Winning the trust of loyal film-goers will now be the biggest task awaiting multiplex chains and single-screen owners.
After more than two quarters, or over six months, of hiatus, cinema halls across India will reopen from October 15. But they will be required to follow a strict set of guidelines, like they can fill up to 50 per cent of the hall and only sell packaged food.
The outbreak of the Coronavirus pandemic had brought the film industry to a standstill. Except for a few digital releases, it remained in a state of dormancy.
"Fifty per cent seating is an optimistic beginning, after remaining shut for seven months. We understand and respect the rationale behind this," says Saurabh Varma, CMO, INOX Leisure, adding, "To be honest, we are not looking at revenues, profitability and viability for the immediate future."
Last year (in 2019), 10 crore Indians went to the theatres to watch movies. The number was same in 2018. But in 2019, solid content pipeline, coupled with various initiatives, drove higher repeat footfalls, which witnessed an 11.6 per cent increase.
Winning the trust of loyal film-goers will now be the biggest task awaiting multiplex chains and single-screen owners. Gautam Dutta, CEO, PVR Cinemas, has hailed the standard operating procedure (SOP) rolled out by the Ministry of Home Affairs.
"We are all set to reopen in a phased manner, wherein the first phase, beginning from October 15, will focus on rebuilding the trust in customers to normalise stepping out of their homes. Our idea is to give our consumers sufficient opportunity and reason to act as both our health inspectors and auditors, as well as our evangelists."
When it comes to trust, a brand’s value will be tested, feels Varma, of INOX Leisure. "Consumers will turn to brands that they trust, and that’s where our years and years of hard work will give us an edge."
The domestic theatrical market grossed Rs 11,500 crore in 2019, as against Rs 10,200 crore in 2018. However, because of the uncertainty surrounding the opening up of cinema halls, producers released their films on video-on-demand (VOD) platforms, like Amazon Prime, Netflix and Disney+ Hotstar. This begs the question: are there enough movies available to pull people to the theatres?
"First of all, people go to the theatres because they want to enjoy the experience," says Rajesh Mishra, CEO, UFO Moviez, adding, "The OTTs have barely taken away content worth two months. Every week, around 20 films release in India, including those in regional languages. Yes, tent-pole films help in generating more footfalls, and in the early days, there would be a crunch. But it is important to start, and once the theatres open, market forces at play will start planning."
Maharashtra and Delhi-NCR are the key zones for multiplexes. Apart from that, a number of films release in eastern India during Durga Puja.
"There are 12 Bengali films ready for release in West Bengal. There are movies in Gujarati too, which will be released soon. South has some movies in the pipeline, and once the theatrical releases start, the producers will prepare their next slate of releases too. Because it was clogged, the investors were not taking risks. We need to understand that economically, OTT can’t be a substitute of theatrical revenue," says Mishra.
"This crisis is temporary," says Varma, adding, "INOX will see a slew of releases in Kannada, Tamil, Telugu and Malayalam over the next 3-4 months. These include 'Master', 'KGF2', 'Marakkar', 'Annaatthe', 'Jagame', 'Thandhiram' and 'RRR'. No doubt, Diwali has always been the biggest weekend in the Indian film industry’s calendar, and this year, the anticipation is much higher. We are optimistic that a movie outing will surely be a part of the Diwali celebrations for millions of households this year too."
While there are films, there aren't many that can lure Mumbaikars and Delhiites, who are also the biggest spenders, to the theatres. But Hollywood can come to the rescue, feels Girish Johar, a box-office analyst. "'Tenet', 'Mulan', 'Unhinged' and the likes are there for release, and those can attract people to the theatres."
Akshay Kumar's 'Sooryavanshi', '83' (the Ranveer Singh-starrer on Kapil Dev's 1983 Cricket World Cup win), and Amitabh Bachchan and Emraan Hashmi's 'Chehre' are the big-budget Hindi films ready for release. However, their producers have not announced a date yet.
"'Sooryavanshi' has got postponed, and as of now, there is no big release slotted for Diwali. In such a scenario, 'Tenet', which got a lot of patrons globally, can be a Diwali release," adds Johar.
The government, in its SOP, mentioned that the cinema halls can only sell packaged foods to the movie-goers. In 2019, the food and beverage (F&B) segment remained the second biggest source of revenue for multiplexes, with gross margins typically between 70 and 75 per cent. Going beyond the usual popcorn and beverages, multiplexes now have live kitchen counters, gourmet menus, celebrity chefs, automated kiosks and even a butler on call.
Globally, the ratio of ticketed and non-ticketed revenue is typically 1:1, whereas, in India, non-ticketed revenues are 40-50 per cent of ticketed revenues for larger multiplex chains.
"F&B has remained, and will always be, a very important aspect of our business. The fact that our guests spend about three hours at our premises, makes F&B services more important, as the propensity to consume increases," asserts Varma, of INOX Leisure.
How severe will the SOP impact be on the F&B business? "Thanks to a lot of food partners that we closely work with, we will be able to provide decent eating options, as per the current guidelines. Once the guidelines are relaxed, we will be happy to switch back to our renowned F&B services. We, therefore, see our F&B performance being at par with the regular restaurant businesses," Varma adds.
Cinema halls reopening is music to the ears of two lakhs direct employees of the sector and around 20 lakh people who work in the filmed entertainment industry. Many lost their jobs, some even changed their industry.
"There are about 75 different departments that work to produce a film. It is great that the wheel will start churning again," says Mishra, of UFO Moviez.
The October-December quarter is always the highest-grossing period for theatres in India. "This year, that won't be the case. The October-December quarter will be slow, but I feel that the January-March quarter will be at par with the last quarter of the previous fiscal (2019-20)," concludes Mishra.