted Tips Films managing director Kumar Taurani during the conference call conducted to announce the company’s quarterly results. He added that Tips’s plan is to scale up to releasing 12 films a year in the coming three to five years.

    “The dependence on box office success is continuously reducing, as the other three rights (music, video, & OTT) contribute a substantial part of the movie’s cost. Going forward, Tips Films very roughly expects its revenue distribution to be 30 per cent from digital rights, 30 per cent from domestic theatrical rights, 15 per cent from satellite rights, 15 per cent from music rights, and 10 per cent from overseas theatrical rights. We will have more clarity on these proportions over the next six to 12 months with more releases,” he stated further.

    He laid emphasis on the fact that the budgeting of a movie is a critical aspect in deciding its profitability. “Hence during this process, we seek the input of key company executives responsible for our major revenue streams, such as music, television broadcast, OTT distribution & marketing, and overseas release. The financial position analysis in these areas is based on all available information, including the screenplay, budget, schedule, director, producer, and principal cast. We currently have three films under production and are close to signing a deal for one of them. We will disclose more details once the deal is finalised.”

    He mentioned that the feature film format of 80 to 180 minutes of character-driven storytelling remains very relevant to today’s audience.

    Historically, movie business revenue was based on satellite rights, video rights, music rights, & domestic and overseas theatrical rights. This revenue distribution saw a disruption in the early 2000s. And music and video rights could not provide adequate monetisation for films for about 15 years, due to technological disruption. The disruption phase he described is now over. “Over the last three to four years, the film industry has seen a drastic change as a result of multiple OTT platforms and the revenue monetisation capability of music rights.”

    When asked about the duration of making a film, he said that pre-production takes two to three months. He said that, but production these days, depending on the film, can be done in 20 to 25 days; just say 100 days; or if there is a very big film, then maybe 150 days. Postproduction takes three to four months, depending on the number of visual effects in the film. If there is a lot of VFX in the film, it will take longer; eight to nine months is also possible; otherwise, two or three months is sufficient.

    When asked about the future of theatres given the OTT competition, he noted that everything will survive. OTT will survive; audiences are different. “Sometimes senior people want to go to the theatre; sometimes they want to watch on OTT. Youngsters are more into OTT. So, again, depending on the quality, which kind of film is thriller or horror, and if it’s a big actor, people will go to the theatre; if it’s a small actor, people will prefer to see it on OTT. So, there are many permutation combinations, but I feel theatre will 100 per cent survive till we make films.”

    Speaking on the balance of focus on theatrical releases versus OTT, he said that if the company likes the stories, then it just acquires them. We sign artists, and then at that time, we understand that this will be an OTT film or a theatrical film. As a result, the fact that we release so many theatrical and non-theatrical OTT films is not a guarantee. So, for the next one or two years, we plan to release at least five films per year, with the goal of increasing to 12 films per year in three, four, or five years. “We should release at least one movie every month, whether it’s OTT, theatrical, regional, or Hindi, so that’s our target for the next three to five years,” he concluded.

  • Seven in ten urban Indians claim their frequency of going to the cinema has decreased: YouGuv

    Seven in ten urban Indians claim their frequency of going to the cinema has decreased: YouGuv

    Mumbai: New YouGov data reveals where people are watching new films and how the shift to streaming platforms may affect cinema attendance in a post-covid world.

    When asked about the change in their cinema viewing habits since the pandemic, nearly seven in ten urban Indians (69 per cent) agreed with the statement, “My frequency of going to the cinema/theatre has decreased.”

    According to data, 44 per cent of people stop visiting the cinema hall because of  streaming films online, followed by 42 per cent of people’s preference to watch films at home. Nearly a third think going to a cinema is expensive or feel there aren’t any films worth going to the cinema are 32 per cent each. North Indians were more likely to say they do not go to cinemas because of the flexibility of streaming films online. Similarly, the 40+ group prefers to watch films at home.

    When asked about the medium they have used most often to watch newly released films in the past six months, OTT platforms emerged as the most popular choice for nearly half of urban Indians. A fifth (22 per cent) said they watched new movies on TV and only 16 per cent went to the cinema or theatre to watch films during this period.

