Last month, on the evening of November 8, when Prime Minister Narendra Modi made the startling announcement that `500 and `1,000 notes would cease to be legal tender in a few hours’ time, we, like much of the country, had thought that the resultant cash scarcity would be a temporary phenomenon.
At that point in time, we had expected that while there would undoubtedly be an adverse impact on the films releasing on the Friday immediately falling in a couple of days, normalcy in terms of availability of cash-in-hand and therefore, resumption of business-as-usual, would soon be restored. Unfortunately, almost six weeks into demonetisation, we continue to face a substantial illiquidity crunch and it is now clear that it will be months before we see the restoration of the status quo that prevailed pre-November 8 in terms of currency availability.
We will leave it to the economists and the television pundits to indulge in a cost-benefit analysis of this radical exercise and debate its long-term implications for the economy at large. However, from the specific perspective of the film trade, there is no denying the possibility – indeed, the probability – of a downtick in the flow of outside investors’ money into our business. What we also do know is that a bunch of film shoots has been disrupted or postponed, given the cash-intensive nature of film production.
This is still an ongoing development and we have to wait and watch before we can start assessing the long-term impact of this noteworthy (pun fully intended!) step to our business. For now, let us take stock of how the note-ban has played out at the box office in the immediate term. Take a look at the table below that compares collections accruing in the month of November over the last few years:
November Reign – Earns N’ Losses
The way to read this table is: 8 Hindi films released during the month of November in the year 2009, collectively amassing slightly less than `157 crore net at the domestic box office, or an average of almost `20 crore per film. So on and so forth for each row in the table.
Admittedly, this is not a perfect study as films are not uniform products and their collections can vary widely depending on how the audience reacts to them. However, that disclaimer aside, what the numbers clearly tell us is that both in terms of the cumulative collections of all films, as also the average collections per film, last month registered the lowest numbers for any of the Novembers tracked during this publication’s existence.
What is also important to note is that we had a pretty impressive roster of releases last month in terms of pedigree and face value, with a host of hitherto successful franchise properties and a wide spectrum of genres – many featuring A-league stars – hitting the marquee. Ergo, it would not be unreasonable to attribute November 2016’s unimpressive figures at least partially to the effects of demonetisation.
As to how long the scarcity of cash will continue to act as a box office dampener, and what the ultimate cost of this entire exercise on the film trade will be, well, your guess is as good as ours. Or to put it differently – and from the heading of this note as well as the data table you may have guessed that we are in an iconic rock music frame of mind this week – we may as well turn to the words of the most iconic rocker of them all, Bob Dylan, who last week became the first musician in history to win the Nobel Prize for literature: The answer, my friend, is blowin’ in the wind. The answer is blowin’ in the wind…