Did Covid sound death knell for multiplexes?

Huge drop in footfall due to night curfew, absence of new releases, combined with overhead costs proving fatal for cinema houses; City Gold, which has 6 multiplexes in city, recently sought staff resignations to cut down losses

The night curfew, no new releases, continued fixed costs and taxes, mandatory vacant seat between two viewers... the Covid-19 guidelines are proving to be nemesis of cinema houses, both multiplexes and single screens. According to a distributorcum-cinema house owner in the city, around 15-20 per cent multiplexes are considering closing down business here.

The City Gold management that operates 19 of the roughly 108 screens in Ahmedabad has reportedly sought resignations of a majority of their staff, reportedly due to low footfall. It was being speculated that the management may close down all its six multiplexes— at Ashram Road, Shyamal Crossroads, Bopal-Ambli, Motera, Bapunagar and Kadi. Each location has at least 20 and maximum of around 30 employees.

City Gold managing director Samir Gupta, however, denied it. “The step is being taken to cut down on the losses. This is just a temporary setback due to Covid-19 guidelines. We have bigger plans because ours is a dream project. We will reopen in March-April once the guidelines are eased.”

He said that all the City Gold multiplexes cumulatively have 3,300 seats. “When we restarted briefly. We got just 10-15 persons for each screen. We would have continued operations had we got even 10 per cent of the total volume business,” he added. Sources close to the management claimed that the resignations were sought because of losses due to the cost burden.

Hinting at the crisis, Vandan Shah, a distributor and exhibitor, said, “About 15-20 per cent of multiplex owners may consider downing their shutters. Across Gujarat, multiplexes and cinema halls have incurred losses between Rs 250-300 crore, including the loss to eateries, shops and other establishments inside the multiplexes.

But it excludes hawkers and vendors standing outside the cinema houses and rickshaws earning from viewers of late-night movies.”

Shah said that there were several malls in business because of multiplexes in their premises. “Several of such malls have also been affected.” He pointed out that the running costs and overheads remained a burden despite the closure of the multiplexes for seven months. “There are 35 multiplexes and cinema houses in the city. The property tax and cost of HT electricity lines to these multiplexes and cinema halls have been pretty high. Ahmedabad cinema houses alone pay Rs 100 crore tax to the government.

The government must consider reducing some of these costs, without which the entertainment industry will be affected significantly.” Manubhai Patel, president of Multiplexes Association of Gujarat, said, “The scenario is grim as far as multiplexes are concerned. Most multiplexes have been paying full salary to their employees but this is proving to be increasingly difficult. Most of the cinegoers are couples. The rule of alternate vacant seats has led to a drastic fall in their numbers. The 9 pm deadline is another dampener.”