Cinema operators want theatres to open ‘on an urgent basis’

India’s multiplex industry is one of the worst hit by Covid-19 because the pandemic-induced lockdown has forced theatres to remain shut since March 2020. Cinema owners expect Unlock 4.0 to bring some respite for them in the coming weeks. While other public places including malls, salons, restaurants, gymnasiums, etc. have been allowed to operate with restrictions, theatres have remained non-operational, resulting in steep losses for the industry.

The Multiplex Association of India (MAI), a national multiplex trade body representing more than 18 regional and national multiplex chains, has appealed to the government to allow theatres to reopen “on an urgent basis”.

The body, which represents around 90% of the multiplex industry in India and operates more than 600 multiplexes, said that the movie exhibition sector that provides employment to lakhs of people had lost an estimated ₹9,000 crore in the last six months.

Around 10,000 cinema screens across the country have been shut for close to six months; the movie exhibition sector has suffered financially and could be staring at job losses unless theatres reopen, according to the industry. However, reopening theatres when the number of Covid-19 cases are still going up would be difficult for the government.

MAI took to Twitter with hashtags such as UnlockCinemaSaveJobs and said, “Due to a countrywide lockdown, the cinema exhibition industry has run into an extremely adverse and hostile situation; it was the first sector to be shut down and [will be] the last sector to reopen.”

“Given the dire economic impact of the epidemic on our sector and livelihoods of people, we sincerely urge the government of India to allow reopening of cinemas on an urgent basis,” it said.

In July, MAI had unveiled several measures such as paperless tickets, seat distancing, staggered intervals, regulated entry and exit, and regular sanitisation. India’s largest multiplex chain PVR said, “The joy of watching stories unfold on the big screen: the clapping, laughing and tears. We miss it. Can’t wait to have you back at the movies! #UnlockCinemaSaveJobs,” the chain tweeted.

PVR’s revenues for Q1 of FY21 declined by 99.5% year on year to ₹4.3 crore (against ₹880 crore in Q1FY20) as cinemas remained closed across India for the duration of the quarter. The company aims to achieve break-even at 18%-20% of occupancy levels, as compared to its pre-Covid occupancy levels of 23%-25%. According to Motilal Oswal, PVR’s near-term profitability and business scale would be affected as cinemas would be the last to open and would operate with a much-reduced capacity and limited timings. “Rental waivers come as a great relief for the company; however, other operational charges, such as sanitisation costs, would increase post the reopening of the cinemas, along with an expected decline in revenues in the high-margin F&B category,” it said.

“The recent shift in movies to OTT platforms and increased viewership raises concerns regarding increased competition from the OTT medium. However, once the multiplexes resume operations, a fixed exclusive window of movie viewing in cinemas and healthy flow of movie content, coupled with PVR’s scale and execution, should bode well for the company,” Motilal Oswal said in a statement.

Other multiplex operators, too, are equally affected by the lockdown. “Millions work behind the scenes, to make dreams come to life on the big screen. Their jobs are at stake. Please reopen cinemas immediately,” INOX Leisure Ltd tweeted. Movie operators are likely to offer discounts of up to 15%-30% on tickets.

Karan Taurani, vice president, Elara Capital, said, “Delay in opening of cinemas will be a double whammy and negatively impact overall mall footfall and food court (dine in) footfall. Cinemas will take the longest amount of time to recover in terms of footfall due to a phased opening across states and also shortfall of content in some of the weeks.”

According to Elara Capital, almost 40% of the cinema audience is made up of families (with children) and elders (in the age group of 55 and above) who won’t venture out to watch films now, which will hamper occupancy recovery of cinemas over the next six months at least. “The situation only looks troublesome now given the steep rise in cases in tier 1 markets which may delay the recovery path. As per our channel checks with various developers, footfall in the tier 1 markets are at a mere 30%-35% of pre-Covid levels, whereas in the tier 2 and tier 3 markets, it has recovered sharply to 60% of pre-Covid levels; the festive season in coming months may see a slight upward recovery. However, opening of cinemas will be very important in order to revive footfall towards 70%-80% levels in the tier-1 markets,” Taurani said.

In more than 84 countries, including China, Korea, the U.K., France, Italy, Spain, the U.A.E., and the U.S., cinemas have already been opened to the public. With a rising number of cases daily, especially in states like Maharashtra which contributes almost 30% of the box office for Hindi/Hollywood films, it is unlikely that theatres will operate in full force. The industry might have to stare at a dry festive season if theatres remain shut in October.