The pandemic and consequent lockdown has brought the life of cinemas to a standstill. Everybody is wondering when will the theatres reopen and also, the worst hit due to the lockdown are the theatres. But the big question is- what will be the business perspective and difficulties that the cinemas will have to face once they reopen? Industry’s film trade expert Komal Nahta presents an analysis and explains it all.
Even within the industry, it is the exhibition sector which is bearing the maximum brunt of the losses which the film industry has been subjected to. With not a single cinema open, the losses to the exhibition trade is cent per cent. In recent developments, Producers have at least been allowed to resume shootings (under controlled conditions), and carry on post-production activities to the fullest, but the box-office windows of theatres across the nation are shut. Much before the government announced the resumption of production activities, producers were also able to liquidate their investments in completed films by selling their premiere rights to OTT platforms. This is not to say that producers have had it easy. They’ve also borne a good part of the brunt of the lockdown despite shootings having been permitted since two months.
Komal shares, “Their interest meter has been ticking with no revenues in sight, other than the streaming prices in the case of the 18-20 films sold for premiering on OTT platforms. Delays in shootings, and staff salaries are only two of the other problems producers have had to live with through the lockdown. And when two sectors — production and exhibition — have suffered heavy losses, their interaction cannot be smooth when they finally decide to interact — in this case, when cinemas will be permitted to reopen and, therefore, producers will be free to release their films theatrically. Each sector will emphasis on the losses it has suffered and the sacrifices it had to make during the lockdown.”
He further adds, “They would have to face a shortage of playing programmes when they are asked to reopen, because a lot of films have already been premiered or have been committed for premieres on streaming platforms. Also, the flow of the public to the cinemas cannot be estimated. It is anybody’s guess that people won’t be in a hurry to visit the cinemas for fear that they may contract the coronavirus despite the best sanitation. In view of this, some cinemas may actually realise that their losses would be higher after they reopen than while they were shut because post-reopening, they would be incurring variable costs too, besides fixed costs which have to be incurred irrespective of whether cinemas are operational or closed. But that’s not all. There may be tension brewing between multiplexes and producers although nobody wants to talk about it at this stage because the tension of the lockdown is aready bogging down the industry like never before.”
Talking about the producers and their interests that have a share, Nahta says, “Producers, especially those who have stood in solidarity with the cinemas and refrained from opting for the streaming platforms for premiering their films, may ask the multiplexes and single-screen cinemas to give them a higher percentage as their share of the box-office collections (revenue pie). Instead of the present, say, 50% or 52.5% of the net collections in the first week, producers might expect multiplexes to part with, say, 60 or 65%. Likewise, for the subsequent weeks. Ditto for the sharing terms vis-à-vis single-screen cinemas.”
Producers may also be eyeing a percentage of those sales because, as one producer, wishing to remain anonymous, said, “The sale of eatables and drinks is directly proportional to the sale of movie tickets. If our film attracts more footfalls, sale of concessionaires in the interval or at the start of the movie is much more. Shouldn’t we be now getting a share of that revenue too?”
Producers would expect the multiplexes to compensate them for having waited for cinemas to reopen by allowing them to stream/telecast their film in, say, four or six weeks instead of eight weeks from the day of theatrical release.
Concluding, Nahta shares, “It shouldn’t be a surprise if producers even demand a simultaneous release in cinemas and OTT platforms (pay per view) for their films. Desperate times call for desperate measures.”
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