Digital threat

Indian multiplex companies are facing a dual fallout from COVID-19 as film producers are increasingly opting for OTT (over-the-top) or digital platforms rather than multiplex to release their cinemas as screens remain shut due to nationwide lockdown.

"The advent of COVID-19 has left a serious mark on our fourth quarter performance and will remain a cause of concern in the subsequent months as well," said Siddharth Jain, director of Inox Group, which operates India's largest multiplex chain with 626 screens in 68 cities.

On Monday, two multiplex chain Inox and PVR reported a net loss of $300,000 and $9.9 million for the January-March quarter, though both had full year of profit before the COVID-19 pandemic broke out in the last quarter of the financial year.

Several film producers had postponed their release with the rise in COVID-19 cases while many other were seen moving towards OTT platforms, or digital streaming media services, to release their films including mainstream Hindi language as well regional language films like Tamil and Telugu.

In May the Multiplex Association of India urged film producers to support the cinema exhibition sector, a vital part of the value chain, by holding and releasing their films in the theaters, once the government allows them to open.

"To this end, we urge all studios, producers, artistes and other content creators, to kindly respect the exclusive theatrical window, which has been a time-tested industry practice, agreed to by all stake-holders, not just in India, but even globally, for several decades," the statement said.

"There are uncertainties associated with the nature and duration of the COVID-19 situation and accordingly, the impact of the pandemic is difficult to predict and actual results may differ from the estimates," said PVR management, which operates a cinema circuit of 845 screens in 176 properties in 71 cities of India and Sri Lanka.

The Indian film industry, which releases more than 1,000 films annually on over 9,600 screens, generates a revenue of $2.3 billion as per the last available report by industry body FICCI, with domestic net box-office collection totaling $1.3 billion.