Indians have always had an appetite for watching theatricals, according to a list by an online movie database, IMDB, a subsidiary of Amazon Inc. Data from the Internet movies databases reveal that actors Amitabh Bachchan and Dharmendra’s Sholay had the highest footfall in the history of Indian cinema at 18.25 crore followed by Prabhas’ Baahubali 2: The Conclusion at 10.77 crore. However, the footfalls have dropped significantly in recent times. The highest-grossing movie in 2023 was Jawan, which recorded a footfall of 3.5 crore. According to Ormax’s report, footfalls have declined by 8.44% to 94.3 crore in 2023 (post-pandemic) from 103 crore in 2019 (pre-pandemic). Despite the decline in footfalls, gross box office revenue in India crossed the Rs 12,000 crore mark, amounting to Rs 12,226 crore in 2023. On the other hand, the OTT market in India is expected to grow to reach the Rs 35,523 crore mark in 2024 and is expected to grow to Rs 46,520 crore by 2028 growing at a compound annual growth rate of 7.74%. The question that stands tall is whether the rise of OTT has resulted in declining footfalls. “Cinema remains a premium entertainment medium, with less than 95 million people entering a cinema hall in a year, since the cost for a visit is much more than what a family would spend on television for a month, which does provide them with access to many movies. This, coupled with shorter release windows on digital and TV, and the quick dissemination of reviews on social media, reduces the need for cost-conscious customers to visit cinema halls. To correct this, there is a need for ‘Janta theatres’, with lower ticket and food and beverages (F&B) prices, as well as massy content,” Ashish Pherwani, leader- media and entertainment, EY, told BrandWagon Online.
The curious case of declining footfalls
Footfalls have gone down significantly from the era of Sholay and Mughal-e-Azam to the era of Jawan, Pathan and Gadar 2. While the latter releases have set box office records, the footfalls have been comparatively lower. The Hindi domestic footfalls have gone down by 19.35% to 27.5 crore in 2023 from 34.1 crore in pre-pandemic 2019. However, the Tamil and Telugu-speaking markets have witnessed a growth in footfalls whereas Malayalam and Kannada-speaking markets have witnessed a decline. “Audiences want to watch selected content in the theatres. They have also opened up to watching global entertainment shows on OTT platforms. The South Indian cinema industry was the first to open post-pandemic and with the region’s love for theatrical, it has increased footfalls,” Girish Johar, film trade analyst and producer, said.
While footfalls have grown by 5.71% from 89.2 crore in 2022 to 94.3 crore in 2023, industry experts believe that it is still lower than the pre-pandemic levels, largely an aftermath of the Covid-induced lockdowns. Due to lockdowns, the revenue of movie exhibition businesses halted. As people have begun to return to theatres, it is believed that footfalls will eventually return or even exceed pre-pandemic levels. “There are two points to this – there has been a shift in footfall in terms of consuming movies in theatres. If in the pre-pandemic audiences watched eight movies a year, that went down to zero during the pandemic and now post-pandemic that zero has gone up to say four to five movies a year. We do not expect the number to go back to the original eight swiftly but the momentum has returned. In CY22, 80% of the total movie-going audiences returned to theatres and last year saw a recovery rate of 90%. And we believe as we had predicted it will go back to pre-pandemic levels by CY24,” Devang Sampat, CEO, Cinepolis India, highlighted.
OTT: a potential reason for footfalls?
While footfalls have grown from 2022 to 2023 by six percent, it hasn’t yet reached pre-pandemic levels. The growth of OTT platforms in India and the increased propensity to spend can be attributed as one of the reasons for the slow growth of footfalls in the movie exhibition business.
While theatrical releases increased to 1623 releases in 2022 as compared to 878 releases in 2021, more than 100 movies were released directly on OTT platforms. OTT content production reached 2,956 hours in 2022, an 18% growth over 2021, as per a FICCI-EY report. Despite the popularity of OTT platforms, industry experts believe that movie exhibition businesses will return to pre-pandemic numbers. “During the pandemic, it was believed that cinemas will shut down with movies releasing on OTT platforms. OTT platforms were the only source of entertainment for consumers during this period, However, movies exhibition businesses opened again and the numbers will come back,” Abhishek Joshi, a media expert, said.
According to industry experts, watching movies at theatres has become a family-watching experience. While consumers have a higher propensity to spend with more disposable income, the intent is not higher while viewing options have significantly increased. “OTT has given the consumers a reason to stay at home and watch content as it has blurred the lines of language with dubbed and subtitles available for regional content,” Johar highlighted.
Moreover, streaming apps have reached approximately 34% of India’s 1.4 billion population, as per an Ormax report. Furthermore, the total audience of OTT platforms rose 13.8% to 481.1 million from 423.8 million in 2022. There has been a decline in the surge from 20% the previous year. Subscription video-on-demand (SVOD) has grown marginally to 31.8% in 2022 from 30.8% in 2021, a growth of one percent. Industry experts suggest that there has been a slowdown in the OTT subscription numbers as well. “The subscription numbers have seen a plateau as the growth during the pandemic and post-pandemic is not holding. The subscription revenue is not going up of OTT platforms,” Joshi added.
Average ticket prices: the name of the game?
As per the Ormax report, the growth in revenue numbers in 2023 has been due to the increase in average ticket prices. Average ticket prices have increased to Rs 130 in 2023 from Rs 119 in 2022, signifying a nine percent growth from 2022 while growing over 22% from pre-pandemic levels in 2019. “There was no revenue during the pandemic so the movie exhibition businesses upped the ticket prices so that they would be able to rechurn their numbers,” Johar added.
While average ticket prices have gone up for Hindi movies, South Indian cinemas have had a marginal increase. Hindi movies average ticket prices increased to Rs 196 in 2023 from Rs 187 in 2022 whereas Telugu, Kannada and Malayalam have witnessed a slight increase in their average ticket prices. According to industry experts, there is a cap on ticket pricing in South Indian cinema but it remains absent in the Hindi movie industry.
There are contrarian opinions on declining footfalls as some industry experts believe that people have flooded the theatres with top releases doing well at the box office. “I disagree with the point that footfalls have come down. The releases this year in December with the likes of Animal, Dunki, Salaar and Sam Bahadur, among others have made an impact. People have started coming to the cinemas to watch movies,” Taran Adarsh, film trade analyst, stated.