SCREENXX 2020: Identifying green shoots for cinema exhibition post-COVID
The Ministry of Home Affairs announced the Unlock 5.0 guidelines, which came to effect on October 1. According to the guidelines, cinema (theatres and multiplexes) will be permitted to open from October 15. Cinemas will be open across India after being shut for more than six months.
What’s the situation right now? According to Karan Taurani, Vice President (Research Analyst), Media and Consumer Discretionary, Elara Capital, “Globally and in India, the box office had to face immense losses. Had COVID not hit us, today in terms of Hindi box office collections we would have surpassed all records. We were poised to reach box office collections of Rs 4,000 crore. Instead, we have gone seven months with no revenue from the cinema exhibition industry.”
At the same time, a lot of things have changed in favour of exhibitors, remarks Taurani. “Producers have resumed shooting of their films and big-name actors like Akshay Kumar and Aamir Khan have moved abroad for shoots. A lot of large studios have announced they will start shooting in November-December.”
Adding further, he said, “The larger exhibition chains such as PVR and INOX have successfully raised capital for the cash burn in the last six months because occupancy has been low. A lot of mall developers have agreed to move to a revenue sharing basis, because mall footfall will definitely not come until the cinemas have opened up. There have been multiple green shoots for the cinema industry in the last six months.”
Sharing the example of Christopher Nolan’s ‘Tenet’, he said, “‘Tenet’ opened in select markets and brought in box office collections of $54 million, which was a big surprise during COVID. Estimates around the world predicted that ‘Tenet’ could reach $450 million in collections, but that didn’t work and they’ve faltered. The film has not picked up in the US and China, too, has been very dismal. I don’t think ‘Tenet’ will hit more than $300 million in collections.”
He said, “Coming to India, the Indian exhibition chains have suffered Rs 1,000 crore in losses. Almost 22 Hindi films and 5-7 regional films have released direct-to-OTT. If these films were released in theatres, the box office collections would be around Rs 1,200 crore.”
He surmises, “There are various challenges as we go ahead into how things will recover. The occupancy capacity will be revised. There are vulnerable audiences who are 55+ and kids, who may not travel to the cinemas in the initial 3-5 months. There may be a change in terms between the producer and the exhibitor as films released in theatres today will not have the collections that they would during the pre-COVID times. Producers may ask for some kind of compensatory measure, distributor share or lowering of the OTT window. Single screen shutdown may intensify from year end.”
To understand the overarching trends in cinema exhibition and OTT, he was joined by an expert panel of speakers to discuss the topic ‘Cinema vs OTT: The Future of Entertainment’ at SCREENXX 2020 Summit | Awards.
- Amit Sharma, Managing Director - Entertainment, Miraj Group
- Shailesh Kapoor, Founder & CEO, Ormax Media
- Shariq Patel, CEO, Essel Vision Productions
Watch the entire conversation below starting from 22.40: