Multiplexes are predicted to exceed the post-pandemic period in the first quarter of FY23. RRR and KGF: Chapter 2 are expected to generate 9,250 crores and 5,500 crores for PVR and INOX Leisure Ltd, respectively. TV broadcasters may witness flat subscriber growth and restrained advertising as consumer goods companies trim marketing costs owing to severe inflation.
Big Bollywood content was projected to perform better in Q1 FY23 but failed at the box office, affecting revenue growth for INOX and PVR, offset by regional, and Hollywood programming, said Elara Capital Ltd. Only Bhool Bhulaiyaa 2 did well throughout the period. Elara Capital forecasts box office revenue to rise 34% vs pre-covid levels (Q1 FY20). Average ticket price (ATP) and spend per head (SPH) exceeded pre-pandemic levels by 13% in Q4 FY22, spurred by Hollywood hits like Spider-Man: No Way Home, released in December 2021. ATP and SPH are expected to climb 23% and 20% over pre-covid levels in Q1 FY23.
According to Edelweiss Securities and Emkay Global Financial Services, regional language films have a vital box office. KGF: Chapter 2 is one of the highest-grossing movies, along with Vikram, Beast, and Sarkari Vaari Paata. ATP improvements should boost PVR and INOX ticket sales above pre-covid levels. Operating metrics should be constant quarter-over-quarter, with ad revenues recovering. Emkay says corporations should generate cash.
Rajendra Singh Jayla, INOX Leisure’s chief programming officer, said a few big-ticket Hindi releases might explain Bollywood’s box office slump. “Some mid-sized films may not have done well, but we’re confident of seeing actual numbers moving forward,” Jayla said, alluding to Jersey, Attack, Runway 34, Jayeshbhai Jordaar, and Anek.
Television broadcasters have challenges. Consumer goods businesses, which account for 60% of TV ad spending, have slashed ad spending due to inflation, according to Edelweiss. Other sectors have also been hit by inflation.
“On the subscription front, NTO 2.0 implementation has been delayed until November, limiting participants’ pricing power. Ad growth of 3% is predicted at Zee and 2% at SUN TV; subscription growth is expected to be flat, Edelweiss said, adding that Zee’s pullout from free-to-air TV will damage revenue.
Zee’s income is predicted to climb 3%, and SunTV’s will drop 5.1%. According to Elara, TV is the first traditional media to recover to pre-covid levels in 2021-22. Inflation has hampered ad spends’ rebound. FMCG and internet corporations have decreased ad spending on broadcasters. Star, Sony, Zee, and Viacom18 didn’t respond to Mint’s questions about ad revenues or subscriber increases this quarter. Zee and Sun TV predict revenue growth of 4.7% and 23.2%, respectively.
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