Bollywood’s flops now pose a big risk to multiplex chains

• Both PVR and INOX reported their best ever quarterly performance in the June quarter of the current fiscal year.
• The duo need a few big Bollywood films to keep audience from coming in, if they want to maintain their growth.
• Most big budget Bollywood movies over the past few months have been duds at the boxoffice.

Shamshera, Samraat Prithviraj and Jayeshbhai Jordaar have something in common. They aren’t just the latest Bollywood movies that couldn't bring Indians back to theatres — they’re also three successive releases of A-listers that have flopped.

This lack of enthusiasm for Bollywood is not just affecting the actors and producers but also movie theatres which are banking on superhits to get back in the black – after a long period of pandemic-induced shutdown.

Brokerage firms are worried that more Bollywood releases might not enthuse the OTT-saturated public to go to the theatres. It will affect footfalls, and have a cascading effect on ad revenues, the theatre chains’ ability to go in for price hikes and more.

Several analysts quizzed Inox’s director Siddharth Jain about the same during the quarterly earnings conference call. Jain emphasised multiple times that bad movies would not have an impact on the footfall for its business.

“Q1 [April to June] has been great but after that few movies have not done well. That does not mean that people will shy away from coming to the theatres… One or two movies not working, or one month not doing well, does not mean that people will refrain from coming to the theatre to watch a movie or the entire pipeline is bad,” he said.

Yet, analysts are not mollified. They do not believe that the audience is ready to go back to watch ‘average movies’, especially since they’re spoilt for choice by multiple OTT options, in addition to traditional TV.

When big movies flop, theatres lose as much as producers. “The most prioritized goal for multiplexes like PVR and INOX is to fill the theatre with audiences to maximise their profit. But flop movies fail them to accomplish this goal. Being the distributor, they face no less amount of loss than the producers,” Manoj Dalmia, founder and director of Proficient Equities Private, told Business Insider India.

Lockdown boredom plus content equals footfalls

PVR’s CEO Kamal Gianchandani, in the company’s post-earnings analyst call held on July 25, however said he believed that their first-quarter performance was a combination of people bored of lockdown ‘going out’ as well as content.

He emphasised that the quality of movies that came out between April and June was “exceptional” and that had a big role to play in people’s enthusiasm for watching movies in theatres. “The consumer appeal for movie theatres is very much intact and it’s also the quality of content,” he noted.

The theatres did a stellar March business thanks to South hits like KGF and RRR in addition to Kashmir Files and Gangubai Kathiawadi. In spite of the sales, the two listed movie chains — Inox and PVR both posted net losses for the first quarter of ₹239 crore and ₹478 crore in the fourth quarter, respectively.

They’re still on the road to recovery and for that, they need more ‘recovery worthy movies’, and that can only come from Bollywood. According to analysts, while South movies helped in the past, only big Bollywood movies that are released across multiple screens can bring them the recovery that they need.
Source: Bollywood Hungama, Media Reports

Time for Bollywood to step up

Both the companies have been pinning their hopes on movies like Laal Singh Chaddha, Raksha Bandhan, Liger, Brahmastra and Vikram Vedha to help maintain footfalls in the ongoing July-September quarter.

“The movies are looking good in August, and in September we also have some great movies lined up. And I am very hopeful that these movies will be treated well at the boxoffice,” Inox’s Jain noted.

Aamir Khan’s Laal Singh Chaddha has already started to draw some criticism for various reasons. Meanwhile, calls to boycott Akshay Kumar-starrer Raksha Bandhan were also made on Twitter earlier on August 4.

Going by the trend, many big releases across multiple screens and languages have flopped badly in the last six months – be it Kangana Ranaut’s Dhaakad, Akshay Kumar’s Bachchan Pandey or Prabhas’ Radhe Shyam. Ranveer Singh’s 83 did average business, while Puspa released along with it, was the lone outlier that was a superhit.

As per PVR’s own admission, in spite of high expectations of blockbuster performance from movies in the pipeline, they do not expect a full recovery for another six months.

“Our sense is, by December of this year, where we have had a big run of films, effectively recovery should take shape fully because you must also understand that in a country like India, there is a very large segment of people who show up at the theatres only once or twice a year,” Nitin Sood, CFO of PVR, said.

This whole struggle is inextricably tied to already low ad revenue, which is a big part of revenue for any multiplex business. Both PVR and INOX, despite a strong movie pipeline in Q1, have not yet reached their pre-Covid ad revenue figures. Reaching there will depend on good content.

“Good content is very important for a client, because he knows that content will have footfall and there will be more people seeing his ads. There will be more eyeballs watching his ads,” Jain added.

Till the movies release, it will be a wait-and-watch game to see if Bollywood delivers the blockbusters that the theatres desperately need.

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