Although cinema theatres are set to resume operations this week, the sector’s road to recovery seems daunting given the divided opening and restriction on seating capacities. While states such as Maharashtra, Tamil Nadu, Telangana and Kerala, that drive considerable sales are yet to give exhibitors the green signal, they are expected to allow theatre screenings very soon.
Nonetheless, with six months of the year gone, multiplexes are expected to incur Ebitda (earnings before interest, tax, depreciation and amortisation) losses in the current financial year according to an estimate by Crisil Ratings.
That compares with average operating profit of 17-19% seen through fiscals 2018-2020. Ticket sales that generate around two-thirds of exhibitors’ total revenues are likely to see a decline of nearly 55%, analysts at the ratings agency said in June. PVR recorded consolidated net losses of Rs 226 crore in the April-June quarter against profits of Rs 18 crore reported in the year-ago period.
Sanjeev Kumar Bijli, joint managing director at PVR told FE that he expects cinema theatres will open pan-India by the first week of November.
Although a mix of Hindi, regional and international movies are in store to keep the show running, big releases will be critical to get businesses back on track, Bijli said.
Exhibitors are betting on a December release for Akshay Kumar-starrer Sooryavanshi, a tent-pole property for its producer, expected to be screened at the theatres. “We do have a lot of fresh content for which customers would be willing to come back to the cinemas,” Bijli said.
PVR is opening 496 screens across 10 states and four union territories starting October 15.
During the lockdown period, producers have courted over- the-top (OTT) companies, releasing a slew of movies across platforms. The bulk of the direct to digital movies has been acquired by Netflix, Amazon Prime Video and Disney+Hotstar. Recently, Amazon Prime Video announced the acquisition of nine new films across five languages that include Hindi movies Coolie No.1, Chhalaang and Durgavati.
Bijli, however, ruled out the possibility of theatres screening the OTT releases in the interim given that movies have a “shelf life” and the appetite to consume such movies would be tepid.
Bijli expects the exhibition business to reach pre-Covid levels by March-April next year if the country is spared a second wave of infections.