A Look At India’s Cinema Business

A Look At India's Cinema Business

The government has announced Unlock 3.0 and plans to open gyms and yoga centres, but cinemas have not been given a green signal. On the other hand, prominent cinema chains in India released Standard Operating Procedures regarding what kind of movie experience the audience can expect in the time of Covid-19. Let’s have a look at the business of cinema and how it has been affected by Coronavirus.

Crux of the Matter

Cinemas To Not Open In Unlock 3.0
The government has decided to open gyms and yoga centres, however, educational institutes and cinemas have not been given permission to open yet. It is expected that respective state governments will take the final call whether to open cinema houses once the Centre gives a nod. Producers and directors such as Anurag Basu, Sudhir Mishra, and others have said that theaters shouldn’t be open till the vaccine is found, whereas R Balki, Anubhav Sinha, and others have said that theaters should be opened with precautionary measures.

Propose Operating Producer
Cinema chains have proposed Standard Operating Procedures (SOPs) for running theatres with precautionary measures. Theaters will screen movies with only 25-30% audience in the hall. Moreover, Arogya Setu would be mandatory for entering the theatre’s premises. Customer screening will be done and those having temperature of 100° F or more and/or with any symptoms of cold or fever will not be given entry.

The floor will be marked with spots 1 meter apart and sanitizers will be made available throughout the theatre. There will be a gap of one seat between viewers and interval timing will be extended to avoid crowding. Ultraviolet cabinets will be used to disinfect food servings. In addition to these precautions, the air-conditioning system will be revamped to pump fresh air into the theater.


How Do Cinema Houses Earn?
A Producer funds money for all expenses needed to make a movie including actors fee, promotion, and advertisement cost, etc. After the completion of the movie, produce sells the rights of the movie to the Distributors. Currently, there are 14 circuits in India and each circuit has its own “distributor representative”. These distributors sign agreements with theater owners. After signing the agreement theaters pay distributors on a weekly basis as per the agreement after deducting Entertainment Tax (different states have different entertainment tax). Once the distributor has received the sum, it disburses the share of theatre.

On average Entertainment Tax is around 30%. For multiplexes, the standard structure is this: the distributor gets 50% of what theatres earn in 1st week, then 42% of what is earned in 2nd week, then 37% of what is earned in 3rd week and then 30% fixed of what is earned from 4th week.


Emerging OTT Platforms A Threat?
OTT platforms are now bringing changes to the entertainment sector. Currently, there are 40 OTT platforms operating in India. The Indian film industry has suffered an estimated loss of ₹30 billion and the global industry has suffered ~₹750 bn loss due to lockdown. Time spent by the Indian OTT user base has increased from 20 minutes to 50 minutes per day during the lockdown. Theatres may become a luxury experience and experts say that the film industry can only thrive by integrating with new technology.

Curiopedia
  • PVR Cinemas stands for Priya Village Roadshow. It’s a joint venture agreement between India’s Priya Exhibitors Private Limited and Australia’s Village Roadshow Limited.
  • Maratha Mandir is a cinema hall located in Maratha Mandir Marg, Mumbai. This cinema hall has a long-standing reputation and is one of the most famous landmarks in Mumbai. The theatre created a record after screening the movie Dilwale Dulhaniya Le Jayenge for 1009 weeks since its release in 1995, on 19 February 2015.
  • A drive-in theater or drive-in cinema is a form of cinema structure consisting of a large outdoor movie screen, a projection booth, a concession stand, and a large parking area for automobiles. Theatre de Guadalupe from Mexico was one of the first drive-in theatres.