Experts say some cinema chains have delayed expansion plans by two or three quarters. Limited cash flows will make opening of new properties impossible
NEW DELHI : The closure of cinema halls, and suspension of film production and releases have put India’s multiplex industry under severe stress, delaying its expansion.
Exhibition industry experts said some chains have delayed plans by two or three quarters. Deliveries of equipment are stuck in transit and immediate financial restructuring is required. Exhibition companies have already made requests to waive mall rentals.
“The coronavirus has not just knocked down the entertainment industry in India but affected the entire world economy. Our expansion targets have moved ahead to at least two to three quarters because of the total lockdown in India and abroad. All our new orders, including projectors and other hardware, are stuck in transit," said P.V. Sunil, managing director, Carnival Cinemas, adding that the company needs to shuffle its finance structuring also.
According to the Ficci-EY media and entertainment industry report 2020, India’s multiplex count stood at 3,200 in 2019. PVR, with 812 screens, INOX (612) and Carnival (450) are the biggest players.
According to a 2019 Mint report, operators planned to add as many as 7,000 screens over the next 10 years. On an average, a single chain added 40-50 screens annually before the lockdown.
Atul Mohan, editor of trade magazine Complete Cinema said limited cash flows will make opening of any new properties impossible.
Apart from existing established players, Mohan said at least two new groups were preparing to enter the exhibition business in India by April or May who will now possibly look at a launch post Dussehra. These were targeting locations such as Mumbai, Patna, Jaipur and some cities in the south.
“The overall multiplex scenario (in India) will be impacted. Once everything is normal, companies would like to keep a tight control on cash flows and spend very cautiously," admitted Gautam Dutta, chief executive officer, PVR Cinemas.
Over the next 15-18 months, PVR had plans to expand to major cities such as Bengaluru, Mumbai, Gurugram, Hyderabad and Ahmedabad, besides exploring new centres like Jamnagar, Rourkela, Mysore, Jaipur, Dhanbad, Patna and Agra. Dutta did not elaborate on where these plans stood.
Alok Tandon, chief executive officer, INOX Leisure Ltd, said the opening of any new property is dependent upon the ready availability of real estate. Not only will chains have to rethink if they have funds to invest in new properties, given that most are possibly already paying staff salaries and basic fixed maintenance expenses, real estate developers, under stress themselves, may also want to renegotiate deals for higher prices.
To be sure, theatre owners are keen to make audiences feel safe enough to visit after the lockdown is lifted. From temperature checks at entrances and deep cleaning to limiting seat allocation avoid overcrowding, there are several plans in the offing, at INOX for instance.
“We are in the process of mapping the customer journey at our sites right from the box office to the entrance, to the foyer, audis, washrooms and even till they exit. Starting with a one-metre gap at the box office to ticketless entries and a stronger push towards online ordering to contactless service for F&B, all our employees would be given masks and their temperatures would be regularly checked," Dutta said.
