The industry is expected to rake in about `6,100 crore in FY21 as opposed to `18,300 crore in FY20
The film industry is set to shrink by as much as 67% y-o-y in FY21 on account of the pandemic induced shutdown of cinema theatres
The film fraternity is gearing up to resume business on October 15, when theatres reopen across several parts of the country, but big budget films may stay away until Christmas. Cinema theatres have been shut since March 24, with the filming and production of several films hampered when India went into a lockdown. As per a recent KPMG study, the film industry is set to shrink by as much as 67% y-o-y in FY21 on account of the pandemic induced shutdown of cinema theatres.
Delhi, West Bengal, Gujarat, Goa, Karnataka and a few other states have decided to allow cinema theatres to reopen in October with 50% seating capacity. Maharashtra and Tamil Nadu will keep cinemas shut until October 31. Together, Delhi and Maharashtra account for more than half of a movie’s box office collections.
The limited opening may contribute little to the overall industry revenues. Girish Menon, partner and head, media and entertainment, KPMG, says, “Unless theatres in key revenue-contributing territories open up, it won’t be viable for Hindi films to go for a theatrical release. While there will be some incremental revenues coming in from the opening of theatres, given the continued Covid-19 cases in the country, we do not see these to be meaningful.”
The industry is expected to rake in about `6,100 crore in FY21 as opposed to `18,300 crore in FY20. KPMG’s estimates factored in a phased reopening, capping on seating capacity, limited slate of movies that will likely be released in theatres over the next few months, as well as people’s aversion from going to crowded places in the near future. Film producers are cautious about introducing big budget films before a pan-India distribution can be ensured. While exhibitors are hoping that Akshay Kumar starrer Sooryavanshi or Ranvir Singh’s 83 may hit theatres in time for Diwali, producers are not confident releasing these movies yet.
Another highly anticipated release, Aamir Khan’s remake of Forrest Gump called Laal Singh Chadda, which was originally slated to release this Christmas, has been delayed by a year.
For big budget movies like Sooryavanshi and 83, an all-India release is important, and producers aim to open with 3,000-4,000 screens. “The producers will need to consider the impact of low occupancies along with how unlocking is progressing when planning for a theatrical release to ensure they maximise theatrical revenues and reach a wide audience. As a result, big releases are more probable towards Christmas,” says Menon.
Film studios are also looking at a hybrid model of distribution, industry analysts say. For instance, Zee Studios released Khaali Peeli on its pay-per-view platform ZeePlex and organised drive-in shows for three days. Shariq Patel, CEO, Zee Studios, says the company, which has a lineup of movies ready for release, is trying to find new and innovative ways to reach audiences.
Film exhibitors are planning on rebuilding confidence through a temporary content strategy. This will include a greater focus on regional movie releases and reruns of old movies until big budget movies hit theatres. Pramod Arora, chief growth and strategy officer, PVR, says a slew of new movies have been lined up for release in West Bengal which is gearing up for Durga Puja. He adds that the reopening of theatres is also contingent on whether the real estate partners agree to a revenue sharing deal. For the time being, theatres located in spaces where a revenue sharing deal has been struck will reopen.
Kunal Sawhney, senior vice-president, Carnival Cinemas, says the content strategy will be a mix of small budget films, regional movies, films launched just before the country went into lockdown and evergreen movies from the last four-five years. Deloitte’s Jehil Thakkar believes that launching movies that have already premiered on OTT platforms could work, too. “Since the movies were mostly behind paywalls, filmmakers could opt to release them in theatres to cater to an audience that may not have had access until now,” he says.
Meanwhile, ticket aggregator BookMyShow, has reworked cinema seating layouts on the platform to ensure restricted occupancy standards, while also allowing cine-goers to evaluate safety measures set in place by cinemas before booking tickets to a film.