Industry
Five charts tell the floundering story of multiplexes
Summary
Bollywood’s failure to attract viewers back to cinema is hurting multiplexes, as they compete with OTT platforms for attentionBollywood has a problem. It is struggling to get viewers back to cinemas even after the pandemic has subsided. In a recent YouGov survey, 69% of the respondents said their visits to film theatres had reduced, for reasons ranging from being too expensive to the availability of the online option. Data on footfalls confirms this trend.
Even as theatres got back to full capacity, the top 25 Hindi films this year have collectively got only 122 million footfalls, shows data compiled by BollywoodHungama.com. Though a remarkable recovery from 2020 and 2021, that’s not even half of the 2019 figure.
There are two accompanying trends. One, audiences are now happy to offer South Indian movies their time and money. Hindi films earlier used to attract one-third of all movie-goers, but their share dropped to just 10% in 2021, data from Ormax Media shows. Of the estimated 427 million movie-goers in 2021, 60% watched a Telugu or Tamil movie.
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A list of top 100 Hindi movies by footfalls shows the same. Baahubali 2 became the second most watched movie in cinemas of all time. K.G.F. Chapter 2 (rank 21) attracted 27 million viewers. In comparison, Brahmastra – Part One: Shiva could bring just 15 million, ranking 89th.
The second trend is of Bollywood’s usual shepherds missing in action. Khan movies being released on Diwali and Eid have become rare of late, breaking an annual ritual. Together, the three Khans—Salman, Aamir and Shah Rukh—star in 46 of top 100 movies. Their influence used to be high. Salman Khan’s Race 3 (2018) could bring an audience of 16 million, despite being rated 1.9 on IMDb. Aamir Khan’s return with Laal Singh Chaddha (2022) attracted just 1.4 million viewers.
Prices in a fix
On 23 September, theatres offered flat ₹75 tickets to get audiences back, calling it “National Cinema Day". The campaign drew 6.5 million footfalls in one day, according to the Multiplex Association of India. That says a lot about the role of pricing now when audiences can watch films at home too. That also shows multiplexes are yet to settle on a post-pandemic price strategy.
Prices last year were down at 2016 levels, but in 2022, they rose 30% to record levels, show annual reports of leading multiplex chains PVR and INOX. (The two together own close to half of all screens in India and are set for a merger.) This is partly due to inflation, partly due to the pandemic-led losses. After the success of National Cinema Day, several theatres have priced tickets at ₹100 again, and the average price may come down soon. To what extent it can help is anyone’s guess.
Cornered cinemas
As a result, the financial angle is gloomy. PVR and INOX made losses of ₹666 crore and ₹257 crore, respectively, in 2020-21. In 2021-22 they narrowed losses but only to ₹419 crore and ₹164 crore. They earlier made profits, and attribute the reversal to lockdowns and fewer releases. Others like Carnival are struggling to repay debt.
Multiplexes make over half their revenue by ticket sales. Sale of food and beverages (F&B) brings close to 25% and advertising 5-11%. In desperate attempts to revive business, they are now offering festival offers and private screenings for families. Some have even separated the F&B services from movie footfalls by tying up with Swiggy and Zomato for takeaways.
But to rescue multiplexes is a big ask from consumers. Consumption of movies hasn't caught up to pre-pandemic levels, just as two-wheeler sales, and this shows how much personal disposable income has shrunk for the urban Indian middle class.
Ousted by OTT
While multiplexes offer experience, OTT platforms offer convenience and choice. Subscription revenues for streaming platforms have jumped 30 times to ₹12,021 crore since 2017. Cinemas, meanwhile, will have to climb up from the bottom again after an 80% drop in revenue in 2020. Revenues are 25% behind this year vis-a-vis 2019, as per a PwC estimate.
But the sentiment is not always that of competition. PVR in its annual report noted: “In the US, OTT and cinemas have coexisted for almost 10 years and in this period box office ticket sales have only increased. Comparing OTT platforms to closed theatres, in our opinion, is unfair and similar to comparing an injured player to a healthy one."
How cinemas regain their health will depend on the quality (and the familiar stars) of new releases, success in pegging ticket prices to consumer income, and if OTTs turn out to be an ally or enemy.
The authors are Mumbai-based researchers.
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