    Looking at the data by age, 57 per cent between age group of 18-29 years were most likely to watch new films on OTT/streaming platforms in the past six months, while 40+ adults than others were more likely to watch them on TV (26 per cent) or in theatres (19 per cent). Notably, residents in South India were more likely to say they watched newly released films in theatres as compared to residents of other regions (22 per cent).

    Even though OTT has gained precedence, not all hope is lost for theatres. YouGov data shows a quarter of urban Indians (26 per cent) said their frequency of visiting theatres has increased since the pandemic, with young adults between 18 and 29 years old echoing this sentiment most strongly.

    An overview of people’s cinema viewing habits shows one in six urban Indians (15 per cent) said they go to a theatre to watch a film at least once a week, while eight per cent do so once a fortnight. Just under a quarter visit a theatre at least once a month (23 per cent), and nearly half visit it once every two-three months or longer than that. This behaviour is similar across all age groups.

    Past behaviour shows cinema outings in the last 12 months have mostly been with friends or family. At 61 per cent, Bollywood films emerged as the most popular kind of cinema among people, followed by Hollywood or regional South Indian films at 45 per cent each.

    When it comes to film genres, urban Indians prefer comedy (67 per cent), followed by action (54 per cent), and thrillers (51 per cent). Specifically, thinking about how they like to watch these genres, a majority (55 per cent) said they enjoy watching comedy films on OTT or streaming platforms. 19 per cent prefer watching them in a theatre, and 26 per cent prefer both the options. The higher preference for OTT platforms is uniform across genres, except for action films, where people were more likely to say they liked watching these films in theatres than on OTT platforms.

    Commenting on the research, YouGov India GM Deepa Bhatia said, “After two years of the pandemic, theatres in India finally opened to full capacity this year. However, the rising popularity of streaming platforms remains a challenge, discouraging people to step out of their homes.”

    “While cost and home viewing habits keep many people away from the movies, it should be remembered that people go to the cinema to enjoy the experience. It is important for brands to understand the changing cinema habits and behaviours of urban Indians to re-imagine their marketing strategies and prepare themselves for this ever evolving relationship between films and consumers,” added Bhatia.

    Data was collected online among 1,004 urban Indian respondents in September 2022 by YouGov’s Omnibus using its panel of over 20 million people worldwide.

  • PVR records Q4 net loss of Rs 289.12 cr amid Covid blues

    PVR records Q4 net loss of Rs 289.12 cr amid Covid blues

    New Delhi : Multiplex major PVR Ltd continues to bear the brunt of the ongoing pandemic, as it recorded a consolidated net loss of Rs 289.12 crore in the quarter ended on March 31.

    The company reported a net loss of Rs 74.49 crore in the same quarter of the last fiscal. Total income during the period under review was Rs 263.26 crore against Rs 661.78 crore in the corresponding quarter a year ago, it said in a regulatory filing, on Wednesday.

    According to PVR, the results for the quarter and year ended March 31, 2021, are not comparable with results for the quarter and year ended March 31, 2020, as the operations were impacted due to the lockdowns restrictions, staggered re-openings, limited content flow and low consumer confidence.

    FY 2020-21 was one of the toughest years for the multiplex industry and the company was able to successfully navigate the challenges on account of Covid-19 through a continuous focus on reducing fixed costs and keeping adequate liquidity on the balance sheet, said the multiplex major on Wednesday.

    While there were no major Bollywood or Hollywood movie releases in Q4 FY’21, the Southern film industry witnessed strong recovery. But, that too, was marred by the resurgence of the second wave in April, compelling the company to take necessary measures to manage its costs and preserve liquidity.

    However, PVR chairman-cum-managing director Ajay Bijli expressed confidence that the company will bounce back stronger than ever once things start to normalise after mass vaccination.

    As on date, none of its cinemas are operational due to lockdowns implemented by state governments, and even after cinemas are re-opened, its business will continue to be impacted, said PVR.

    “We may not be able to run our cinemas at normal capacity on account of social distancing measures that cinemas may be required to follow as well as health concerns that the patrons may have. On account of this, our revenue and cash flow generation may be impacted even when we fully resume operations,” the company said.

    The multiplex operator said it continues to incur committed cash outflows, including employee salary pay-outs, other overheads as well as payments. It has been able to achieve a reduction of 63 per cent in the fixed cost during the period of lockdown in FY21, which covered rent, personnel costs, electricity and water charges and other overheads.

