Home >Industry >Media >After global box office business decline, COVID-19 may hit film business in India too

NEW DELHI : Its impact on the Indian film business has been minimal as of now, but with the first confirmed case of Coronavirus in Delhi and one in Telangana, box office collections may well be affected, going forward. A new report by brokerage firm Elara Securities Pvt Ltd said the first quarter of FY21 may see the postponement of several big-ticket films that are currently scheduled for release in India, if things get worse.

This could result in an EBITDA (earnings before interest, tax, depreciation and amortization) downgrade of 12-14% for multiplex chains like PVR Cinemas and INOX Leisure Ltd, based only on lower footfalls and lower F&B (food and beverage) revenue if cinemas were to remain shut over an estimated period of eight weeks.

Beginning April, Bollywood which contributes 65% of the total revenue of these chains, has major offerings lined up, including director Kabir Khan’s sports drama ’83, Amitabh Bachchan and Ayushmann Khurrana-starrer Gulabo Sitabo, Varun Dhawan’s comedy Coolie No.1, Salman Khan’s action drama Radhe-Your Most Wanted Bhai, Akshay Kumar-starrer Laxmmi Bomb, Yash Raj Film’s Bunty Aur Babli 2 and Kangana Ranaut’s Thalaivi, a biopic on actor-politician Jayalalithaa.

“Some of the large releases may also get postponed going ahead, in case cinemas call for a closure in the coming months. We will monitor the number of new cases closely to ascertain the exact impact on footfall in cinemas," Karan Taurani, research analyst with Elara said.

To be sure, the deadly virus which has already claimed thousands of lives around the world, has impacted global movie business over the past few months. In China, the epicenter of the attack, about 70,000 movie theatres have been shut down and several tent-pole films postponed. The Chinese lunar new year on 12 February, grossed about $2 million at the movies over the weekend compared to $360 million last year, according to a report by Quartz. The Elara report said that box office collections in Italy, too were down 25%YoY in the month of February though the impact of cinemas shutting down in the country was only felt post the 15th. Overall, the month of March could see a box office decline of over 50%YoY in the country which has reported more than 1,600 confirmed cases. Almost 50% of the cinema screens in Italy have been shut for over a week. Meanwhile, Japan has postponed the release of large movies due to Coronavirus impact as most cinema chains have stopped advance bookings and called for a temporary closure for over two weeks.

In Korea too, the number of admits has fallen by almost 65% over the past weekend in comparison to the number of people about two weeks ago, the report says.

To be sure, Bollywood is already on its way to reporting one of the worst quarters in the history of film business. The months of January and February have together registered a decline of 11% YoY with the list of underperformers including titles like Chhapaak (Rs. 34.08 crore), Street Dancer (Rs. 68.28 crore), Panga (Rs. 28.92 crore) and Love Aaj Kal (Rs. 34.80 crore).

Film industry experts see the first few reported Coronavirus cases in India as early signs of a bleak quarter for films. While cinema chains actually shutting down operations would ultimately depend on the gravity of the situation, the idea that people would be fearful of stepping out of home and of large crowds is not too far-fetched.

“Of course the safety of movie viewers is of utmost importance and there are countries that have already brought in restrictions but the call in India would depend on government directives," said film trade and exhibition expert Girish Johar.

Rajendar Singh, vice-president, programming and distribution, INOX Leisure Ltd added that it was too early to comment and only time would tell how theatre owners would respond to the crisis, if there is one.

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