With low footfalls, multiplexes turn to other revenue generation sources

By: |
November 22, 2020 11:40 AM

These include food delivery and private screenings

The revival of the industry has been quite slow, leading to cinema owners eyeing alternate means of revenue generationThe revival of the industry has been quite slow, leading to cinema owners eyeing alternate means of revenue generation

For more than a month, cinema theatres have been open to the public at 50% capacity, albeit not pan-India. In mid-October, several states like Delhi, West Bengal, Uttar Pradesh and Karnataka allowed theatre owners to restart operations. In early November, Maharashtra and Tamil Nadu, two crucial markets for the Indian film industry, joined other states in reopening cinema theatres.

However, a few states such as Kerala, Jharkhand, Telangana and Rajasthan continue to keep multiplexes and theatres shut. And in the absence of a pan-India reopening, producers are being cautious with movie releases. As a result, the revival of the industry has been quite slow, leading to cinema owners eyeing alternate means of revenue generation. Even though some states have given the go ahead to screen movies, not all cinema theatres have opened in these states.

Alok Tandon, CEO, INOX Leisure, says only about half of INOX theatres have resumed operations. Among theatres that are welcoming audiences, the footfall is hardly something to write home about, say industry insiders. Kunal Sawhney, senior vice-president, operations, Carnival Cinemas, says theatres are yet to reach the pre-Covid operational benchmarks, mainly because of the absence of fresh content. PVR Cinemas is hoping to draw viewers with film festivals where the ticket prices will be attractive. The Yash Raj films festival, which concluded on November 19, allowed viewers to watch movies like Kabhie Kabhie, Veer-Zaara, etc, for just`50 per ticket.

On November 20, two new English films hit the screens: The War with Grandpa starring Robert De Niro and a romantic comedy, The Broken Hearts Gallery. While this is encouraging, viewers are looking forward to Bollywood releases like Ranveer Singh-starrer 83 and Rohit Shetty’s Soorvayanshi.

Until producers are confident about releasing big budget films, alternate revenue streams are the only way to stay afloat for cinema halls. “In the interim, multiplex owners need to find ways to monetise their brands and the loyalty they have built through user experience. These could be either capitalising on the theatrical experience or the other value adds that viewers avail at the movies,” says Rajib Basu, media and entertainment leader, PwC India.

That is perhaps why INOX Leisure, PVR Cinemas and Carnival Cinemas have begun offering private screenings, options to organise parties in theatres, and create spin-offs of their in-house food and beverage spread. Tandon says the demand for private screenings is high. “The demand is not just metro-centric, but equally from tier-2 and tier-3 markets,” he adds.

These private screenings for a group of five-10 people can start at `2,000-`3,000. Sawhney says that at Carnival Cinemas, people can screen their wedding videos or any other videos stored in video formats that can be converted to be screened in theatres. The revenue generated from private screenings alone may not be cost-effective, though. Hence, multiplexes are counting on viewers adding on services like food and beverages, and watching movies at premium screens. Basu says F&B contributes to almost 60% of a multiplex’s revenue, with ticket sales bringing in about 40% revenue.

Carnival Cinemas had recently also forayed into the cloud kitchen business. Under the brand names of Purple Canteen, Green Canteen, Movie Munchies and Red Bubble Cafe, Carnival Cinemas is monetising its F&B arm through food delivery aggregators Swiggy and Zomato in states like Maharashtra and Kerala. Meanwhile, PVR Cinemas has renewed its association with Indian Super League team Chennaiyin FC, to give fans an experience of watching the games on the big screen.

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