  • Covid second wave pushes multiplexes’ recovery to next fiscal: CRISIL

    Covid second wave pushes multiplexes’ recovery to next fiscal: CRISIL

    New Delhi: Multiplexes across the country are set to log operating losses for the second straight fiscal as localised lockdowns, night curfews and other restrictions to contain the resurgence of Covid2019 infections will keep occupancies low for the next few months, according to CRISIL ratings.

    The film exhibition sector was one of the worst impacted by the lockdown in 2020, being the first to lower their shutters in March, and among the last to resume operations, in October.

    Occupancy had started improving post-resumption, and was expected to reach 18-22 per cent – the breakeven level in terms of operating profit – in the current quarter. Sequentially, occupancy doubled to 12-13 per cent last quarter, and was seen climbing anew to 22-25 per cent in south India.

    However, the sudden spike in Covid2019 cases in April will send that estimate askew and defer recovery to the second half of this fiscal, said CRISIL in its latest report.

    “Our base case assumes average occupancy of 10-12 per cent in the first half of this fiscal and 20-22 per cent in the second half, when restrictions on occupancy and fears of infection will hopefully recede. A full recovery is seen only in fiscal 2023,” said CRISIL Ratings director Nitesh Jain. 

    Temporary closures in many states, especially Maharashtra, will push back new film releases, at least the big-ticket ones, to the second quarter, noted Jain. 

    “Maharashtra is a crucial market for cinema, accounting for a fifth of the total screens in India. The resurgence of pandemic has created many uncertainties, and restrictions could continue for longer, leading to deferment of film releases on big screens and continuation of cash burn for multiplexes,” he elaborated.

    In the milieu, CRISIL-rated multiplex operators, which account for almost half of the industry’s revenue, are expected to log cash losses this fiscal, too. They had bled roughly Rs 900 crore in fiscal 2021, compared with a cash profit of around Rs 785 crore in fiscal 2020.

    Last fiscal, multiplex operators undertook steep cost controls, including deferring maintenance and major capex outlays. They also raised Rs 1,350 crore equity to fund losses and augment liquidity. The current liquidity could comfortably cover operating expenses and debt servicing of these players for the next four to six months.

    But with the sudden turnaround in the state of affairs, cost cutting measures, including deferring maintenance and major capex outlays, are likely to continue even this fiscal. Their ability to keep a leash on fixed cost will, however, be a monitorable, opined CRISIL Ratings associate director Rakshit Kachhal. 

    “Lease rentals is the largest fixed cost and they could save 70-75 per cent (~Rs 800 crore) from waiver of rentals in the last fiscal. Their ability to renegotiate rentals for the current fiscal will be crucial to contain the losses. Besides cost controls, the ability to raise funds in a timely manner will bear watching,” he added.

    The spread of infections, the success of the vaccination drive, and the return of moviegoers will be monitorables, too, as will be the players’ ability to raise funds in a timely manner. But this is only when one sets aside people’s fear of closed spaces.

    According to CRISIL, since multiplexes are among the few out-of-home entertainment options in India, occupancy should bounce back once the fear of infection recedes and the pace of vaccination picks up.

    Besides, big-budget movies, which are temporarily being deferred, are unlikely to be released on over-the-top (OTT) platforms, given that multiplexes contribute more than 50 per cent of the total box office collection. Thus, exhibition of big-budget movies leading to recovery in occupancy should script the recovery for multiplexes, currently seen in second-half of this fiscal.

  • Miraj Cinemas adds four multiplexes in 15 days, inches closer to ‘100’ plan

    NEW DELHI: Miraj Cinemas has strengthened its position in Punjab, Gujarat and Delhi NCR by adding four multiplexes with 13 screens in a record time of just 15 days. With this addition, Miraj Cinemas has now secured 77 screens across India.

    In Gujarat, Miraj Cinemas has two new multiplexes in Vadodra and three screens in Gandhidham and another four-screen property in Miraj Cine Pride Ahmedabad besides its existing seven-screen property at Miraj City Pulse.

