The new year has started on a positive note for the theatre industry, with the Tamil Nadu government on January 4 allowing theatres to run at 100 percent capacity.
After staying shut for seven months due to COVID-19 pandemic-led lockdown, theatres were allowed to reopen from October 15 with 50 percent capacity. However, now Tamil Nadu has become the first state to increase the capacity to 100 percent.
An exhibitor said while this is one of the best news in the post-pandemic times, he is unsure how this will pan out.
"This move will encourage other states to let theatres operate at 100 percent capacity and by March we can have 100 percent capacity available across the country," he said on the condition of anonymity.
Plus, the news comes just days before the release of Vijay's Master on January 13 during Pongal holiday. The Hindi version of the film will release on January 14.
Karan Taurani, Vice-President, Elara Capital, expects Hindi film producers to announce dates in the coming weeks based on the performance of Master. He expects the film to record a strong performance at the box office.
"Master has been given at a discount of mere 10-15 percent to sub-distributors which is also an indication of strong collection numbers for the film. The film has been sold for over Rs 100 crore. In terms of theatrical rights this is a discount of only 10 percent in comparison to pre-COVID period," said Taurani.
"The film has to do business of Rs 180 to Rs 200 crore for a break even which the distributors are confident given the pent-up demand for a large film and relaxation of occupancy cap in the key market (Tamil Nadu)," he added.
"South India has the highest occupancy pan-India, and it was important for the revision to happen for large films to gain success," he added.
He expects other states like Andhra Pradesh and Telangana to consider relaxation of the occupancy cap in the near term. "Karnataka and Kerala may take time for the same," he said.
Film trade analyst Sreedhar Pillai said there definitely will be pressure on other markets to let cinemas function at full capacity.
He added that this is the biggest boost for Master as the expectation was that capacity will increase from 50 percent to 75 percent. But Tamil Nadu government has increased it to 100 percent which is positive news for the film industry.
Along with Master, Taurani expects the move to prove more beneficial for one of the largest multiplex operator PVR "given its higher presence towards regional content".
Out of the 845 screens, PVR has around 286 screens in South India.
Also, the multiplex operator in 2018 had bought Chennai-based SPI Cinemas to increase its presence down south.
Master's release and Tamil Nadu allowing cinemas to operate at full capacity will set the stage for the COVID-19 pandemic-hit film industry.