It’s a long road to recovery for entertainment industry
Social distancing, future contagions to reduce footfalls
Film buffs eager to watch ’83, (April release), the Kapil Dev biopic starring Deepika Padukone and Ranveer Singh, or Sooryavanshi (March release), starring Akshay Kumar and Katrina Kaif, will have to stay away, and that may pave the way for a new trend in movie watching.
The shutdown of cinema halls and multiplexes, for at least a couple of months, owing to the coronavirus lockdown, could have growing implications for the future of entertainment.
Box office revenues of Indian films will no doubt shrink, thanks to ‘social distancing’, says Kishore Lulla, chairman and chief executive officer (CEO) of
Eros International.
The last couple of years have seen consolidation in the cinema-theatre trade with top four players — PVR, INOX, Carnival Cinemas and Cinepolis —dominating the multiplex screens in India.
The largest one, PVR, has a total count of 706 screens across 152 properties in 60 cities. All these have been shut indefinitely.
Lulla, who partnered Chinese distributors for his films, says the feedback he gets is that theatres ought to open in China in a couple months. “However, once the theatres open, the new norm will be for operators there to sell tickets at 25 per cent capacity, in order to avoid the risk of any relapses of a contagious disease,” he says. “That may even become a global trend.” He says that even when the disease is contained and quelled, there’s a strong likelihood that people would avoid crowded facilities for a while.
One industry veteran says,
“Consumption of entertainment would change forever, and the road to recovery will be a long haul because there is no visible vaccine or cure at hand. It’s all about containment.” He adds that no one would step out into the theatres for a long time and when they did it would be a changed habit and footfalls would have fallen by over half. He says: “There will be two to three months of containment, and when there is normalcy, the risk is a relapse and a return to lockdowns. So, 2020 is a washout.”
Lulla adds that box office sales will decline sharply in the near future. “Hopefully, people still need entertainment and that’s something which is available digitally. Revenues for the industry should spike considerably for online content distributors and platforms.”
He says the shares for different formats will change but the overall pie for entertainment may increase, given the state of lockdowns across the world.
Akash Banerji, business head, Voot Advertising Platform, says that he’s seen a 25 per cent surge in the average daily sessions per user for the online content platform Voot.
More than one third of Voot’s subscribers have been
frequenting the app at least five times in a day, spending over an hour in total.
“Some of our shows have become superhits with a 40 per cent surge in consumption for the top 15 shows across genres and languages,” says Banerji. He adds that an “8-inch, 12-inch or even 50-inch screen cannot compete with a big cinema theatre experience.”
Last year had incidentally been a good one for the industry, with a higher-than-expected growth of 15.1 per cent in financial year 2019 with more than 13 movies crossing ~100 crore each at the box office.
This made it the industry’s best performance as content took centrestage and small budget movies turned out to be moneyspinners.
According to an analyst report by Kotak Equities, the key trends of the industry’s net box office collections (NBOCS) revealed two patterns –growth in the number of films crossing the ~100-crore and ~200-crore mark and the rise of young stars.
The report went on to detail how, over the past few years, the top five movies dragged NBOC growth due to the fading box office performance of big stars (the three Khans). At the same time, that’s been compensated for by the rise of a new lot of stars that include Ranveer Singh, Ranbir Kapoor, Shahid Kapoor and Tiger Shroff.