5,000 reopened cinemas face challenges

Nearly 5,000 of the total 8,000 operational movie screens, which reopened by last week when first big Bollywood film Bellbottom released, continue to face challenges from muted audience response, discounted tickets and lower sales of food and beverages.

Film trade analysts said theatres may have to lower ticket prices by at least 25% in the initial weeks, plus their food and beverage sales, that contribute up to 28% of overall revenues, may be significantly impacted.

Multiplex chains looking at 80-85% of their total screen count now becoming operational, said Maharashtra and Kerala remain the big exceptions where cinemas have not reopened, while Tamil Nadu permitted operations this week onwards.

“Most states have given permissions only with 50% seating capacity and imposed restrictions on timings and days of operation, except Telangana, which has no restriction. We have permissions to open 590 screens in 121 properties and have plans to open close to 500 Screens in 100 properties by the weekend, which is 85% of our total screens,” Gautam Dutta, chief executive officer, PVR Ltd had said late last week.

While the chain is gradually opening its balance screens and properties, it is examining the state government permission order which should not be too restrictive in nature in terms of timings and weekend closures to discourage consumers to return to cinemas, he said. Since cinemas were again asked to shut down in March 2021, PVR restarted its engagement with landlords and developers to seek waivers or discounts for rent and CAM (common area maintenance) payments for FY22. “We are opening properties based on assurances received from the developers,” Dutta said.

Kunal Sawhney, chief operating officer at Carnival Cinemas, said that while theatre owners are increasingly gaining confidence, some properties that were not reopened after the first wave, need more time for their infrastructure to be refurbished given the 15-16 months of halt on operations. Devang Sampat, chief executive officer, Cinepolis India, however, said, “almost 100% of cinemas where allowed are now open”, and added that the chain intends to open all its properties in Maharashtra, too, when allowed.

To be sure, several cinemas in the same area are avoiding restarting operations as the limited films on offer right now may split the audiences and affect revenues.

A Haryana-based single screen owner said that while his theatre had opened at the beginning of July, he had his hopes pinned on Bellbottom to revive business which hadn’t done as well as expected, so far. “We’re seeing single-digit occupancies in many shows. We need to be assured of regular churn of films to continue to remain operational,” the person said.

However, a trade expert said audiences who are already wary of returning to cinemas would definitely shy away if reasonable ticket rates are not offered at this time. He declined to be named. After the first wave, a slew of small films such as Tuesdays & Fridays and Madam Chief Minister had been impacted by disproportionately high prices. The person added that the urban, affluent families will be more likely to be paranoid in the first few weeks of reopening and are likely to refrain from coming at all, and purchasing food, if they do.

PVR’s Dutta said the ability of multiplexes to charge a particular ticket price is significantly limited by legislation in certain states, such as Andhra Pradesh, Telangana, and Tamil Nadu, as well as in certain cities in such as Bengaluru, Pathankot, and Chandigarh, which control cinema ticket prices. Rajender Singh Jyala, chief programming officer at INOX Leisure Ltd, said pricing will be computed-based on the paying propensity of guests, nature of content and the other cost structures.

“We used to follow three tiers of pricing—low, regular, and premium, before the pandemic. So, while we can’t go too low because our expenses are high at this point because of covid, we will not be charging premium rates even for a star film like Akshay Kumar’s,” Carnival’s Sawhney said. Live Mint