Will the multiplex industry make a comeback?
Will the multiplex industry make a comeback?
Hello doston, Angel Broking ke iss podcast mein aapka swagat hai.
In this podcast, we will discuss whether multiplexes will make a comeback or not.
Jab Covid-19-related restrictions shuru huye in early 2020, cinema halls and multiplexes were some of the first places to be locked down. Reason simple tha – there was no way social distancing could be maintained because of the close proximity of the seats. As movie goers, humne kafi suffer kiya kyuki we missed out on watching some good movies on the big screen last year. Lekin cinema halls band hone ki humse badi victim thi multiplex industry.
Let’s look at the losses, shall we?
From March till October in 2020, kisi bhi multiplex mein ek bhi show play nahi hua. Can you imagine the magnitude of the loss faced by the industry? Credit rating agency CRISIL ne April mein ek report mein kaha, "Multiplexes are set to log operating losses for the second straight fiscal as localised lockdowns, night curfews and other restrictions to contain the resurgence of coronavirus infections will keep occupancies low for the next few months."
Occupancies ka matlab hai the percentage of seats in a cinema hall jinke liye tickets khareedi gayi thi. Although multiplexes 50% capacity mein dheere dheere khulne lage the, the number of tickets bought were only 12-13% in the March quarter. Sirf break even karne ke liye, multiplexes mein at least 18-22% capacity expected thi. According to CRISIL, multiplexes ki full capacity FY23 mein hi achieve hogi.
Lockdowns ka impact India ke sabse bade multiplex companies pe kafi severe raha. To give you a clearer picture - PVR aur Inox Leisure ki revenues 92-94% drop huye on a year-on-year basis. But what about their stocks and the effect on shareholders?
In May, when the second wave was ongoing, PVR ke shares ki value Rs 718 tak drop hua aur Inox Leisure ki value Rs 158 tak. Lekin in shares ka price rise hua when PVR was priced at Rs 1,398 and Inox Leisure at Rs 321 in June. What was the reason behind this rise? Kya multiplexes ka future promising hai?
Is question ko answer karne se pehle, let’s consider some other factors, jinka impact multiplex industry ke liye significant hai – jaise OTT platforms.
Rise of OTT
Online streaming platforms ya OTT platforms pandemic se pehle hi popularise ho rahe the. But when the lockdown happened and we were forced to stay indoors, inka use significance badh gaya. Naturally, there were already some concerns about the impact of OTT on cinema halls. Lekin pandemic ke aane se ye aur aggravate ho gaye.
OTT platforms ke sath aap ghar baithe new releases dekh sakte hain. And when multiplexes were shut, filmmakers apni films aur web series in platforms par release karne lag gaye. This meant ki multiplexes – jo already pandemic-related restrictions ke saath struggle kar rahe the – ab OTT platforms se bhi competition face karenge.
Netflix, the uncrowned prince of OTT platforms, has more than 200 million subscribers worldwide. Netflix ki growth lockdowns ki wajah se skyrocket hui thi. Is OTT platform ki superior content quality aur lockdowns ne Netflix ki growth mein kaafi contribute kiya hai. In fact, because kayi badi films Netflix pe release hoti hain, is OTT giant ka influence badhta ja raha hai.
Will multiplexes come back?
Pandemic aur OTT se competition ke wajah se multiplexes ke prospects gloomy lag rahe hain, isn’t it? But multiplex companies ke shares kyu rise ho rahe hain? What is driving them to recover when the COVID-19 situation is the same and more and more people are adopting OTT? Iske liye kayi saare reasons hain.
India mein vaccination drive kafi tezi se chal rahi hai. Abhi tak 41 crore vaccines administer ho chuki hain. Vaccines protect you from developing severe symptoms of COVID-19 when you have been exposed to the disease, jiski wajah se is disease ki severity kam ho jati hai. Thanks to this, movie goers mein multiplexes mein nayi releases dekhne ka confidence badh gaya hai. As more and more people get vaccinated, economy bhi aur khulne lag jayegi. Investors expect kar rahe hain ki agle 2-3 saal mein, as the pandemic declines, these shares will go up. This is a reason why investors ye shares itne enthusiasm se khareed rahe hain.
2. Single-screen theatres
India mein single-screen theatres band ho rahe hain because of the COVID-related restrictions and the fact ki unke paas display karne liye content nahi hai. As a result, multiplexes ka market share increase ho raha hai. Investors ka maanna hai ki is market share ke increase hone se multiplexes ki growth bhi increase hogi, jis reason se woh inn shares mein invest karna chahte hain.
3. Pent-up demand
Doston aapne bhi socha hoga - jab COVID cases kam honge toh aap woh wali movie dekhne jaoge. Multiplex mein baith kar movie dekhne ki desire pent up ho chuki hai. Isiliye, investors aur analysts ka manna hai ki jab multiplexes khulenge, theatres mein footfall increase hoga. Film producers bhi achcha content release karne ke liye theatres ka full-swing mein khulne ka wait kar rahe hain. Jab achchi movies big screen par release hongi, audiences dekhne ayengi hi. This expected rise in the number of cinema-goers explains ki investors ye stocks kyu khareed rahe hain.
Judging by the present outlook, multiplexes ka comeback aane wala hai – although it is likely ki wo FY23 mein ayega. Of course, there are many forces jo is process mein hurdles daal sakte hai - such as the rise of OTT platforms. But, the confidence that analysts have in the audience’s desire to return to the big screen and the quality of content is strong. So yes, perhaps it’s safe to say – multiplexes ka comeback expected hai.
Jaane se pehle, ek baat yaad rakhiye ga ke stock market investing mein risk hamesha rahega. This podcast has been made for educational purposes only and the investor must do his own research as well.
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