    The new multiplex of Miraj cinemas in Vadodra situated at SWC mall has 3D equipped four screens that boast of 728 plush seating capacities with 7.1 Dolby surround sound facility, 2k Projectors and recliner seats while its Ahmedabad property situated at Vitthal Plaza (New Naroda) and has three screens with a seating capacity of 372 along with silver screen and recliner seating facilities comprises with modern state-of-the art infrastructure.

    In Delhi-NCR Miraj Cinemas today came out with its new 3-screen multiplex at Laxmi Plaza in Rajendra Nagar, Ghaziabad, where it has 3D equipped screens with seating capacity of 711 people with 7.1 Dolby digital sound systems. This new property in has come out in addition to the existing 2-screen multiplex in Chowdhry Mall, Ghaziabad and at 2-screen multiplex at Subhash Nagar in New Delhi.

    In Punjab, Miraj Cinemas launched 3-screen multiplex situated at J’s EmiNent Mall complex in Hoshiyarpur. The new property has 2K technology projector and a silver screen for 3D movies. The multiplex is also equipped 7.1 dolby digital sound system with boasts plush seating capacities along with recliner seats.

    Miraj MD Amit Sharma said, “We believe this is a milestone for us where Miraj Cinemas promised to provide quality movie watching experience to its patrons and wants to be geographically present throughout the country.”

    The company has chalked out an aggressive plan to operate over 100 screens pan India focusing on major cities by end of this year with increasing presence in cities of Delhi NCR, Ahmedabad, Hyderabad & in the state of Maharashtra where it would have atleast 50 screens and the rest will be in the non-metros, Mr. Sharma said adding that the company By 2020, we want to reach 200 screens and we will be adding on average 30-35 screens every year.

    According to Bhuvanesh Mendiratta, Miraj Vice President -Operations, “Over past three years we have invested nearly Rs one to 1.5 billion and will go all out to enhance our presence massively in coming days.”

    With these additions, Miraj Cinemas is now have operations in 11 states with a presence in 21 cities and want to spread its wings to more Indian cities over next 2-3 years.

    Also Read:

    Cinepolis expands to G. Noida; to invest Rs 800 crore

    Cinépolis launches second Multiplex in Pune with IMAX Theatre

    Panvel Mumbai to get its first PVR multiplex 

    Cinekorn Entertainment associates with Viacom India for film Ring 

  • After Mumbai, Fame rebranding to Inox commences in Bengaluru

    After Mumbai, Fame rebranding to Inox commences in Bengaluru

    BENGALURU: After commencing rebranding of Fame screens in Mumbai to Inox, it is the garden city’s turn now. Of the 73 multiplexes and 284 screens across 40 cities that Inox boasts of, 25 multiplexes with 94 screens belonged to Fame India.

    Inox has launched an extensive marketing campaign across print, outdoor, radio and digital activations across cities which have multiplexes under the Fame brand name. The campaign is being handled by Lintas.

    Speaking on the brand change at one of the Inox theatre’s in Garuda Mall in Bengaluru, Inox Leisure Limited (Inox) CEO Alok Tandon said, “In a country where movies are a way of life, we are grossly under-screened. Inox has been on a steady expansion mode through organic as well as inorganic growth on its journey to its current leadership position. Our goal is to maintain our leadership position by continuing our sustained momentum of growth. As we announce the brand change from Fame to Inox, we will continue to provide the best movie going offering to our guests and emphasise on our tagline ‘Live the movie’ experience as the complete Inox experience.”

    “All Fame mutliplexes are now 100 per cent 2K digital and 3D enabled,” he added.
    “We expect to complete the Fame rebranding to Inox across all the screens acquired by us over the next one to one and a half months. To begin with the brand change will be experienced by guests in Mumbai and Bengaluru followed by Kolkata and the remaining cities in a phased manner,” revealed Tandon to indiantelevsion.com.

    Tandon expounded that despite producing about 1,000 movies a year, India had only 10 screens per 10 lakh people as compared to European countries which have 35 screens per 10 lakh people and the US which has 125 screens per 10 lakh people.

    As mentioned earlier, besides plans to expand into cities like Greater Noida, Gurgaon, Jalgaon, Madurai, Jamnagar and Manipal as also increase the existing number of multiplexes in places like Lucknow, Raipur and Surat., Tandon explained that Inox is open to acquisition route for expanding its screens.

