Theatres, facing a Covid-like scenario, shut screens due to fewer releases lined up

07/05/2024

Looks like it’s déjà vu for film exhibitors. Theatres are shutting down, running fewer shows, and finding it hard to make ends meet. This was the situation during the two years of the pandemic and they’re facing the same plight again.

The villain this time is the poor supply of content. Exhibitors are worried because filmmakers and producers are holding back movies.

Upcoming film Baby John starring Varun Dhawan and southern superstar Keerthy Suresh was scheduled to release on May 31 but has been pushed back to sometime in June or July. The makers of the film have postponed the release reportedly due to unfinished post-production work.

Multi-starrer Kalki 2898 AD starring Prabhas, Deepika Padukone and Amitabh Bachchan, which was scheduled to release on May 9, will now release on June 27.

The delayed releases come after April turned out to be a washout month at the box office. Akshay Kumar and Tiger Shroff-starrer Bade Miyan Chote Miyan, which hit the big screen during the Eid holiday, a lucrative period for the film business, did not perform well. The Rs 350 crore film has earned about Rs 74 crore in India so far.

After the failure of that film, exhibitors are now fearing a dearth of new films, saying they do not have enough content with only a few releases scheduled in May.

Under stress

“We are forced to cut down on shows and close down some screens,” said Ashutosh Agarwal, director at Starworld Cinemas, who has shut down two of the four auditoriums that he operates. “I am playing old films by announcing festivals like Yash Raj or the Kapoor festival. In Tamil Nadu, Vijay-starrer Ghilli was re-released, and the film did well. But these strategies are to meet some expenses and to recover some part of the costs of running the cinema.”

Ghilli which was released on April 20 on the big screen again to celebrate the film’s 20th anniversary has earned Rs 22 crore in 15 days in Tamil Nadu alone. From overseas market, the movie has collected around Rs 3.5 crore, taking the total to around Rs 30 crore.

PVR Inox, the largest multiplex operator in the country, also pointed to the current challenges due to weak content supply. Co-CEO Gautam Dutta told Moneycontrol recently that the coming months will not be easy because of the content pipeline.

The multiplex chain has been promoting products such as the PVR Inox Passport, which is a subscription to four movies every month, and ad-free screenings of films to drive footfall, which across the industry remains 25-30 percent lower than pre-Covid levels.

PVR Inox shares have fallen over 20 percent so far this year. They traded at Rs 1,307, down 1 percent, on the National Stock Exchange at 11:12 AM on May 7.

The scenario is grim, said Girish Johar, a producer and film trade expert.

“After the first three months of 2024, which were not good for the film business, the April-May-June period is also not looking good despite the summer box office being a lucrative period. Cinemas are looking to save costs and theatres in tier three and four markets are shutting down temporarily. Even multiplexes are curtailing screens and not operating all screens. Some cinemas are filling screens with concerts, Korean films, and old Hindi content,” he said.

We are in survival mode, said Vishek Chauhan, who operates Roopbani Cinema, a single-screen theatre in Bihar.

“We have nothing to play. If there are no films to play, theatres will shut down. After Bade Miyan Chote Miyan, there are hardly any films that will manage to do one show in our cinema. Films like Srikanth (releasing on May 10) will not have strong traction in the majority of single screens,” Chauhan said.

He said that two cinemas in Patna have shut down and two cinemas in his area (Purnia) have closed.

“Many cinemas across India are closing down temporarily until the content pipeline stabilises. For multiplexes also, the challenge is big because for them to sell popcorn worth Rs 500 they need that kind of content,” he said.

Chauhan said barely 50-60 people occupy his 300-seat capacity cinema currently, which is just not enough footfall to meet expenses.

“Daily expenses are about Rs 25,000-30,000 for a single screen and for a three-four screen property, it would be around Rs 40,000-50,000 daily. To cover the cost, I need a film which brings at least Rs 50,000-60,000 worth of collections daily. Then there is also the distributor’s share of 50 percent. While F&B is a major revenue source, it also sells when the content as well as the footfall are strong. Of the 50-60 people currently coming to my cinema, only 25 percent opt for F&B,” he said.

Theatres have also slashed ticket prices by offering discounts to attract movie-goers. Mukta A2 Cinemas implemented a Rs 99 price for all shows for the Ajay Devgn sports drama Maidaan released on April 10.

“With theatres cutting down ticket prices, they need even higher footfall to offset the discounted ticket cost. There are 300-400 people needed daily in a screen to make ends meet. The struggle of exhibitors will continue in May and June,” Chauhan said.

He added that it is not only about how much money a film makes, it also is about how fast it makes money because operational expenses are fixed.

“The film that draws maximum occupancy will be more beneficial for cinemas. I will be able to sell more F&B. Currently, I have films running at 25 percent occupancy, unlike for Pathaan, which ran at 90-100 percent occupancy for two weeks. I did not get this (high occupancy) with Shaitaan, Fighter, and Article 370,” he said.

Multiplexes such as Mukta A2 Cinemas are closely monitoring their costs.

“It’s a lean period, so we are ensuring we control all the excessive costs. Wherever we feel the admissions are low, the shows naturally get cancelled. We are scheduling movies with data backing the fact as to which time slots are working versus which are not, thus ensuring no excessive operating cost,” said Satwik Lele, COO of MuktaA2 cinemas.

Election interruption

The condition is really bad for cinemas currently because content has been pushed due to the election, said Amit Sharma, managing director of Miraj Entertainment. “April was a complete wipeout – so will be May.”

Parliamentary elections in the country are scheduled in seven phases from April 19 to June 1.

Across languages, makers want to avoid the election period because the effort and cost to push/market the content is high when the mood of the nation is of elections, said Johar. However, he added that makers/producers are on the backfoot and because even big films have not performed at the box office, the impact of elections is felt more.

“Releases could have come because the period is bountiful, but the sentiment is weak. The limited content supply is more in Hindi followed by Tamil and Telugu. Malayalam has done well so far. Hollywood content is also being released,” he said.

While polls are depicted as a challenge due to which producers are shying away from releasing films, Agarwal cited the example of Avengers Endgame, which was released during the 2019 general elections from April 11 to May 19. The Hollywood film was released on April 26, 2019, and earned about Rs 445 crore.

“Wherever elections are happening, movement might be restricted otherwise there is no problem. School holidays are going on, flights are going full, people are going on trips. It is just that filmmakers are not confident about their products, hence delaying films by giving reasons like more work is left to release a movie,” Chauhan said.

OTT trouble

The owner of Roopbani cinema sensed trouble brewing on the streaming front. Film trade analysts noted that over the top (OTT) platforms have cut down film acquisition costs, especially of big-budget movies, and they are linking the rates to a film’s box office performance. Big films like Fighter and Bade Miyan Chote Miyan have underperformed, which has led to a dip in sentiment for marquee content.

“OTTs are not paying the kind of price filmmakers/producers are expecting. Makers have to factor in a higher theatrical revenue, which is making them indecisive about when to release a film in a theatre,” said Chauhan.

While OTTs paid high premiums earlier to acquire films, especially the big movies, they are now more focused on how much subscriber pull a movie has and are not making big bets on big films.

Despite the many challenges, Sharma is hopeful.

“After mid-June, the situation may get tough for content makers to release films because every week there will be one-two big films releasing,” he said. Upcoming releases include Singham Again, and Bhool Bhulaiyaa 3 starring Vidya Balan and Kartik Aaryan.