- Due to inflation, cinemas at all levels have increased their prices for movie tickets and food and drink by 5-20%.
- However, their sales remain unchanged so far.
- After almost two years of drought, multiplexes and single screens are enjoying a strong recovery in 2022.
- Despite pricey tickets, consumer sentiment remains high as they flock to watch big-ticket movies on the big screen with loved ones.
The Indian film industry has suffered a severe drought due to the Covid-19 pandemic. Several pandemic-induced nationwide lockdowns have forced cinemas to close completely for more than 18 months, leading to a significant drop in revenue.
However, after opening their doors to viewers in the second half of 2021, cinemas this month returned to the pre-pandemic level of collections.
Inox Leisure Programming Director, Rajender Singh Jyala said, “The past three months have been good for us. On average, we take in more than ₹1,000-1,500 crore every month.
Sharing which movies got the ball rolling in the multiplex chain this year, Jyala added, “RRR movies and Gangubai Kathiawadi pushed the recovery. Before that, Kashmir Files and now with Bhool Bhulaiya 2, our domestic attendance and ticket sales are at pre-pandemic levels or even better.
With highly anticipated Bollywood films such as Prithviraj, Brahmastra and Lal Singh Chaddha set to release in the next three to four months, Jyala is optimistic that the momentum will continue this year.
With its current progression, 2022 could prove to be a golden year for the cinema industry, driven by local content.
Partner of media consultancy Ormax Media, Gautam Jain, said: “The overall national market
“Given this growth trajectory and looking at the range of films slated for release this year, a box office gross collection of ₹12,000 crore seems possible, which would make this year the highest ever in gross box office terms. [collection]“, he further added.
While INOX has returned to pre-pandemic levels on all measures, Ormax Jain said overall cinema industry attendance and ticket sales are still below pre-pandemic levels.
Explaining why box office gross is higher than 2019 as attendance continues to be weak, Jain said: “Box office gross is higher because ticket prices are 15% higher. at 30% in all languages. Ticket prices have increased even in southern markets.
Moviegoers ignore soaring inflation, cinemas remain unchanged
While the movie industry cleared the first major hurdle COVID-19 threw its way, it faced another challenge this month: soaring inflation.
The rise in inflation affected all industries. The Fast Moving Consumer Goods (FMCG) industry has resorted to raising product prices and shrinking products in its portfolio. Cinemas have also increased their movie ticket and food and beverage (F&B) prices by 5-20% in different parts of the country.
However, audiences returning to the big screen, after being deprived of the theatrical experience for nearly two years, seem indifferent to the rising prices.
“Rising movie and restaurant ticket prices online to cover inflation seems reasonable. Average ticket prices have increased by around 8-10% and more than 15% in some states and cities. At the same time, F&B prices increased by 5-10%. Rising prices seem to be ignored by customers as occupancy levels (irrespective of prices) and F&B spending increased over the period,” said Chandrashekhar Mantha, partner at consultancy and advisory firm Deloitte India.
He calls this quarter’s steady recovery the result of a “revenge consumption trend,” in which consumers try to catch up on everything they’ve missed over the past two years. The film industry’s strong content pipeline has also struck a chord with audiences, pushing the recovery even further.
The INOX multiplex chain also did not feel the impact of inflation. Although it has increased its cinema and restaurant ticket prices by 5 to 10% on its 675 screens, its sales and attendance continue to increase.
“The increase is not to that level where consumers can feel the pinch in their pockets. It’s between 5-10%. In fact, the F&B spend and ticket sales we’re seeing are above the level from before the pandemic,” Jyala told Business Insider India.
On the other hand, Jain of Ormax Media said that low budget movies are feeling the impact of inflation and moviegoers choose to watch only big ticket movies that seem worth their money.
“Audiences choose to watch films that provide a theatrical experience on the big screen such as RRR or KGF Chapter 2 or spectacle films like Doctor Strange or Spider-Man or a collective experience Bhool Bhulaiya 2 or Saunkan Saunkne. Movies that didn’t offer that failed to attract audiences – for example Jayeshbhai Jordaar or Jersey,” Jain said.
“Besides ticket prices, since audiences are now aware of possible OTT premieres and are exposed to OTT viewing, any film that does not meet the above criteria also did not get an opening weekend. decent,” he said.
However, it is too early to tell. Bollywood films such as Jayeshbhai Jordaar or Jersey also failed to gain traction as they failed to leave a good impression on critics.
Regional films get ahead
Regional films like KGF 2.0, RRR and Pushpa have brought in record box office receipts, surpassing Hindi films like Jayeshbhai Jordaar and Bhool Bhulaiyaa 2 so far.
KGF 2.0 broke through the revenue market of ₹800 crore in terms of net box office collection, which was slightly higher than RRR at ₹720 crore, analyst and financial firm Elara Capital has revealed.
Low and mid-budget films in regional markets earned a net box office collection of ₹50–55 crore each. On the other hand, recently released Hindi films were unable to cross the ₹25-30 crore mark, which is 50% less target than the region.
“The easing of the average ticket price (ATP) cap in the Andhra Pradesh and Telangana markets is one of the reasons why regional content fetches higher box office collections. The next big regional movie release scheduled for June 3 – Vikram, could collect 150-175 crore net in terms of lifetime box office collection,” said Karan Taurani, Senior VP – Research Analyst, Elara Capital .
A bright year ahead
The rest of the year will see major releases such as Akshay Kumar’s Prithiviraj, Aamir Khan’s Laal Singh Chaddha, Varun Dhawan’s Jug Jug Jiyo, Ayushman Khurana’s Doctor G and Anek.
In regional markets, Rana Dugabatti’s Virata Parvam, Rocketry: The Nambi Effect of R. Madhavan, Agent of Mamotty, Ravansura of Ravi Teja, the star-studded Vikram, are lined up for the second half of 2022. Hollywood releases will further bolster this pipeline. .
So, the coming year promises to be bright for the movie theater industry. Analysts and cinema operators are confident that the growth momentum will continue over the next half year.