     

     

  • Ek Tha Tiger ticket rates to cost 12 to 16 per cent more

    Ek Tha Tiger ticket rates to cost 12 to 16 per cent more

    MUMBAI: Salman Khan films are selling like hot cakes. Multiplexes have, therefore, decided to take advantage of Salman‘s popularity and hike the ticket prices of the star‘s upcoming film Ek Tha Tiger by as much as 12-16 per cent.

    Said Cinemax DGM, Girish Wankhede, “The price of Ek Tha Tiger will cost more by about Rs 20 per ticket. After all it (the film) is a premium product. This kind of thing is done during festive seasons. And as of now, a Salman Khan film commands higher premium than before.”

    But the same will not be the case in case of single-screens. Says Premiere Theatre manager Kamat, “No, we aren‘t going to raise our ticket rates. We are yet to decide whether we would have an extra show at 9 in the morning. We shall decide once we come to know about the demand for the film once the advance booking starts.”

    Earlier, tickets of Salman Khan releases like Ready and Bodyguard had been priced higher than regular rates.

  • Multiplexes turn face away from Yeh Jo Mohabbat Hai

    Multiplexes turn face away from Yeh Jo Mohabbat Hai

    Mumbai: The producers of Yeh Jo Mohabbat Hai have been left in the lurch with the movie failing to get enough screens for exhibition. It could only manage a few multiplexes but only for a few shows, it is unlike what producer Ashim Samanta had envisaged about.

    Grouses Samanta, “It seems the multiplex cartel has decided not to release non-star cast films (the film stars Aditya Samanta and Nazia Hussain) because they say that they don‘t get the numbers.”

    He adds, “However, they are kind enough to give us two shows; one in the morning 9 am show and the other at 12.15 am. At least we are better off; Prateek Chakraborty‘s From Sydney With Love could not get even one screen. Hence, they have postponed the film‘s release to 24 August. However, I fail to understand the logic as to why Krishna Aur Kans has as many as 300 multiplex screens at its disposal.”

    Samanta relates that the condition remains similar outside Mumbai too. “We haven‘t got a single screen in Hyderabad, Nagpur, Chandigarh and Jallandhar. In Baroda, we have been allotted one show. However, my film has got as many as 50 to 60 screens in Assam.”

    When inquired about the matter with Shyam Shroff of Shringar Films, the distributor of the film, he said, “They should thank their stars that they got some shows; see what happened to the Prateek Chakraborty film? With films like Bol Bachchan, Cocktail and The Dark Knight Rises doing pretty well, exhibitors are just not interested to take up non-star cast films for release.”

    Averred Cinemax DGM Girish Wankhede, “We don‘t get the required numbers for a non-star film and with several a-listed films doing quite well, we have allotted them only two shows that we could afford.”

  • Bollywood under stress as producers, plexes fight over revenue share

    The corporatisation of Bollywood helped clean ‘underworld‘ connections to a certain extent but it also created two new power centers – the producers and the multiplex owners.

    While both the moviegoer and the industry welcomed the advent of the multiplex, the euphoria didn‘t last for long. With the amount of business the multiplexes were doing, big-time producers wanted a raise in the revenue-share. The revenue-sharing topic has always been a matter of attention every time a Yash Raj banner film or one from a reputed banner came up for release.

    Till then multiplexes were passing on only 48 per cent to distributors when it should have been more, given the tax break. The Chopras, with some alleged arm-twisting, managed to get 2 per cent more even pre-Fanaa but this still left multiplex owners with a much higher profit margin than single-screen theatres.

    Recent revenue-sharing story

    The recent tiff between the producers and multiplexes started as early as February. While the producers were insisting on a 50 per cent revenue share for the first three weeks, the multiplexes were offering 50, 40 and 30 per cent revenue share for the same.

    After several failed discussions, the producers decided to go on strike and from 4 April they stopped giving release rights of new big-budget movies to multiplexes.

    After a month-long silence, both parties met on 5 May but nothing fruitful came out of the meeting.

    Not seeing any chance of the ice thawing, producers decided to release films in single-screens and independent multiplexes from 29 May. One of the films that were to be released was Vashu Bhagnani‘s Kal Kissne Dekha, the debut film of his son Jaccky.

