‘More than 80 movie titles awaiting theatrical release’

Cinépolis, a Mexican multiplex chain, is the only foreign firm that ventured into India’s complicated film retail business in 2009. The estimated $2-billion Cinépolis has 6,704 screens in 17 nations — 390 in India. These brought in an estimated ~1,400 crore in revenue, placing it among India’s top multiplex chains. JAVIER SOTOMAYOR, managing director, Asia and Middle East, spoke to Vanita Kohli-khandekar on how

Cinépolis plans to get back on its feet in India. Edited excerpts:

How has the pandemic and the lockdown affected Cinépolis?

The pandemic and subsequent lockdown is an unprecedented event without a parallel in the last 100 years. The exhibition industry has been one of the worst affected. In India, theatres were one of the first establishments to be shut down in mid-march and continue to remain closed six months later.

This is the first time where we have had zero revenues for over half a year. No company is prepared for such a scenario. The lockdown brought multiple challenges. Over time, we have developed robust processes and discovered that teams can interact remotely and maintain a high level of productivity.

We are optimistic about the fundamentals of our industry and how the situation is starting to improve. Cinépolis has been able to re-start its operations in some markets including the US, Mexico, and Spain.

What are the three major challenges to get up and running?

The first challenge is to preserve cash. This situation is dire because of our inability to generate revenues. We foresee a negative cash flow even when the reopening starts, since it will take time for us to get fresh content, and people will feel insecure about going back to the cinema.

We have taken urgent actions to address this, including suspending non-essential expenditures, implementing reductions in executive compensation, and negotiating with realty developers, vendors, and other business partners to manage or defer certain costs. This is essential to ensure that the company survives and can reopen once allowed to do so.

The second challenge is to convince authorities as well as our patrons that cinemas are safe. We have put into place stringent safety protocols. There have been numerous studies that show that cinemas are safer than other establishments including restaurants, which have been allowed to open.

The final challenge is securing new movies. Many producers have decided to release their movies on digital platforms. We regret their decision, but understand this extraordinary circumstance demands exceptional actions. On the other hand, we have received the support of producers who are holding their films until cinemas reopen.

What is your reboot strategy? Is it different for different parts of India?

Our strategy consists of three phases. The first is the pre-opening phase. In this we will get all equipment and manpower back into operations mode. All safety protocol training and certification of our staff will be completed.

The second is the opening and ramp-up phase lasting 12 weeks from opening. We will communicate the safety protocols as well as the movie line-up to our patrons and continue to scale up our operations as more and more people start coming back. There may be a staggered opening of cinemas around the country based on state guidelines or a simultaneous opening pan-india. We are prepared for both.

Finally, a new normal will be in place from week 13. We expect that certain changes made in the experience will stay with us permanently, including the digital-first approach to ticket booking and ordering food and beverages.

How is the on-ground situation in India different from other countries in Asia?

The lockdown in India has been significantly more severe. Japan and Singapore had short lockdowns of 8-10 weeks. In South Korea, there was never a shutdown of theatres. So, compared to India, the exhibitors in these countries are in a better position.

Also numerous studies abroad have shown that cinema-going should be considered as a medium risk activity, not a high-risk one.

Is the availability of new films going to be a problem when theatres open up?

India is better placed than other markets. There is a vibrant and active domestic movie production industry that churns out over 1,000 films a year. Most other Asian markets are reliant on Hollywood content, which releases 350-400 films in a year globally.

While the outlook for new Hollywood content is moderate for 2020, there is a strong pipeline of over 80 titles from Bollywood and other regional languages waiting for release in theatres, in India.

However, there will be an initial ramp-up period. We would be opening classic and ever-green movie content to pull patrons back to the cinemas.

“This is the first time where we have had zero revenues for over half a year”