Cinema, cinema halls at crossroads
Struggling to get back on their feet, cinemas are now reviewing their costs. For instance, the country’s largest chain PVR- INOX Ltd plans to shut down nearly 50 cinema screens in the next six months. Mukta Arts is also in the process of closing 11 of the 65 screens they operate, Puri told Hindustan Times
Actor, writer, producer Viveck Vaswani made a couple of notable points on Twitter recently. “Dear Cinemas, you can’t make films. But you can make them affordable…” he tweeted before pointing out that several theatres in Mumbai like Gaiety and Galaxy sell tickets at a starting price of ₹80 and popcorn at ₹50 because they are not about “optics” and “share” prices, but about cinema. They offer these prices, he said, since they’re not paying “ ₹65 lac” a month in rent to some mall
Vaswani’s comments underline the big challenge Indian cinemas are facing today in pulling audiences to theatres. That the current content is not working for theatre goers is well-known. Audience palates have changed with exposure to international content on OTT and the experience of binge-watching at home. “High ticket prices of multiplexes are not helping either,” said Rahul Puri, managing director at Mukta Arts, which owns Mukta A2 Cinemas.
Struggling to get back on their feet, cinemas are now reviewing their costs. For instance, the country’s largest chain PVR- INOX Ltd plans to shut down nearly 50 cinema screens in the next six months. Mukta Arts is also in the process of closing 11 of the 65 screens they operate, Puri told Hindustan Times. “It’s the reality of where the industry is. Multiplexes are shedding some of their less profitable screens. Cost cutting and strategic realignment is certainly on,” he said.
Theatre woes are not limited to multiplexes alone. Nearly 1,000 single-screen cinemas shut down during Covid as their owners did not have the deep pockets to survive prolonged closure.
This strain on cinemas is especially stark in the Hindi belt where Bollywood films are not working. Industrywide, admissions are down by 30% in 2022-2023 compared to 2019-2020 (pre-pandemic). Shah Rukh Khan’s Pathaan was a hit, but that was in January. Tu Jhooti Main Makkaar and The Kerala Story have seen some semblance of success but, by and large, the mismatch between films and viewers’ expectation is huge, Puri said.
However, theatres rely 40% on the quality of content and 60% on the quantum of content, explained Abhishek Sharma, director, retail, at real estate consultancy Knight Frank. Amit Sharma, managing director, entertainment, at Miraj Cinemas, agreed. Both Bollywood and Hollywood studios held back their films and tweaked them to appeal to changed tastes of their audience. “From June onwards, theatres will have a robust pipeline of content that may help drive footfalls,” he said. Among expected releases are Hindi films like Adipurush, Maidan, Satyaprem Ki Katha, Animal and Gadar 2. Hollywood fare includes Transformer: Rise of the Beasts, The Flash and Mission Impossible: Dead Reckoning Part One, among others.
“Theatres were overlooking a lot of costs when business was good. We paid huge rents to developers. Those are being rationalised in the new properties that we sign on,” said Sharma of Miraj that operates 180 screens in the country and expects to touch 250 by March 2024.
Knight Frank’s Sharma agreed that new deals are being done at lower revenue share – without rentals or minimum guarantees – at least in Category B malls in tier 2 towns. However, Category A or prime mall locations in the big cities still command minimum guarantees, he said.
Today, multiplex chains are sharply focused on under-served markets rather than adding screens in markets that are saturated, said Anarock Retail’s joint managing director Pankaj Renjhen. For instance, Miraj is opening screens in Chennai, Vizag, Jamshedpur, Sitapur, Indore, Amravati, and Agra.
Besides, the days of 24-screen superplexes are over. “The size and the format of cinemas will change to the extent that we are unlikely to see more of those big 10 screen theatres. I think the ideal format will remain between four to six screens or three to five screens for optimized operations and viability,” Renjhen said.
Going forward, theatres need to re-examine their target audience for individual properties and price tickets and food and beverages in line with that clientele. “The traditional multiplex model will continue to work. Of course, content needs to align itself with the audiences but theatres will not be able to charge customers in excess of what they are willing to pay,” Puri of Mukta Arts said.
Renjhen thinks future of film theatres is safe. “Indians like passive entertainment like watching movies or sports versus active entertainment. So, film theatres will continue to dominate.”