Movies, Malls and moolah

RRR, the much awaited blockbuster from Bahubali director Rajamouli released world over on 25 Mar. ’22. The movie has collected Rs. 240 Cr apparently on the first day of its release. Of this, Rs. 120 Cr was collected from the original release language that is Telugu, another Rs. 45 Cr from rest of India and Rs. 70 Cr from overseas. This is a record of sorts which even the Khans during their best days could not achieve, inflation adjusted. The fact that audience are back in full at theatres to watch movies is a great sign that the economy is in the rebound mode. Other than Boxoffice collections, standalone theatres and multiplexes make 20-30% of the BO value as incremental income, through parking charges and F&B counter revenues. Stock price of PVR Ltd. went up as high as Rs. 100 on Friday even as the movie released to a thunderous response. India’s largest multiplex chain PVR Cinemas operates 860 screens across 179 properties in 73 cities in India and neighbouring Sri Lanka. Rival INOX Cinemas operates at 160 properties with 675 screens in 72 cities in  India.

Together, the two companies have an over 25% market share of the 6,300+ movie screens in India. Andhra & Telangana put together have over 800 screens and Tamil Nadu has over 750 screens. The Show-Biz in India is estimated at USD 2.7 Bn, in 2019, which is around Rs. 18,000 Cr – this is just the BO size.For FY 22-23, it is estimated to be around USD 2 Bn, after a two year lull due to the pandemic & lockdowns. For the past three years, we have also seen a steady increase in subscriber base of Amazon Prime & Netflix among other OTT players. However, unlike how many self-claimed pundits predicted, there seems to be absolutely no impact on  the Box Office, at least in the release & collections of films over the past 2 months.

Rajinikanth’s Annatthe (Tamil and dubbed in Telugu / Hindi, etc.) went on to collect over Rs. 200 Cr at the BO. Ajith Kumar’s Valimai has collected over Rs. 200 Cr worldwide in the past 4 weeks. Vijay’s upcoming Beast (said to be a remake of Antonio Banderas’ Security) is expected to garner over Rs. 300 Cr due to the release strategy of maximising screens. The Kashmir Files, a low key film has already made at least Rs. 200 Cr in theatres, thanks to a push by Indian politicians and patriots. Salman’s Radhe Shyam, what was dubbed a flop made over Rs. 200 Cr in 2022 while Gangubai Kathiawari is nearing the Rs. 200 Cr mark. Runway 34 feat. Big B, Abhishek’s Dasvi, Heropanti 2 and a dozen films are set to release in the next 6 months.

Movie releases have a profound impact on the retail and consumer businesses.

Over 2 decades ago, watching a movie was a quiet affair – noon show for college goers, weekend matinee or evening show for families and so on. Not much of dressing up, carry own food to munch during the movie and so on. Things have changed immensely over the past 15 years. There is a pre-movie meal or a snack and then there is a post-movie meal, so the entire outing is spread over 5-6 hours. And then there is munching inside the screen, at times before and after intermission. Then add to it, strolling at a Mall and window shopping and it spans to almost an entire day. This is where Retailers and Restaurants take advantage. They look forward to the big weekend when cinema enthusiasts flock to the multiplexes and thereby end up spending on other categories too.

If the same trend as last 2 months continue and with a slew of films across languages to be released, it’s great business time for brands.