Why multiplexes are exploring newer revenue options

NARAYANAN V Chennai | Updated on August 19, 2021

While the pandemic has crippled the box office, it has also given film exhibitors, especially the multiplex operators, an opportunity to reinvent themselves

Film exhibition business is one of the earliest and the hardest to be hit by the global pandemic. From prolonged theatre shutdowns to drop in audience footfalls and losing contents to OTT platforms, film exhibitors faced several challenges that impacted both their business and revenue in the last year-and-a-half.

According to a FICCI-EY report, the filmed entertainment segment saw an 80 per cent decline across domestic and international theatrical revenues as the country saw only 441 theatrical releases in the pandemic-hit 2020 as compared to 1,833 releases in 2019.

New chance

But the pandemic also gave film exhibitors, especially the multiplex operators, an opportunity to reinvent themselves. From providing home & office sanitisation services to foraying into e-commerce space, film exhibitors have diversified their revenue sources by taking their best-in-class offerings beyond the movie halls.

Take PVR Cinemas, for instance. The India’s largest multiplex operator recently forayed into the e-commerce segment with the launch ‘PVR PopMagic’ – a range of microwave popcorn curated by celebrity chef Sarah Todd. The company said it will introduce more products in the ‘Ready-to-Eat’ and ‘Do-it-Yourself’ category in the coming months across multiple e-commerce platforms.

FILE PHOTO: COVID-19 precautionary measures at PVR Cinemas in Brookefields mall. PHOTO: S. Siva Saravanan / The Hindu.   -  The Hindu

PVR’s plan to grow its food & beverages (F&B) portfolio beyond cinemas is not surprising. F&B is the second-highest revenue source for PVR (after ticket sales) accounting for over a quarter of its total revenue. In Q4 FY20, F&B revenue of PVR stood at ₹175 crore, which fell to mere ₹18 crore in Q1 FY22 as theatres in many parts of the country remained shut during the period.

“We have already mapped out most of our cinemas in the north and in the south. The west region will start in about a week to 10 days’ time once the cinemas open and stabilise. In all, we will have close to about 90 odd cinemas delivering food outside. We’ve also sealed a document with Zomato on our contract on home delivery,” Gautam Datta, CEO, PVR Limited said in the Q1 FY22 earnings call.

Besides, PVR has also introduced professional sanitisation and deep cleaning services for home and office spaces under the brand ‘V Pristine by PVR’.

Offering different services

Inox Leisure, the second-largest chain in India, has also set a new F&B roadmap which includes making their food available on online food ordering platforms like Swiggy and Zomato.

“INOX aims to tap a new consumer base that buys food products even when they are not watching a movie. INOX looks to include meal options like Pulao, Biryani, Dal Makhani, the much-loved servings of Rajma-rice & Chana-rice, Pastas, Garlic Bread and Chilli Cheese Toasts,” the company said.

Not just multiplexes, companies allied to the film exhibition business also felt the need to diversify their revenue sources rather than depending only on in-cinema revenues.

“The pandemic made us realise that we were dependent on a single business that is cinema, which no one ever thought would face a prolonged closure bringing revenue to near zero. Therefore, we worked towards ring-fencing the company through diversification into non- cinema related businesses and set our eyes on social media and digital,” Kapil Agarwal, Joint Managing Director, UFO Moviez India Limited said in Q4 & FY21 earnings conference call.

The India’s largest digital cinema distribution network and in-cinema advertising platform has signed an agreement with Collective artist’s (a leading talent management agency) to provide social media marketing services. It also ventured into B2C digital space by launching two initiatives – Zinglin (a short video content app) and Plexigo (a premium content discovery OTT platform).

Published on August 19, 2021

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