Coronavirus bears down on Bollywood with no ticket sales & hiked marketing budgets

Bleak times lie ahead for the Hindi film industry in this quarter as Covid-19 outbreak decimates footfalls to the theatres

e4m by Tasmayee Laha Roy & Shreshtha Verma
Updated: Mar 18, 2020 10:18 AM

The closing of theatres amid the coronavirus outbreak has come with a chain of fallouts. It is not just the lack of revenue from ticket sales that is burning a hole in the film fraternity's pockets. As it turns out, there is a loss of money from in-film advertising too. Making it worse for the industry, the production houses are forced to pump up their marketing budget so that films delayed by the abrupt closure sell well whenever they hit the theatres.

“This quarter is completely washed out and shall be down at least 40-50 per cent as compared to last year. One, because the movie line up was weak and then the Covid-19 impact in March,” said Mohan Umrotkar, CEO, Carnival Cinemas.

While ticket sales bring in the maximum revues for the theatres there is advertising revenue too that adds to the top line. Close to 15% of revenues drawn from in-film advertising is now lost. Theatres make anywhere between Rs 100 crore and Rs 160 crore annually from in film advertising. As multiplexes shut in Delhi, Uttar Pradesh, Mumbai, Karnataka, Kerala and many other places ad revenue loss for the fortnight runs up to more than Rs 100 crore.

Those aren’t all the only losses though. Films like Sooryavanshi that got delayed due to the lockdown will now have to increase their marketing budgets said experts. “Once theatres open up, there will be a lot of pressure. There will be films that were scheduled to release at that time and there will be films that got delayed due to the closure. These films will have to double their marketing budgets to re-market their films aggressively,” said Girish Johar, trade analyst and film producer.

“A film’s marketing plan is a build-up to creating an affinity towards the film. A derailment like this has an impact on the mood and momentum of the film. Also since films like Sooryavanshi was supposed to make Q1 of this year exciting, the delay makes the quarter a damp one,” said Harikrishnan Pillai, Co-Founder & CEO TheSmallBigIdea, which recently marketed films like Thappad, Love Aajkal 2 and Shubh Mangal Zyada Savdhaan.

Tinu Cherian Abraham, Marketing and PR Professional belives that the coronavirus will severely impact movie business in the short term. With cities and towns on lockdown, it will affect the footfalls to the theatres.

Movies will move faster to streaming services like Netflix, Amazon Prime and Hotstar as people will start preferring to watch them from the comfort and safety of home, said Cherian. He believes that this will also accelerate digital marketing of the movie business.

The health scare and the shutdown of theatres by the authorities have clearly affected some good films in terms of revenue from box office proceeds. Films like Angrezi Medium and Baaghi 3 suffered at the hands of the pandemic. Baaghi 3 opened at Rs 17.5 crore net whereas it was pegged to open at Rs 26 crore. “Angrezi Medium has seen at least a 35% hit on weekend 1 in the box office collections, if not more. While it said it will release in Delhi and other markets on a later day, it would be interesting to see if people flock in as they would have on an otherwise regular day,” said Pillai.

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