With the seemingly never-ending brouhaha that was 2020, it is safe to say that it wasn’t anyone’s favourite year. People couldn’t move around freely and visit loved ones, restaurants, malls and most definitely, cinema halls. The movie junkies that Indians are known to be, made it even harder for them to stay away from catching new flicks on the big screen. However, they quickly adopted newer alternatives like digital video streaming platforms for times when theatres remained elusive.
That Indians heavily incline towards Bollywood movies doesn’t need to be spelt out. Nevertheless, according to Shefali Khalsa, head, brand and communication, SBI General Insurance, Hollywood too, contributes to 10-15% of the box office revenues.
With all the cinema glory celebrated for a century, the whirlwind of the pandemic caused zero cash inflow for over 200 days, quite damaging to any business. Anand Vishal, chief sales and revenue officer - Inox Leisure breaks down the numbers. “The cinema industry clocks in about Rs 1000 crore per month of box office revenues, and about Rs 400 crore of food and beverage revenues. Collectively, the cinema exhibition business will have suffered revenue losses of more than Rs. 10,000 crore during the lockdown.”
Although cinemas have a long distance to cover the damages incurred, the festive season brought them some respite, which ignited the much-needed resurgence process. “It was not enough to capitalise the real dividend of the festivity. We wish the cinema opening announcement had happened a month earlier to provide the required gestation of warm-up,” said Gautam Dutta, CEO, PVR, who is still grateful for the initial organic push that the 50% occupancy gave for business conversations.
Vishal of Inox claims that the company’s content line up in the next 12-15 months will make for cinema ruling in FY22. “Markets like South India and West Bengal, for instance, which are not entirely dependent on Bollywood, are showing extremely bright signs,” he added.
Not too many businesses are new to the concept of safety protocol – sanitisation of hands and temperature checks. However, the idea of a dark, closed space like a cinema, is enough hesitation for consumers.
With an effort to open up the consumer mind-block a little at a time, Inox introduced private screenings, where a family or a group of friends can book an entire auditorium to enjoy the content of their choice, on a date and time of their choice. The cinema also stated that it has been working on creating a premium customised experience. Inox has also identified over 70 customer touch points in a cinema that a guest engages with, including e-tickets and digital interventions for locating seats and ordering food.
PVR, on the other hand, transformed its cinemas to match the standards of the Global Cinema Federation. “All auditoriums and other areas undergo an EPA approved complete ULV sanitisation process at regular intervals,” claims Dutta. He adds that this helps in coating the surface with anti-microbial layers with electrostatic machines for up to 30 days.
Taking technology one notch higher, the company makes use of UV cabinets to sterilise all its food packaging. It is also following an extended intermission time for sanitisation between shows and the sale of single-use 3D glasses.
Communicating the changes to the potential viewer
Although the communication with consumers about safety started long before pre-opening, social media channels and PR played a huge role in assuring viewers about the safety of cinema viewing. “A lot of influencers too, have been engaged to put across the message on cleaning and sanitisation. We also undertook a print campaign at the industry level,” Anand said.
PVR, too, has been communicating through signages placed around and outside the cinemas. “We have conducted media walk-throughs and are communicating our safety initiatives through various media channels. We have maintained on-going communication with our large database of members through a 360-degree approach which involved goodwill screening, promotions, partner members, film festivals, digital engagement and in-cinema experience,” said Dutta. The company aims to make the initial cinema-going audience become evangelists, thereby mobilising footfalls and earning goodwill.
Brand limitations and conversions
According to Dutta and Vishal, even in the lockdown period, cinemas were in constant touch with their advertiser brands. Some have already started to advertise due to pre-lockdown contracts and assignments.
But, Rima Kirtikar, chief marketing officer, Viviana Mall, which houses a Cinepolis theatre, states that many new brands were still dicey about cinema advertising because of the mind-block that consumers still had about venturing out.
She adds that although the centre has passed the law, some State Governments are yet to give a nod for theatres to function at 100% occupancy. “A few releases in January got good traction. However, there is no great content line-up right now and things are not entirely back to normal. Of our 15 screens, only six are functional,” she said, adding that smaller brands are advertising small-scale in cinema hall areas.
Speaking of the advertising queries it has received, Dutta of PVR said, “A few categories like FMCG, BFSI, Ed-tech, IT Hardware, have already been doing well during Covid and few others like automobiles, mobile handsets, consumer durables, and real estate have fairly turned around with festivity. A few reckoning brands have also started with their pilot runs. However, the response has been slow and steady as expected. Discussions with various brands across these categories have been underway for future investments and we foresee its traction falling in place, likely towards the end of this quarter.”
