Earlier this month, PVR INOX announced that it would be shutting down 50 screens in the next six months across the country, noting that these properties were either loss-making or housed in malls that had reached the end of their life cycle. The chain also reported a loss of `333 crore in the last quarter of FY23, which was attributed to both the merger process and a volatile, post-pandemic year for the film industry.
So the big question is, can multiplex chains overcome the OTT onslaught?
Take this. According to The Ormax OTT Audience Sizing Report 2022, India’s OTT universe grew by 20% between 2021 and 2022, with the audience universe swelling to 424 million people. Of these, 119 million are paid OTT subscribers. Yes, cinema footfalls increased to 994 million in 2022 after all Covid restrictions were eased, but the number was still significantly lower than the 1.46 billion footfalls in 2019.
But make no mistake: multiplex owners are not taking things lying down.
Driving up footfalls
Experts agree that multiplex owners have a role to play in driving up footfalls. “Cinema chains can introduce various initiatives like film festivals, or use their loyalty data better, or consider giving smaller films special treatment to bring in audiences,” says Ajay Mehta, MD at Kinetic India, and founder and MD for iTV (GroupM).
Cinépolis, the third-largest multiplex chain in India, for instance, ran an Oscar Film Festival in March this year. The festival brought critically-acclaimed films to its multiplexes across 24 screens in 19 cities. Indeed, it says it is expanding its presence in India from 442 screens to over 1,000. The fact that it has recently signed on 600 new properties flies in the face of doomsday theories that OTT will soon sound the death knell for cinemas.
For its part, PVR INOX has rolled out a unique initiative called the 1-rupee 30-minute trailer show, where audiences can get sneak peeks of upcoming movies. Gautam Dutta, co-CEO at PVR INOX Ltd, adds that the chain has re-introduced its weekend nostalgic show, which is a special screening series of beloved classic films, allowing movie enthusiasts to relive their favourite moments.
That apart, the company states that its expansion plans are still on track and that it will have 150-175 new screens this fiscal. PVR and INOX Leisure completed their merger in February 2023, to become the country’s largest cinema multiplex chain, with 361 cinemas in 115 cities in India and Sri Lanka.
That said, a big challenge facing multiplexes is the lack of quality content (read good Hindi cinema). Hindi movies have lost 17% market share since 2019, according to a FICCI-EY report, while South Indian films commanded over 50% of box office revenues in 2022.
But Dutta of PVR INOX remains optimistic. “The Hindi cinema industry has always been resilient and has bounced back from difficult periods. Recent movies including Pathaan, Mrs Chatterjee vs Norway and Tu Jhoothi Main Makkaar have proven to be blockbusters at the box office,” says Dutta. He adds that The Kerala Story too has been performing well this month, with box office collections said to be above Rs 200 crore, indicating that there is a strong appetite for engaging stories. With movie releases such as Luka Chuppi 2, Adipurush and the Shah Rukh Khan-starrer Jawan lined up over the next few months, Dutta expects Hindi cinema to make a comeback.
Mehta of Kinetic India says that Hindi cinema has no option but to evolve with changing consumer tastes. “The success of movies like Pathan has shown that the audience is still eager to come back to the cinemas if the content appeals to them. H2 has traditionally been stronger than H1 for Hindi cinema and with some good Hindi releases lined up, we can expect a revival in the latter part of the year,” he states.
Pointing out that it is premature and even pessimistic to write obituaries for the big screen, film critic and business analyst Taran Adarsh recommends that cinema chains should in fact look at making movie-viewing more affordable for all. While multiplexes have elevated the movie experience for audiences, he says that ticket pricing and F&B cost could be managed better.
Sob story
Why are footfalls falling?
Hindi movies have lost 17% market share since 2019
South Indian films commanded over 50% of box office revenues in 2022
Cinema footfalls increased to 994 million in 2022, but were still lower than the 1.46 billion in 2019
Shorter windows between theatrical & digital movie releases have impacted footfalls
OTT platforms are likely to do digital-only releases, affecting content line-up for cinemas
What can cinemas do to drive up footfalls?
Introduce unique film festivals
Leverage successful South and international releases
Special treatment for smaller films
Better pricing to make watching movies affordable