The show is on again for Indiaʼs cinema industry

The government seems to have finally heeded the call of cinema operators. In a major relief for the entertainment industry, the Union home ministry has permitted movie theatres to reopen. According to the ministry’s new Unlock 5.0 guidelines, cinemas located outside containment zones can operate with 50% occupancy from October 15. Theatres are one of the last ones to open after being shut for more than six months in the wake of the ongoing Covid-19 pandemic. A fresh standard operating procedure (SOP) will be issued by the ministry of information and broadcasting, and all multiplexes and single-screen operators will be required to adhere to it.

The onus has now shifted essentially to the states and it is they who will decide exactly when cinemas should open. Keeping an eye on the soaring Covid-19 cases in the region, Maharashtra, for instance, has decided to keep cinema halls closed for another month. West Bengal, on the other hand, has announced that movie theatres will begin functioning from October 1.

The Multiplex Association of India (MAI), a national multiplex trade body representing more than 18 regional and national multiplex chains, had repeatedly appealed to the government to allow theatres to reopen “on an urgent basis”. The body argued that the movie exhibition sector provides employment to lakhs of people and the closures had brought an estimated loss of ₹9,000 crore in the past six months.

“Millions of movie lovers, employees of the cinema exhibition sector, along with the entire film industry were eagerly awaiting this announcement. We are committed to ensure a safe, secure, and a hygienic cinema-going experience for the movie lovers of our country. As always, we would continue to assign topmost priority to the health and well-being of our guests and employees,” the MAI said in a statement.

The body—representing around 90% of the multiplex industry in India, which operates more than 600 multiplexes—said that they were prepared to welcome back moviegoers to a safe environment and appealed to the states to permit theatres to run. “An urgent permission from the state governments to reopen cinemas in their states would go a substantial distance in ensuring that the cinema exhibition sector is able to quickly recover from the dire economic and financial impact of the epidemic,” the MAI said.

Although, the theatre owners have assured that they would follow social distancing and other measures in line with the SOPs, it needs to be seen how easily people step out for a movie, especially considering the fact that India's Covid-19 tally breached the 6.3-million mark, with 86,821 new cases and 1,181 deaths reported in the last 24 hours.

Apart from the ongoing pandemic, cinemas also face a huge existential threat from OTT platforms which fulfils people’s entertainment needs from the comfort of their homes. Moreover, the pandemic has proved somewhat of a boon to the OTTs. A recent survey by social network platform FLYX revealed that as Covid-19 raged on, OTTs in India ended up witnessing a major uptick in subscriptions and viewing hours.

Another major point of worry for theatres is that their second-biggest revenue stream—the food and beverages industry—is touted to take a hit and is expected to take longer to recover.

“Cinemas coming back to pre-Covid-19 levels will only depend on how risks pan out,” said Karan Taurani, vice president at Elara Capital. He said that major risks still persist for cinemas, such as lower window period for OTTs. Lower window risks essentially are geared to help movie producers gain more money via digital and satellite rights in order to offset the loss incurred due to lower collections from cinema halls during Covid-19.

“These are going to be compensatory measures which producers will ask for before releasing the film as they have waited so long for a release and as pre-Covid box office collection will take slightly longer to come back given that the elderly/children and family crowds not venturing into cinemas for the initial three-six months at least,” Taurani said.

Taurani doesn’t expect any large-scale content or a big Hindi film to hit cinemas before December. He said it was highly likely that “Hollywood releases will test waters around November and only if Maharashtra opens up, whereas films like Sooryavanshi or 83 will move to Christmas and beyond”.