India’s largest multiplex chain, PVR INOX, introduced a subscription plan of Rs 699 for 10 movies in a month, but media and entertainment experts believe that since the offer is valid only for first 20,000 customers—which is a small fraction of total footfalls—it might not make a large dent in the company’s overall sales.
Cinemas are still struggling to return to pre-Covid-19 occupancy levels on a consistent basis, barring a few exceptions like Jawan, Pathaan, Gadar 2. Analysts feel the reason is that the youth is moving away from cinemas and taking to OTT platforms like Netflix, Amazon Prime Video, Disney+ Hoststar. According to Elara Capital, higher ticket prices are another reason why theatres are keeping audiences at bay. “Dynamic pricing based on show timing, occupancy, size/scale of movie, etc may stabilise occupancy. Offering steep ticket price discounts (around 70 per cent) during off-peak hours may not hit exhibitors, as around 41 per cent of their costs are fixed. If the film industry were to collectively bear the loss of lower ticket prices without spiking the distributor share significantly, the ecosystem may benefit, by bringing the youth back to the cinemas,” Karan Taurani, Vice President, Elara Capital, said.
The said subscription plan may work if the offer is extended to more number of customers without any potential capping on numbers. “It can have a positive impact of 7-15 per cent on earnings. We expect a potential revenue upgrade of 3-6 per cent for exhibitors,” he adds.
The subscription pass will work between Monday and Thursday and won’t apply to premium services like IMAX, Gold, LUXE and Director’s Cut and the plan is not available in southern part of India. The plan could be bought for a minimum subscription period of three months.
Experts say that this move is mostly done to boost weekday occupancy. “Per our assessment, pan-India, annual average occupancy for exhibitors for weekdays (Monday-Thursday) is around 17 per cent. Based on the above announcement, discounted ticket prices may prop occupancy towards 20-25 per cent (from 17 per cent) on those particular days. This in turn may positively impact overall occupancy 170-460 bps,” he adds.
Dependence on large-budget films has increased to nearly 85 per cent in Hindi Box Office (BO). “It could swing either way for multiplexes. It may bring the audience back to cinemas in large numbers (thus, more frequency) or it may ensure unwillingness to pay premium ticket prices on weekends or night shows (as customers may be habituated to pay less). But there is low likelihood of the latter, as weekday audience is very different from weekend audience. This move may eventually bring the youth back to the cinemas, which will be a big positive structural trigger,” he explained.
Also Read: PVR Inox launches passport weekday pass: 10 movies per month for Rs 699