New Covid-19 cases in India may well affect box office collections, though the impact of the virus on the Indian film business has been minimal till now.
The first quarter of FY21 may see many films being deferred if things get worse, according to a report by brokerage firm Elara Securities Pvt. Ltd. This could result in a downgrade of 12-14% in earnings before interest, tax, depreciation and amortization for multiplex chains such as PVR Cinemas and INOX Leisure Ltd.
Bollywood, which contributes 65% of the total revenue of these chains, has major offerings lined up from April, including director Kabir Khan’s sports drama ’83, Amitabh Bachchan and Ayushmann Khurrana-starrer Gulabo Sitabo, Salman Khan’s action drama Radhe—Your Most Wanted Bhai, Akshay Kumar-starrer Laxmmi Bomb, Yash Raj Film’s Bunty Aur Babli 2 and Kangana Ranaut-starrer Thalaivi, a biopic on actor-politician Jayalalithaa.
“Some of the large releases may also be postponed in case cinemas call for a closure in the coming months. We will monitor the number of new cases closely to ascertain the exact impact on footfall in cinemas," said Karan Taurani, research analyst with Elara.
The virus has already had an effect elsewhere. In China, some 70,000 theatres have been shut, and the lunar year weekend grossed about $2 million against $360 million last year, a Quartz report said.
Box office collections in Italy were down 25% year-on-year (y-o-y) in February. Overall, March could see a decline of over 50% y-o-y in the country that has reported over 1,600 confirmed cases.
Movie releases in Japan have been put off as most cinema chains have sought a temporary closure. In Korea, ticket sales fell almost 65% over the past weekend compared with two weeks earlier
Bollywood is already on track to one of its worst quarters. January and February together saw a adrop of 11% y-o-y with underperformers including titles like Chhapaak ( ₹34.08 crore), Street Dancer ( ₹68.28 crore), Panga ( ₹28.92 crore) and Love Aaj Kal ( ₹34.80 crore).
While cinema chains actually shutting operations would depend on the gravity of the situation, the idea that people would be fearful of stepping out and of large crowds is not too far-fetched. “Of course the safety of movie viewers is of utmost importance and there are countries that have already brought in restrictions but the call in India would depend on government directives," said film trade and exhibition expert Girish Johar.
Only time would tell how theatre owners respond to the crisis, if there is one, said Rajendar Singh, vice-president, programming and distribution, INOX Leisure.
