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Cinema advertising may see a V-shaped recovery, will touch pre-Covid levels in next fiscal: Industry leaders

With movie halls being allowed to operate at full capacity and Covid-19 vaccination catching pace, the industry hopes cinema advertising will get back on track. With the release of big-ticket movies such as Sooryavanshi, 83 and Radhe, audiences will have an eyeful of reason to be at the theatre

Image courtesy: The Quint

In terms of advertising mediums, cinema advertising was the biggest casualty of 2020. Things, however, are expected to get back to normal for the medium as early as next fiscal as India has already flattened the Covid curve and vaccination is catching pace.

Cinema advertising experienced de-growth of 85% approximately. 

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A cinema-distribution network owner (who doesn’t wish to be quoted), said the complete re-opening of halls throughout the country will still take a few weeks. And since brands have been itching to go back in action, they will soon start with advertisements, leading to a V- shaped recovery. 

Overall, cinema advertising in India is in the range of around Rs 1050 crore. Before the pandemic, the medium was growing at around 15-20% year on year.

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“Everyone seems to be more confident now (after the government order to allow halls to operate at full capacity). You can’t keep away audiences from the big screen. Although, to reach pre-Covid levels, it is going to take a quarter. It will be very fast once it starts gaining enough traction and then there will be V-shaped recovery,” he said.

Deepak Kumar

As the consumer gets back to the theatre, Deepak Kumar, Director, Hyperspace, said advertising will move back to pre-Covid levels in a couple of months’ time. Just like how with cinema hall reopening in Chennai and with the release of ‘Master’, advertisers were quick to lap up the opportunity.

Gautam Dutta

According to Gautam Dutta, CEO, PVR, these factors will collectively usher in great prospect for the resurgence of footfall in the coming months and quarters.

“With release announcements in the offing, footfall will grow exponentially m-o-m. We anyway are conspicuously warming up on footfall every passing month as we have been scaling up our operation capacity. At present, we are already operational with 85-90% cinemas. January was very encouraging in terms of footfall as there were big releases from the South. National occupancy comfortably settled around 23% on installed capacity whereas South displayed a stellar performance with 48-50% occupancy overall,” he said.  

Rahul Puri

“Advertising in cinemas has always had great potential and has been one of the major contributors to the  P&L. Advertising revenue will definitely see a positive graph after the 100% occupancy announcement but major contribution will come in when there is good content,” said Rahul Puri, MD, Mukta A2 Cinemas.

Consumer surveys during the shutdown phase fairly showed movie-goers have full faith on stringent SOPs being pronounced by the multiplexes and a considerable pent-up demand in the audience.  

With this pent-up demand direly in need of a vent, Dutta sees the government decision as a big silver lining in the horizon of the cinema advertising business. 

While he sees a huge scope for ads as advertiser count and the volume of business will scale up substantially in the coming months, with more new content releases and footfall (cinema reach) going up aggressively, he said the trajectory looks buoyant from mid-March as business is gearing up substantially on all fronts.

“As we know ‘if winter comes, can spring be far behind?’ The future resilience of cinema advertising business in India looks so strong,” he said. 

Advertisers are persistently seeking newer mediums, higher reach and different forms of engagement to get higher SOV and.to de-risk clutter. Acceptance of cinema advertising is fast growing among advertisers as brand count is growing at a rapid pace. 

“People have missed the big screen experience and we will definitely see new brands using this medium to advertise their products,” Puri said, adding the medium may grow by 10% in terms of revenue in 2021 as compared to 2019.  

Newer categories to lead advertising growth 

An industry spokesperson said newer categories born last year will advertise with keen interest.

While the decision is certainly a harbinger of hope and augurs well for the entire exhibition industry and for all stakeholders in the value chain (exhibitors, producers, distributors, advertisers, media agencies), experts believe brands across categories will start pouring in once there is visibility in content pipeline from production owners. 

Advertisers can’t stay in a semi-denial mode for long keeping in view certain factors such as booming box-office and higher footfalls in multiplexes year on year. Unequivocally better and richer content emerging in cinema with passing time, prolific growth of regional cinemas and bullish growth of screens across tiers of cities catering to bigger universe with higher OTS (opportunity to see) also matter, Dutta said.

Today, cinema collectively provides a cumulative reach of 103 crore of India’s population (unique reach being 30-35 crore approx.).

He said, “We would be touching pre-Covid levels (or marginally higher) in 2022. However, if we compare on the basis of FY (April-March), then FY21-22 is when we see our space almost nearing the pre-Covid levels (albeit marginally less). Also, considering the aggressive boost of the Budget, we are fairly hopeful of breaking the inertia and the economy back in action once again.”

Cinema is a staple entertainment diet of consumers in India and offers captive audiences and engagement opportunities.

While regular cinema advertising clients would come back, Kumar said it will surely attract a newer set of clients as well.

“We would see a jump in ad spends over earlier years as all big releases scheduled for the last year are queued for this year. This means we will see far more opportunities this year. Big action will start with Sooryavanshi followed by 83 and Radhe. So this year, consumers will have an eyeful of reason to be at the theatre,” he said.

“People are excited and waiting to go back to their favourite entertainment medium. It should only help brands to decide to come back to cinemas, firm and final,” Puri said. 

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