    Later at a meeting held on 18 May, there was an underlying feeling that things would be sorted out at the meeting with the presence of multiplex owners like PVR‘s Ajay Bijli and Cinemax‘s Rashesh Kanakia along with Adlabs‘ Anil Arjun who have, prior to this, never attended any meeting besides Fame India‘s Shravan Shroff, Inox Leisure‘s Deepak Ashar and Fun Cinemas‘ Atul Goel. Representing the United Producers and Distributors Forum (UPDF) were Mukesh Bhatt, UTV‘s Ronnie Screwvala, Yash Raj Films‘ Sahdev Ghei, Eros International‘s Nandu Ahuja and Studio 18‘s Aman Gill.

    While the 50:50 revenue sharing terms for the first week were agreed upon, the bone of contention was the second and third week. The UPDF wanted terms which were a notch higher than the 42.5 and 32.5 per cent respectively. This meeting too didn‘t yield any result.

    On 23 May, the core committee of the UPDF met at the Yash Raj Studios where Yash Chopra, Vidhu Vinod Chopra, Aditya Chopra, Aamir Khan and Shah Rukh Khan met the rest of their fraternity to reach a consensus on the situation. The outcome was that they should not succumb to the multiplexes‘ demands, if any. The situation looks grim and to say the least has resulted in a deadlock. It was this day when Bhagnani backed out from releasing his film in single-screens fearing loss.

    On May 26 both parties met again. Just when they were getting closer to agreeing on the revenue-sharing terms, the issue of distribution strategy reared its head.

    Multiplexes want the content for all their properties, thus increasing the burden of print cost on the producers and in turn hampering the success of smaller films. Producers are now on course to chalk out their own distribution strategy for films which is the norm worldwide.

    “Giving the multiplexes the right to distribute films will kill the distribution business. If multiplexes think they can do distribution, then they should pay minimum guarantees. Moreover a big budget movie and a small budget movie cannot have the same distribution strategy,” says producer Harry Baweja of the Producers and Distributors Forum.

    Overview

    The disagreement between the two parties is being skeptically looked upon by industry professionals in the chain.

    Says 24 Karat Multiplex CEO Padam Sacheti, ” The strike period is a bane for us. It is loss all the way. I suggest both parties should keep their egos aside and work towards resolving the issue.”

    Though producers do not face any immediate financial losses, the release dates for several big budget projects have been disrupted. These include UTV‘s Main aur Mrs Khanna and Kaminey, Kal Kissne Dekha, Boney Kapoor‘s Wanted, Eros International‘s Aladin and Sajid Nadiadwala‘s Kambakkth Ishq. Almost Rs 2.5 billion has been blocked due to the delay in the release of these films.

    Says UTV Motion Pictures CEO Siddharth Roy Kapur, “Well I think films will release at some point or the other, hence for the producers there isn‘t really any loss technically. Delay doesn‘t hamper big films. It is only that the money gets blocked. The real time to worry would be when a lot of films will have to be released in rapid succession once the strike is lifted. Till that time there isn‘t any loss that the producers are incurring, I think the loss is primarily with the multiplexes, because every week that they lose, is a week lost in revenue.”

    The losses are indeed hurting multiplexes hard. “I would assume the loss to be to the tune of Rs 150,000 to Rs 200,000 a day per cinema,” says Fun Cinemas COO Vishal Kapur. “Talking about the occupancies, if earlier we would do 35 to 40 per cent of the available capacity, we are currently doing about 15 per cent,” he adds.

    The upcoming T20 world cup is also likely to hamper new releases and even if the strike is called off, big films will release July onwards.

    “It has been our stand for some time now. If there is no resolution soon, UTV will start releasing its big and small films in single theatres and non-national multiplexes from July onwards. We are working on the dates of releases of these films and they would be announced shortly,” says Siddharth Roy Kapur.

    Multiplex owners are mum on their losses due to the content blackout. But according to Indiantelevision.com estimates, the losses are close to Rs 2 billion. It is difficult to put a figure to the losses incurred by film producers due to the deference of their releases, some of whom have borrowed at exorbitant rates. The industry has also to figure out a smooth release window after the row between the producers and plex owners end.

