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.

  • 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.

M&E Sector Hopes to Bounce Back

While most of India is under COVID-19 lockdown, the Indian Media and Entertainment (M&E) Industry which includes a wide spectrum of activities and audience base that has multi-media consumption is facing the most harsh and unprecedented time. However, the industry’s landscape seems to be shifting to online media consumption with surge in viewership of television, OTT platforms, gaming platforms, etc.
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Crux of the Matter

The media and entertainment (M&E) sector in India is estimated to have valued at ₹1,631 billion in FY19 and grew at a CAGR of 11.5%. The M&E industry is a close-knit structure wherein each one is inter-dependent. Due to the pandemic induced quarantines, the media consumption has massively increased and a survey conducted by McKinsey and Company shows the expected behavior changes in Indian media consumers.

During the lockdown, certain segments of M&E are seeing consumption growth whereas, on the other hand, outdoor consumption models are seeing a dramatic fall.

Newspapers are recognized for high credibility especially in today’s times of social media. Due to the complete lockdown, newspapers were forced to close down production and stop their distribution to control the virus. As a result, nearly 80% of the revenue which comes through advertising has come down nearly to zero.

The Times of India, the world’s largest English-language newspaper is struggling to adapt to these times of crisis and has shrunk to only 16 pages from 40. They are dropping online paywalls and offering free PDF versions of the print edition to try to keep their audiences intact. Even The Indian Express has announced deep wage cuts and also asked the Finance Minister for a two-year tax holiday and the removal of import restrictions on newsprint.

Those newspapers who already have an established digital presence are slightly benefiting and reaching out to wide demographics and also trying to build new customers. But none of this seems to help them earn revenues at a time when the economy is hard-hit and advertisers shift to TV and online advertising.

Good Days for the OTT Industry
The film industry which was once considered recession-proof is now facing unprecedented losses due to the Coronavirus outbreak. Across the world, movie theaters are shut, film festivals have been canceled, movies which were in production or post-production are delayed, future releases are postponed, all of which have resulted in huge losses, mass layoffs, and salary cuts for thousands of workers and employees.

If the lockdown has benefited any medium then it is OTT. OTT stands for ‘over-the-top’, meaning delivery of TV and film content directly via the Internet. It has undoubtedly registered a spike in new consumers as it is hugely benefitting from the shutdown of cinema halls. Netflix and Amazon continue to rule the OTT market with Disney+ entering as the new competitor. Some of the filmmakers are now making and releasing movies exclusively on the OTT as it not only cuts down on a lot of overhead costs but also provides a ready viewer base.

Online Gaming
Closure of major sporting events has led to alternative e-sport formats gaining visibility. More brands are exploring this as an alternative revenue model. Streaming platforms and game publishers are benefitting as people are buying, playing, and watching more video game content.

The global viewership has increased by 10% on Twitch and 15% on YouTube Gaming. Verizon reported that US domestic peak-hour video game usage was up by 75% in the first week of quarantine. There is also a significant growth in mobile games like LudoKing, PUBG, Candy Crush whereas apps like Dream11 have fallen apart.

With more stay-at-home mandates being issued around the world and the entertainment industry finding new ways to migrate their offerings to live-streaming platforms, we expect to see these numbers rise.

Doron Nir, Chief Executive, StreamElements

A lot of Out Of Home (OOH) advertising and sponsorship deals have been negatively affected as live events like Wimbledon, IPL, Tokyo Olympics, etc. have been postponed. The cancellation of sporting events has forced sports broadcasters who thrive on live content to resort to showing archived re-runs of tournaments and world cups which has surprisingly resulted in a 21% surge in sports viewership according to the recent data revealed by BARC-Nielsen.

‘Non-Prime Time is the New Prime Time’
The highest TV consumption numbers in the history of Indian television were reported as TV is the major source of news and entertainment for millions of people in lockdown. A joint report by BARC India and Nielsen reported that during March 21st-27th India’s total TV consumption grew by 37% to cross a record 1.21 trillion minutes. The average time spent per viewer increased from 3 hours 46 minutes in January to a whopping 4 hours 39 minutes per day.  The United States also saw an average increase of 11% in daily household viewership.

The pandemic is hitting hard the media sector which will witness a slowdown due to reduced overall demand and unprecedented losses. Although the full effect of the COVID-19 pandemic remains unclear it is expected that the M&E industry will bounce back and return to growth quickly once restrictions are lifted and the economy returns to full capacity.

  • The month of March 2020 witnessed an upsurge of 39% in global mobile game downloads. The Ad-Tech firm, POKKT Mobile Ads, has registered that there has been a 31% increase in ad requests globally thereby pushing the mobile gaming industry into a stronger growth curve.
  • Netflix on 2nd May announced that its latest release starring Chris Hemsworth and Randeep Hooda, Extraction is going to become its most-watched Netflix original film. The film will be crossing 90 million streams in the first 4 weeks after its premiere. The major reason behind the same is the global lockdown that many countries have been following.
  • As per an article by The Guardian, “Disney has been losing hundreds of millions of dollars in income from its theme parks and cruise liner businesses because of the pandemic.” Analysts have estimated that the company could be facing an 11-million fall in visitor numbers across its theme parks, at a potential cost of $500 mn.