PVR also confirms that the start of Q4 (JFM) performed well for all the key stakeholders in the value-chain and would also play an instrumental role in the confidence-building measure of advertisers.
No cinema intervals used to be complete without a Manyavar ad starring Virat Kohli in a traditional outfit. Being some of the biggest advertisers in the cinema space, brands like Manyavar and Vijay Sales have resumed their advertising presence on the big screen of Inox cinemas. “There are also some large mobile handset manufacturers who will start advertising at pan India level very soon,” says Anand, who also reveals that Manyavar has become the first national brand to sign a pan-India deal exclusively with Inox.
Opining on what cinema advertising means to a marketer, Khalsa says, “As a marketer and a retail customer, I find cinema advertisements very interesting as it certainly provides value for money for every eyeball. Given the dynamism, it is a relatively economic choice for marketers.”
However, most brands are well aware that in the coming year, with a prowl of new content releases, including high-quality regional content vying for its silver-screen share, the much-desired surge of expected footfall will match its pre-Covid pomp.
OTT players’ strategy
2020 was the era of digitisation. Right from cashless transactions to in-home entertainment options, the digital way of living became the ‘new normal’. With cinemas shutting shop and consumers left with limited options, OTT played a major role as the biggest rebound and more, at this time.
According to a recently released report from global management consulting firm, Boston Consultant Group (BCG), consumers preferred more original content on OTT platforms than acquisition of movie models. Although most OTT players were all game for increasing the share of their original content, they are now gearing up to make sure they engage their audiences with more innovation-led alliances across platforms.
Speaking about its plan to retain subscribers, Divya Dixit, SVP, marketing, direct revenue and analytics, ALTBalaji says, “This year, we will be adding almost 30-35 originals to our content portfolio, with a set budget of 150 crores. We will also push the envelope harder on innovations across UI/UX, creating a pipeline of content, new business models, and marketing strategies.”
She also adds that the company has been aggressively focusing on the emerging youth from smaller towns by developing new concepts for its target audiences aged 20-40 years.
Netflix, on the other hand, is grateful for being able to provide the much-needed comfort and escape to consumers. “We love to invest in original and licensed content across genres and formats and want to be home to creators who can bring their amazing ideas to life in authentic ways. The current environment created some near-term opportunities to further bolster our slate,” a Netflix spokesperson said, stating that it was always a believer in original films and will continue investing into it without a fundamental change in strategy.
Since evolution is never easy nor kind, OTT players foresee many mergers, acquisitions, and co-productions as business models get explored.
Future of cinema and OTT
The OTT market is expected to hit $5 billion by 2023, according to Boston Consulting Group’s report. However, the streaming industry is also facing some new challenges. “To further penetrate Hindi heartlands, we will work on simplifying our UI/UX further, by bringing in voice search, one button click registration, as well as easy payment modules in retail and digital,” added Dixit of ALTBalaji.
With the opening up of cinemas, many have questioned the place that OTT will now have in the hearts of the consumer.
Speaking about the role of both mediums, Khalsa says, “While Indians will continue enjoying the cinemas irrespective of genre, we must take notice of how digital content, especially OTT platforms have found their way into the entertainment sector. There is certainly an overlap of audiences between OTT and cinema halls, which makes the budgets and media-mix kaleidoscopic for marketers, where the aim is not to have all their eggs in one basket.”
Mohit Joshi, CEO, Havas Media Group India, however, is certain that the OTT space cannot be substituted with the cinema experience. “Movies were never an everyday affair, but OTTs are a daily habit today. Also, OTTs are much more than movie-viewing and that part will never conflict with the cinema-going behaviour,” he said.
On the other hand, since both mediums are uniquely positioned, Navin Khemka, CEO - MediaCom South Asia, believes that they will both survive. “While OTT is more personal and a one-to-one consumption, the cinema theatre is a more social and outdoor led entertainment package. Humans are social animals and once COVID is out of our way, the big movies will be back at the theatres and so will the audience.”
Speaking about what OTT players can now do in order to keep themselves relevant, Joshi explains that the industry will have to continue to infuse refreshing and engaging content to keep the viewers cued in. “Cinema going was always an occasion and a larger social experience, which will soon come back to normalcy. However, more mega-blockbusters and ‘attraction of first day viewing’ will have to be created,” he concluded.
Although Khemka explains how every medium will have to thrive hard to stay relevant to its audiences, media agency veterans believe that an enthralling line up of movies and settling of audience apprehensions is what will push FY22 to be a few blockbusters away from making it a landmark year for cinema advertising.