Cinema advertising to surge 30% this festive season

New Delhi: After a challenging start to the year, impacted by IPL, elections, the World Cup, and fewer blockbuster movie releases, cinema industry players are optimistic about a stronger second half of FY2025 on the back of the festive season, with even brighter prospects anticipated for FY2026.

Amit Sharma, Managing Director of Miraj Cinemas, expressed a positive outlook for the cinema advertising sector. “In quarter two, we expect advertisement spend to be a minimum of 50-80% higher than what we had in quarter one,” Sharma shared. 

This anticipated surge in ad spend is bolstered by a promising lineup of movie releases, the festive season and potential re-releases of popular films, which are expected to drive renewed interest and footfall. 

“Re-releases help keep the box office momentum going, even if they don’t draw the same enthusiasm as new titles,” he added.

For cinema players, the first quarter started on a subdued note, with April and May significantly impacted by the general elections, which spanned 44 days—the second longest in India’s history. This led many producers to delay film releases, causing a 13% drop in the number of releases compared to the same quarter last year. Additionally, the number of blockbusters sharply declined, with only three films surpassing the Rs 100 crore mark, down from seven in the previous year.

Looking ahead, Rahul Puri, Managing Director of Mukta Arts, is quite optimistic about ad revenue growth in Q2 and Q3, especially as the festive season brings a surge in footfall and increased engagement from brands looking to capitalise on the festive mood. 

He projected a robust growth rate of 25–30% compared to the same period last year, driven by heightened consumer spending during the festive season and the anticipated return of blockbuster films. 

Over the past two years, cinema advertising rates have experienced significant fluctuations. During the pandemic, rates dropped due to lower foot traffic and limited content. However, as the cinema industry has rebounded, advertisers have seen a gradual normalization of rates, particularly in FY2023 and early FY2024.

Looking ahead to the second half of the fiscal year, Puri anticipates a moderate increase in ad rates, fueled by heightened demand during the festive season and the release of blockbuster films.

He said, “While rates are still competitive compared to pre-pandemic levels, we believe the value cinema offers in terms of audience engagement justifies the current pricing, and we expect continued growth in advertiser interest moving forward.” 

Even a PVR Inox spokesperson told BestMediaInfo.com, “For Q2 and Q3, we hope that with some of the bigger releases, the advertising revenue should grow well.” 

Having said that, PVR Inox is experimenting with an ad-free viewing experience across some of its premium properties. “We had gone out and done it in eight properties across 36 screens, which accounts for roughly about 2% of the total volume of screens. The first quarter of this experiment is showing some positive signs.”

PVR Inox reported Rs 93.4 crore in advertising revenue in the first quarter of FY25, growing by 4.6% from Rs 89.3 crore in the corresponding quarter of the previous year.

As the content pipeline improves, Siddharth Bharadwaj, CMO of UFO Moviez, expects footfalls to pick up rapidly, which should lead to healthy growth in ad revenue in the upcoming quarters. He noted, “Improved content pipeline and programmatic cinema buying should improve the share of cinema investments,” highlighting the company’s strategic focus on innovation.

UFO Moviez reported a revenue growth of 11% from Rs 853 mn in Q1FY24 to Rs 945 mn in Q1FY25, despite a modest decline in advertisement and theatrical revenues during the first quarter of FY2025.

While cinema players expect a revival in H2 of FY2024, Puri of Mukta Arts highlighted the challenge of ensuring consistent advertiser confidence, especially after the fluctuations in audience attendance over the past couple of years. 

“However, with the growing number of big releases and increased consumer enthusiasm for out-of-home experiences, this is steadily improving. Another aspect is timing – aligning advertising campaigns with the right film releases and audience demographics requires careful planning. That said, we are proactively working with our partners to create tailored solutions, ensuring their messages reach the right audience at the right time, making cinema advertising a highly valuable proposition,” he added. 

Puri then went on to emphasise the significance of aligning advertising campaigns with major film releases, stating, “Timing is crucial. By ensuring that ad campaigns coincide with the right film releases and audience demographics, we maximise the impact of our advertisements.” 

He elaborated on innovative solutions Mukta Arts is implementing: “We’ve been working on integrated campaigns where advertisers can combine on-screen ads with experiential activations in the cinema lobby, such as product demonstrations or pop-up stalls.”

Despite facing challenges in generating advertising revenue due to the absence of major tentpole films, UFO is implementing innovative strategies to attract advertisers. Bharadwaj pointed out that "the absence of tentpole films/blockbusters has proven to be a challenge," but he views programmatic cinema buying as a perfect solution for addressing this issue.

UFO’s introduction of programmatic advertising solutions aims to enhance connections with cinema audiences, allowing brands to plan their cinema investments alongside digital campaigns. Bharadwaj stated, “Traditionally, cinema investments were made on blockbuster films, but now with programmatic cinema, advertisers can plan cinema investments along with digital/AV campaigns.” He added that these investments can now be “100% performance-based,” significantly reducing risk for advertisers.

On an annualised basis, Sharma noted, “Cinema ad revenue might reach closer to last year’s levels, signalling either flat growth or slight degrowth. However, we remain optimistic about the next year.” 

He expressed particular hope for the years ahead, stating, “From next year onwards, I’m very, very hopeful about the advertisement business,” highlighting a segmented release of major films that could attract large audiences.

For the record, as per GroupM’s TYNY report for the year 2024, cinema advertising is expected to grow by 15% to Rs 879 crore.