    “A fatigue element seems to be building up. Both the parties are under financial stress and an amicable settlement would ease some of this pain. But there are structural issues that have to be sorted out on a long-term basis so that the revenue pie grows for all the stakeholders,” says an analyst who has been tracking the sector.

     

  • Multiplexes take Rs 450 million hit

    Multiplexes have taken a Rs 450 million knock since the producers began to stop supply of their fresh slate of movies from 4 April.

    The pinch is particularly felt hard by the top six plex operators who account for three-fourth of the 850 screens across the country, according to information gathered by Indiantelevision.com.

    In this research article, Indiantelevision.com estimates the revenue loss to climb to Rs 850-900 million if the strike continues for a month.

    Analysis

    Let us examine the impact in revenue caused due to different occupancy rates due to the movie release embargo. The big six namely Big Cinemas, PVR, Inox, Cinemax, Fame Cinemas and Fun Cinemas themselves constitute about three- fourth of the total number of screens. While there are more than 11,000 single-screen cinemas across the country, the multiplexes contribute to well over 50 per cent of the revenue generated.

    The occupancy rates are expected to be significantly different in the multiplexes with major Hindi films not being released. According to Fun Cinemas COO Vishal Kapur, screens are currently operating at around 15 per cent occupancy.

    The table below shows the number of seats, revenue per-show and revenue per-day generated by all multiplex screens in the country at the given occupancy rates. The occupancy rates have been considered between 10 and 60 per cent across all screens in the country.

    Note that in the above table, the average number of seats per screen in a multiplex is taken to be 230 and the total number of screens has been taken at 850. The average price of a movie ticket has been considered to be a conservative Rs 125. Additional losses would include loss in sales in food and beverages at the counters which is estimated to be around Rs 35 per-seat. The total loss, thus, incurred per-seat per-show would amount to Rs 160.

    A 10 per cent occupancy rate causes a difference of around Rs 15 million per day across all the 850 screens in the country. During normal times, screens may operate between 15 to 50 per cent occupancy depending on the movies showing at the time, says marketing head of Inox Harshavardhan Gangurde.

    Thus if we take a figure of 35 per cent to represent the occupancy rates of multiplex screens at any time of the year, in the current scenario there could well be a difference of 20 per cent in average occupancy rates.

    As is evident from the table, the multiplexes earn Rs 30 million less per day from ticket sales and food counters. Per week, this amounts to a loss of Rs 210 million in revenue, taking all multiplex screens into account. This figure does not include additional sources of revenue from vehicle parking and other such ancillary sources. However, the IPL may well have tempered the losses as it has the potential to lower the occupancy rates in the multiplexes.

    The big six hit the most

    The top six multiplexes took the biggest hit in revenue losses, as is evident from the table below.

    IPL impact on movies

    Many believe that the IPL is one of the main reasons for bringing a halt to the release of Hindi movies. The IPL took the country by storm in 2008 and is believed to have eaten away significantly into box-office collections. Industry observers believe that this is the right time to hold movies from releasing in multiplexes as it would in any case lead to significant losses. Movies released during the IPL in 2008 (from 18 April to 1 June) include Sirf, Tashan, Anamika, Mr. White Mr. Black, Pranali, Jimmy, Bhootnath, Jannat, Don Muthuswami, Dhoom Dhadaka and Ghatothkach. Clearly, most movies released were not big-budget movies. The only significant movies released during this time were Tashan, Jannat and Bhootnath. Jannat was the only movie which did reasonably well while the others had nothing much to write about.

    This year, during the IPL season, producers have decided not to jump into the fray at all. The IPL has provided the perfect time and opportunity to broker a deal with multiplex owners.

     

    Conclusion

    There could be a 20 per cent loss in occupancy rates if the United Producers and Distributors Forum stays put in not releasing new movies till a settlement is reached. From our calculations, this difference in occupancy rates would amount to revenue losses of Rs 850-900 million per month in multiplexes. This figure is much lesser than Rs 1-1.5 billion per month as is being claimed by some industry sources.

    The IPL has provided the perfect time for producers and distributors to settle the issue with multiplex owners. This issue had been simmering for a while ever since the release of Fanaa by Yash Raj movies way back in 2006. A sensible resolution of this issue hopefully would be reached during this time which would serve the best interests of either party for a good period of time.