To Worry Or Not To Worry?

How digital medium (Netflix, Amazon) is going to affect theatre business?

Mr. Sanjeev Kumar Bijli, Joint Managing Director, PVR Ltd..

Theatres have forever been fending of disruptions caused by technological advancements- VHS tapes, DTH services, Satellite TV, Online streaming etc., along with plain thievery like piracy. The film business has evolved and has converted the legitimate advancements in to revenue streams.

In 2015, America’s four largest exhibitors — AMC, Regal, Cinemark and Carmike, did not screen Beasts Of No Nation, a drama about child soldiers in Africa because they didn’t want to provide screens to films that did not honour the typical 90-day delay between a theatrical debut and a home entertainment release. Similarly, earlier this year, 93 per cent of South Korean theatres refused to screen acclaimed filmmaker Bong Joon-Ho’s fantasy adventure Okja, it’s day-and-date release on Netflix violated the country’s three-week window.

Globally in markets like U.S. that are adequately screened, Producers and Studios have respected the release window and kept a healthy gap between the date of release in cinemas and date of release on all other formats, i.e. DVD, DTH, TV, Online Streaming etc. For Films, success in Cinemas establishes brand value and bolsters revenue in downstream markets. In India the period between the date of release in cinemas and on other formats is already very short and is further getting reduced with every passing year. Such short sighted practices will in the short term, impact the Indian film exhibition.

In the short term, in India, the online streaming companies are currently working on an acquisition model similar to the one corporates, without studio infrastructure, adopted a few years ago. This drove up the film budgets and made acquisitions even more expensive.

The films that suffer, are the mid to small budget stories, which enjoyed a wider audience and were once very profitable are now unsaleable unless there is an A lister star / producer / presenter involved. Also, with such films available on digital platforms with a short wait time, the audience has migrated from the cinemas to these platforms. Shorter release windows are building a perception, that these mid-small budget films are value for money at home, and not at the cinema.

In America, in 2016 alone, there were 485 scripted shows on TV and online streaming. Add to it, films from all over the world. While the audience is spoilt for choice, the novelty of the world of entertainment available to you, just a few clicks away, wears off eventually. Audiences are social beings, and will seek out company and the communal experience.

Exhibitors have invested, and continue to invest, enormous amount of effort and capital in laying the cinema infrastructure in all parts of the country, further, a lot of effort and capital is being invested in cutting edge, world class cinema formats such as IMAX, Dolby Cinemas, 4DX, Play House, Gold Class, P[XL] etc., to continuously enhance and upgrade the movie going experience. In addition to this, various other initiatives are taken by the multiplex players to enhance the overall experience by innovating with the F&B and service provided.

It is a fact, that films are a big screen shared communal experience that just cannot be replicated at home. If anything, we are sure that the talented filmmakers and actors will endeavour to make films for the big screen. A good and differentiated content is appreciated everywhere irrespective of the language and moreover, film promotions and distribution also contribute to the success of the movie. At present, ‘word-of-mouth’ marketing has suddenly become a successful notion where low-budgeted content has benefitted tremendously.

The future of the cinema business is dependent on the improvisation of improving the overall cinema watching experience. Today, the consumer demands an evolved cinema, which is a complete entertainment package and a wholesome family experience. New innovations in the industry are the driving force for the growth that includes creative content, inclusion of world-class technology, cinema designs, comfort, service and accessibility. Moreover, government initiatives would be required to make the cinema exhibition sector grow at a faster pace.

The expansion of multiplexes in Tier II/III cities would prove to be good growth factor as they provide better economic model for the multiplexes. Metro cities have all types of magnificent cinemas and an increased demand in the smaller markets for evolved multiplexes can be an upcoming trend. The industry is also devising a low capex strategy in bringing world-class cinema to the small cities due to increase in spending propensity and changing consumption patterns.

(Written by Sanjeev Kumar Bijli, Joint Managing Director, PVR Ltd)

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