The films industry posted a decline of 29.1% to Rs 1062.4 crore in Q1,CY20 when compared to same period, last year
With as many as 147 people being infected by the Coronavirus, the state governments have issued edicts to shut down cinema halls and multiplexes till March 31. The move is set to have an adverse impact on the business of the exhibition companies, add to that the slow uptake of the Hindi film industry in the first quarter of CY20. The film industry posted a decline of 29.1% to Rs 1062.4 crore in Q1,CY20, when compared to the same period, last year. In Q1,2019 – multiplex operators in total posted Rs 1499.4 crore, as box office collection.
Last year, movies such as Uri: The Surgical Strike, Manikarnika: The Queen of Jhansi, Total Dhamaal, Gully Boy, Badla and Luka Chhupi raked in more than Rs 100 crore in box office collection. Meanwhile, this year, only Tanhaji: The Unsung Warrior and Baaghi 3 entered the 100 crore club, making Rs 367 crore in total box office collection.
According to industry analysts the first quarter hasn’t been good for the industry. “A lot of hopes were pinned on Sooryavanshi which was supposed to released on March 24. The balance sheet of the first quarter is going to be downtrodden because of the postponement of this one release, which would have changed the whole game for the first quarter,” Komal Nahta, film critic and trade analyst, added.
According to industry estimates, the film industry is expected to lose anywhere between Rs 600 crore – Rs 800 crore in the advent of cinema halls shutting down. However, this loss can escalate given the nature of the virus and an increase in the number of people affected, thereby increasing the period of quarantine. According to Ashish Pherwani, partner, media and entertainment, EY, the movie business works on a number of weekends. “One cannot estimate the total loss the industry will incur as the likelihood of people filling up the theatre after the curbs are removed is also up in the air,” he stated.
On the other hand, Lloyd Mathias, angel investor, marketing and business strategists, believes that a small percentage of the losses can be assuaged. “A lot of producers will push back the release dates of their movies in order to refrain from incurring huge losses. However, some part of the losses already incurred will be offset by either a delayed released date or by increasing the rates for broadcast output deals,” he elaborated.
As per Acuite Ratings and Research Limited, central government and the state governments measures to stem the expected spread of the virus including banning public events, shutting down schools, malls and other places of public activity is expected to result in a very sharp drop in footfalls in the multiplexes particularly the ones which are in malls. “It is estimated that box office collections have already declined year-on-year over 10% in Jan-Feb 2020 and this is likely to get worse in Q1FY21. This will lead to a substantial drop in quarterly EBITDA for listed multiplex players such as PVR and INOX,” Suman Chowdhury, president-ratings, Acuité Ratings and Research, said.
Taran Adarsh, film critic and trade analyst, too believes that when theatres reopen, cinema halls will not see the usual footfall that they normally record on weekends. Acuité expects a precipitous drop of over 50% in multiplex footfalls in the next two-three months particularly for those which are primarily located in retail malls at tier 1 and tier 2 cities.