Multiplex players hope to get back to pre-Covid revenue levels this year

After facing massive headwinds due to the pandemic, the multiplex industry is hoping to get back to pre-Covid level revenues in 2021 with expectations of a stronger line-up of movies.

At the same time, with India emerging the fastest growing OTT market, video-on-demand streaming services are gearing up to leverage on the acceleration of adoption of digital services to make bigger gains in terms of subscriber base and revenues.

Multiplex chains are banking on movies such as Sooryavanshi, 83, Bell Bottom, Pathan, Radhe, Laal Singh Chaddha, Jayesh Bhai Jordaar , besides key regional movies such as Master and KGF Chapter 2 to resurrect box-office revenues.

Some of the key Hollywood titles such as No Time to Die, Black Widow, Top Gun: Maverick and Batman are also slated for a release this year.

‘Focus on safety’

Alok Tandon, CEO, Inox Leisure Ltd, believes 2021 will be the year of cinema entertainment with a full-bodied movie line-up across genres.

“For us, as a sector, 2021 is going to be all about exhibiting how much we care about guest safety, in order to win their faith and trust. 2021 will continue to see a heightened focus on safety and hygiene. We also believe we can hasten our revival with some path-breaking innovations revolving around the big screen, like private screenings, alternate content screening, unique brand collaborations, introduction of new F&B concepts etc,” he added.

Multiplex chains also believe that revision or removal of 50 per cent occupancy caps by authorities will enable the sector to accelerate recovery trends in the coming months.

Kunal Sawhney, Senior Vice-President-Operations, Carnival Cinemas, said, “We have seen growth in admits week-on-week basis. 2021 lineup of Hindi, regional and international titles looks very promising. We expect more movies getting slated for release once the 50 per cent occupancy norm gets removed across key States.”

Experts believe while multiplex chains may see accelerated recovery trends this year but given the dynamic nature of the pandemic it remains to be seen by when they will touch the pre-pandemic revenue levels after witnessing significant contraction in revenues in 2020.

New strategies

Pointing out to the global announcement by Warner Brothers to release its 2021-movie slate simultaneously in theatres and on HBO Max, Jehil Thakkar, Partner, Deloitte India said, many long-held practices and models will be re-looked by film makers given the dynamic nature of the pandemic and accelerated adoption of OTT platforms.

According to PwC’s Global Entertainment & Media Outlook 2020-2024, India is expected to become the sixth largest OTT market in 2024, growing at a CAGR of 28.6 per cent. This growth is also being fuelled by value-conscious Indian consumers’ willingness to pay for video-on-demand services.

“Subscription video-on-demand (SVOD) will be the prime driver of revenue, increasing at a 30.7 per cent CAGR from $708 million in 2019 to $2.7billion in 2024,” the PwC report added.

Rohit Jain, Managing Director, South Asia and Networks - Emerging Markets Asia at Lionsgate, said, “2020 was a breakthrough year for the OTT industry marking the rise of SVOD at a 55-60 per cent growth rate in the Indian market due to the pandemic.

At Lionsgate Play, we are a pure play subscription service and are making the right investments in originals as well as acquired content and expect SVOD’s share to increase in the total OTT revenues.”

“Until 2019, OTT consumption was largely a metro phenomenon but that changed in 2020. Smaller towns and cities are accepting technology and are driving demand for OTT services,” Jain added.

According to a report by Boston Consulting Group and CII, the “growth rate of new users for OTT services in tier-2/3/4 regions was 1.5x that of the growth rate in Metro & Tier 1 markets” during 2020.

Subscription growth

A spokesperson for Amazon Prime Video said the company witnessed a significant growth in absolute viewing hours by Prime members, as well as a surge in first-time viewership.

“The growth of subscription video streaming services in India will continue to accelerate rapidly, backed by continued focus on high quality, cinematic value, local original content, increasing disposable incomes and growing base of discerning customers, desiring more personalised and world class experiences and aided by the constantly improving and evolving digital payments infrastructure in the country,” the company added.

Karan Bedi, CEO, MX Player, said that with the increase in engagements and time spent on OTT platforms, monetisation opportunities are also scaling up, with more and more advertisers turning to AVOD services to reach out to consumers.

He said with a large chunk of of consumers still exploring new avenues for content consumption, there is a huge headroom for growth for AVOD services.

Meanwhile, the regulatory framework is also evolving in India for OTT players. With the government bringing content on digital media and OTT platforms under the purview of the I&B Ministry, the Ministry is now pushing the industry players to ensure a credible and robust mechanism of self-regulation is rolled out to ensure age gating to protect children from inappropriate content.

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