After the release of ‘Pathaan’ in January, box office collections have been lackluster. However, the release of ‘The Kerala Story’ this month managed to partially revive the revenues of malls.
Under the revenue share agreement, malls receive a guaranteed minimum rental along with a share of the revenue. However, when it comes to cinemas, they are currently only receiving the minimum guarantee as revenue has not exceeded that threshold.
“PVR Inox is currently in the advanced stage of fitting out approximately 175 screens, which are planned to be opened this year. We have a strong pipeline of a similar number of screens that will be handed over and fitted out this year. However, due to the high level of volatility at the box office, we have decided to stabilize the situation before proceeding with the next set of screens,” said PVR Inox. “As a result, we have delayed all upcoming handovers.”
PVR Inox has experienced a decline in footfall from 168 million in 2019-20 to 140 million in 2022-23. Malls are hopeful that the movie lineup from July onwards will help revive the industry.
“In the last three months, cinemas reported 27% occupancy, but in May, the occupancy increased to 40%. At 40%, we reached the revenue share threshold, and despite the challenges of the past few months, we expect cinemas to bounce back,” said Harsh V Bansal, co-founder of the Unity Group, which operates multiple malls in Delhi and Punjab.
Rajendra Kalkar, president-west at Phoenix Mills, which operates several malls in Mumbai, Pune, Bengaluru, and some tier-2 cities, also noted a dip in revenue from cinemas but mentioned some improvement in May.
“We have observed a clear downward trend in cinema occupancy, and PVR has announced the closure of about 50 screens. Future malls may reconsider the size and number of screens and introduce more alternative entertainment options on higher floors,” said Shriram PM Monga, co-founder of retail consultancy firm SRED.
Despite a slow April, PVR Inox mentioned that May is looking better than anticipated.
“We expect much better content starting from May-June onwards, with a lot of big movies. Based on the content flow, the second and third quarters are looking promising,” the company stated.
Operating costs for theaters have also increased in 2022-23 as most of the rebates offered during the Covid-19 pandemic have ended.
“Cinema as a category will continue to benefit malls as Indians enjoy going out for movies. There will be periods when movies underperform, affecting revenue, but such periods are likely to be balanced out by blockbuster releases,” said Muhammad Ali, CEO of Forum Malls of Prestige Group.
PVR Inox added 79 screens in the fourth quarter of 2022-23, bringing the total number of additions in the financial year to 168 screens. In the current fiscal year, the company plans to open another 150-175 screens.
So far, nine screens have already opened, 15 are awaiting commercial licenses, and 152 screens are at various stages of fit-out. The company has also decided to close approximately 50 screens across the country within the next six months.
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Basant Kasayap is an entertainment aficionado who delves into the glitz and glamour of the entertainment industry. From Hollywood to Bollywood to regional cinema, she offers readers an insider’s perspective on the world of movies, music, and pop culture.