Rock Jesus Bono Resurrects 80s Classics to Serenade Mumbai on Sunday

Irish rock legends U2 performed in front of a packed DY Patil Stadium on Dec 15 in Navi Mumbai, their first concert in India. In a show filled with classic U2 songs performed with immaculate perfection accompanied by eye-catching light-shows, frontman Bono made it a point to underline the importance of unity, humanity and peace in a world filled with strife.

Crux of the Matter
  • This was the last leg of The Joshua Tree tour of 2019. The 2.5 hour concert, inspired by the seminal 1987 U2 album The Joshua Tree, consisted mostly of U2 classics from the 80s along with some of their later hits during the encore.
  • The show aptly started with a rendition of ‘Sunday Bloody Sunday’ and ended with the preacher ballad ‘One Love’. Amongst many highlights, one of the most eye-catching performances was that of ‘Bullet the Blue Sky’ which was an aural and visual extravaganza with dramatic visuals enhancing the aggressive message-filled music.
  • On this stage, U2 debuted their latest collaboration with AR Rahman called ‘Ahimsa’, a song inspired by the message of Mahatma Gandhi.
  • U2 frontman Bono, who has been a prominent global activist over the last 3 decades, made it a point to share messages of love, harmony, peace, acceptance and global unity in the face of global environmental crises.
  • One of the most poignant yet inspiring performances was that of ‘Light My Way’, wherein U2 paid tribute to women across history around the globe who have contributed towards gender equality and have made a mark in the world. U2 cut across politcal lines to pay tribute to female icons from Arundhati Roy to Smriti Irani and from the early suffragettes across the world to Greta Thunberg.

U2 are an Irish rock band from Dublin, formed in 1976. The group consists of Bono (lead vocals and rhythm guitar), the Edge (lead guitar, keyboards, and backing vocals), Adam Clayton (bass guitar), and Larry Mullen Jr. (drums and percussion). Initially rooted in post-punk, U2’s musical style has evolved throughout their career, yet has maintained an anthemic quality built on Bono’s expressive vocals and the Edge’s effects-based guitar textures. Their lyrics, often embellished with spiritual imagery, focus on personal and sociopolitical themes. Popular for their live performances, the group have staged several ambitious and elaborate tours over their career. More Info

Filmmaker of the Decade label given to Denis Villeneuve

Hollywood Critics Association has named Denis Villeneuve, a French Canadian film director, writer, and producer, as the filmmaker of the decade. He has won 3 Academy Awards, 3 BAFTA, 4 Canadian Screen Awards and has been nominated twice in the Golden Globes till date.

Crux of the Matter
  • All set to receive the honour at the association’s ceremony in January 2020, Villeneuve is is best known for directing critically acclaimed films like Arrival and Blade Runner 2049.
  • He is also a four-time recipient of the Canadian Screen Award for Best Direction, for Maelström in 2001, Polytechnique in 2009, Incendies in 2011 and Enemy in 2014
  • A native of Becancour, Quebec, he has directed eight films that have effortlessly earned $700 million at the box office around the world.
  • Wholeheartedly welcoming this latest achievement, fans are now excited about his upcoming movie Dune, which is his take on the classic Frank Herbert novel of the same.

Denis Villeneuve is a French Canadian film director, writer, and producer. Denis, pronounced as ‘denny’, abandoned his interest in science in college to pursue his love of filmmaking and his all-time favourite film is Stanley Kubrick’s 2001: A Space Odyssey (1968). His family includes famous faces like his brother, Martin Villeneuve who is a TED Talk Speaker and director of Mars et Avril (2012), and his wife who before acting in his films, worked as a field reporter, interviewer, and TV Host for Radio-Canada. More Info

Baby Yoda GIFs Restored

Rejoice! Baby Yoda GIFs have been restored on several sites, after a brief confusion about Disney Copyrights.

Crux of the Matter
  • Images and GIFs of the popular and adorable Baby Yoda have been restored, after being pulled down from several websites.
  • Prior reports had hinted Disney copyright claims were liable for the expulsion of Baby Yoda GIFs, after a Vulture staff member saw the distribution’s GIFs of the Future Jedi were erased from Giphy.
  • “Last week, there was some confusion around certain content uploaded to Giphy and we temporarily removed these GIFs while we reviewed the situation,” the company said in a statement. “We are happy to report that the [Baby Yoda] GIFs are once again live on Giphy.”
  • Baby Yoda features on Disney’s show “The Mandalorian”.

The Mandalorian (also known as Star Wars: The Mandalorian) is an American space Western web television series that premiered on Disney+ on November 12, 2019. Set in the Star Wars universe, the series takes place five years after the events of Return of the Jedi and follows a Mandalorian bounty hunter beyond the reaches of the New Republic. Read More