Experts believe exhibitors may now consider screening OTT in multiplexes, in a move that could work well for the streaming platforms too.
If all goes well, people will soon be thronging cinema halls as the magic of the big screen lures them back. However, the increasing presence of OTT (over the top) programming in homes across the country will compel both film producers and exhibitors to re-think strategies. As much as films screened in the theatres are different from the content streamed on OTT platforms, there’s no denying audiences are now used to good quality programming – global and local.
Experts believe exhibitors may now consider screening OTT in multiplexes, in a move that could work well for the streaming platforms too. Given that only about an estimated 29-32 million consumers pay to watch OTT content when compared to about 100 million people that cinemas collectively attract, this seems like a good bet, say analysts. “Exhibitors need to de-risk from films in a sense. Even if they run OTT content that is a year-old there will be a huge audience that would not have been exposed to it,” Ashish Pherwani, partner at EY, points out. Pherwani believes that in a couple of years from now theatres might screen different content in the tier two and Tier three cities and also tweak pricing. In fact, Ajay Devgn’s NY Cinemas aims to operate theatres in tier two and three towns where there is often an inequitable distribution of screens. As early as in 2019, investments worth Rs 600 crore had been committed for the project.
Jehil Thakkar, partner at Deloitte, doesn’t believe exhibitors would need to incorporate structural changes into their business models since people would be more open to visiting theatres once the environment gets safer as experience from other countries has shown. However, exploring different formats such as smaller theatres in neighbourhoods could help increase screen density.
Having more screens across regions and formats will make the industry more resilient in a future crisis, says Thakkar highlighting the fact that the pandemic-induced lockdowns have broadly been localised in nature. He feels pricing strategies may change to match the type of content being screened. “Average ticket prices have been going up by 9-10% annually pre-pandemic. They may have to temper that for a period,” adds Thakkar.
But others feel cinemas, that have sufficient space, should also consider turning themselves into esports arenas, at least partially. Esports is not restricted to the virtual medium and can be organised in stadiums and other physical avenues. The viewership of esports tournaments in the country is estimated to cross 85 million by 2025 from about 17 million currently, a lucrative opportunity that exhibitors can tap into.
The pandemic has hit multiplex businesses badly; the film business in the country more than halved to a little over Rs 7,000 crore in 2020. Box Office collections for Bollywood dipped to about Rs 500 crore in 2020 from a record over Rs 4,000 crore in 2019. Leading players PVR and Inox posted combined losses in FY21 of close to Rs 1,100 crore and must brace for a bad FY22. For now, they’re working to provide a more personalised cinematic experience. Inox has launched private screenings, priced at a minimum of Rs 4,999 wherein customers can book an entire auditorium to watch a movie with their family and friends. The F&B service has been re-vamped so that patrons can order food and have it delivered outside of the multiplex premises.