From organising film festivals to capitalising on Hollywood releases, multiplex major PVR says that it is all set to start operations as soon as it gets a go-ahead to open its multiplexes. "By the time we open up, Hollywood will already be there. We will also sit down with the local producers and plan their releases," says Nitin Sood, CFO, PVR. Though the lockdown saw film-makers (Gulabo Sitabo, Shakuntala Devi and Ghoomketu) releasing their films on OTT platforms, Sood says it was an insignificant number and that there are a host of big titles waiting to be released in theatres. "There may be three-four weeks of slow demand initially, but footfalls will incrementally get better," Sood further adds.
The multiplex company has recently completed a Rs 300-crore rights issue which was over-subscribed 2.24 times. The rights issue, says Sood, received an application for 85 lakh shares worth Rs 672 crore. "Every shareholder participated in the rights issue and it shows their belief in the long-term value of our business even at a time when our business is not operational due to the pandemic. It will help us tide over the liquidity issue we faced due to the closure of the multiplexes and we will be able to go back to pre-COVID levels within three-six months."
The multiplex fraternity was at loggerheads with the film producers who decided to release their films on OTT platforms during the lockdown. In fact, industry experts believe that going forward many small to mid-sized film-makers may opt to bypass the theatres or multiplexes and do direct-to-digital releases as theatrical releases don't add too much to their fortunes. This could result in content shortage for the multiplexes. Only 5-7 per cent of small budget films made at a cost of Rs 10-15 crore earn Rs 50 crore revenues at theatres. Therefore, if a producer can do a good OTT deal, he/she may be able to earn more than his/her budget and even get 10-15 per cent ROI, without a theatrical release. The multiplexes, however, need the small and mid-sized films to generate footfalls.
"Tentpole releases are at the most 10 a year, and theatres run on full capacity for maximum 15 days. It is the small and mid-budget films which actually generate footfalls for the multiplexes throughout the year and also keeps their F&B revenue going," explains a senior industry experts. However, Sood claims that there are enough films waiting for the multiplexes to open up. With Hollywood releases scheduled for August 26 globally, he says that by the time the multiplexes are operational, there will be a slew of titles such as Tenet, Wonder Women, Black Window, No Time To Die, Kingsman, Tom & Jerry and Dune ready for release.
Apart from dealing with a a shorter content pipeline, the multiplex industry is also trying to convince mall owners for a rent waiver during the lockdown period. "We are also negotiating for either reducing fixed rentals or doing a revenue share till the end of this fiscal. The discussions are progressing well," says Sood, who is confident that business would pick up post Diwali and fiscal 2021-22 would be as good as fiscal 2019-20. "FY20 was one of our best ever fiscals. We made a cash EBITDA of Rs 700 crore," he adds.