Demonetisation last nail in coffin for single-screen theatres
3 min read 21 Dec 2016, 01:41 AM ISTProducers are limiting their release to multiplexes, and reducing prints to single-screen theatres, to keep losses at a minimumthus impacting the latter's ticket sales
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New Delhi: The producers of three of the most looked-forward-to releases that happened over the past 30 days—Kahaani 2, Befikre and Dear Zindagi—reduced the number of prints that they handed out to single-screen theatres, to keep losses at a minimum.
Their decision was driven by the government’s decision, on 8 November, to invalidate high-value currency notes, a move that has hit many cash-driven businesses. The producers limited their release to plush multiplex chains.
For the beginning of the end for single-screen theatres, however, one will have to go much further back in time. Demonetisation is simply the last nail in the coffin.
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“Audience attendance rates, or footfalls, have consistently fallen in the last 10 years. The only reason multiplexes report good sales is because their ticket prices are high," said Anil Gulatee, partner at Jabalpur’s Jyoti Cinema.
And with sales falling, many single-screen theatres have not been able to keep pace with technology.
In the 20 years that Gulatee’s theatre has been in the city, the number of single-screen theatres has dropped from 22 to one—his.
That’s the story across India.
And has been, for several years now.
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The situation has only worsened since November, with nearly 500-1,000 theatres having closed down since, according to Atul Mohan, editor of trade magazine Complete Cinema.
But what ails single-screen theatres apart from poor “footfalls", as Gulatee terms it?
There are enough ills.
For one, they have to renew the licence they receive for cinema exhibition from the state government in return for entertainment tax every year—this costs Rs2 lakh.
Then, to acquire a film from a producer, the theatre has to agree to a minimum guaranteed payment. If the film bombs (and many do), the theatre loses it all. If it does well, it has to pay more to the producer in accordance with the agreed-upon terms.
Finally, single-screen theatres lack the bargaining power of multiplexes.
“They can’t afford to meddle with the multiplexes," said Sanjay Ghai, chief operating officer of film production company Mukta Arts Ltd, who runs single-screen theatre Chandra Talkies in Muzaffarnagar. “Say a film nets Rs6 lakh in its opening week. From a multiplex, producers take 50%—about Rs3 lakh. From a single screen, on the other hand, they will take about Rs5 lakh."
For Befikre, Ghai had to pay producers Yash Raj Films a minimum guarantee of Rs1.5 lakh. The film ended up netting Rs86,000 in its first week.
Demonetisation hasn’t helped, he added, although “the single-screen crisis is not entirely related to it".
E-wallets and other digital payment options are available in small towns as well, he adds, but the crisis “has definitely reached its peak since" the scrapping of old high-value currency notes.
Single-screen theatres continue to be the backbone of the Indian movie box office, contributing about 35-40% to a film’s total earnings.
Complete Cinema editor Mohan claimed that even the limited releases in single screens in the wake of the cash crunch attracted more viewers than they did in the multiplexes.
“Filmmakers must realize the craziest movie fans come from small towns and cannot be ignored. They will not travel kilometres to watch a film in a multiplex," he added.
While some single-screen owners are banking on Aamir Khan-starrer Dangal, which releases this week, and Shah Rukh Khan and Hrithik Roshan’s January offerings, Raees and Kaabil, there are others who see no reason for hope.
Indeed, by March, many single-screen theatres—there are an estimated 8,500 in India—may choose not to renew their licences, says Mohan. Some may become marriage halls.
Gulatee will probably exit the business. There is no point, he said.
