Realty Slowdown Impacts Bollywood Revenue Due to Multiplex Delays
The Bollywood film industry faces challenges due to a slowdown in the property market, leading to delays in multiplex construction. This situation has affected the entire film business as many multiplexes, initially scheduled for completion, remain unfinished.
Revenue of Bollywood movies is affected as number of multiplexes are lower.
The sluggish property market has put many mall projects on hold, impacting Bollywood. Estimates suggest that about 150 multiplexes nationwide have faced completion delays because of the real estate slowdown.
The fact that the property market has indirectly impacted Bollywood is not good news for Bollywood fans. If developers fail to develop enough multiplexes, the ability for the public to view Bollywood movies in theaters will be negatively affected. The downturn within the real estate sector consequently impairs Bollywood, despite the indirect nature of the impact.
Most Indian multiplexes, critical to film earnings, are located inside shopping centers. The film industry inevitably suffers when developers halt mall construction because of the present downturn. According to industry experts, Bollywood might have missed out on over 150 multiplex screens that would have boosted revenue.
Bollywood needs more multiplexes to better revenue.
The quantity of multiplex screens influences a film's total earnings. For example, the average earnings from each multiplex screen for the hit films 'Rowdy Rathore' and 'Barfi' in 2012 were Rs. 5 lakh and Rs. 6.5 lakh, respectively. More screens could have significantly increased revenue.
"These films would have earned over Crores of rupees even if they were getting only a half or 60% of the total collection from these screens," stated Mr. Siddharth Roy Kapur, MD (Studios) of Disney UTV.
Delayed mall construction purportedly led PVR to acquire Cinemax, including its 138 screens, in 2012. With this acquisition, PVR became the industry's largest player. PVR Group President Mr. Pramod Arora noted that incorporating an additional 20 to 30 screens would have boosted the company's revenue.
Property developers seem to prioritize residential projects, as they typically offer higher returns, over mall projects. However, the delay in mall construction undoubtedly affects the Bollywood industry adversely, albeit indirectly.