One of the biggest casualities due to the Covid Pandemic was without a doubt - The Film Screening Industry. And it looks like the amount of damage it inflicted on the business model and finances of the Industry was so understated that almost nobody saw this Mega merger happening. With INOX having 675 Screens and PVR having 871 Screens, INOX and PVR are merging together to form biggest multiplex company in India with 1500+ screens
Pandemic and the Subsequent Rise of OTT Platforms - How it crushed the Industry?
It all began in March 2020, When lockdowns began in India (and rest of the world) and in the course of 2 years, with multiple waves of virus surge, the theatres were shut for most of the time and whenever they were allowed to operate, restrictions when it comes to screening movies with limited crowd were so unviable economically for both Theatres and movie makers that it forced the film Industry to avoid theatre releases and opt for digital releases on the OTT (Over The Top) Platforms.
OTT Platforms witness Meteoric Rise - What’s Next ?
While the growth in last 2 - 3 Years was exponential due to the pandemic, Work from home culture and rising internet penetration in the Country, According to a report by the Confederation of Indian Industry and Boston Consulting Group, OTT has a 7-9% market share in India’s $27 bn M&E industry. However, by 2030, its market share is expected to increase to 22%-25% driven by the two main factors :
- Regional Content : According to a FICCI-PwC report, the share of regional language consumption on OTT platforms will cross 50% of total time spent by 2025, easing past Hindi at 45%. (Regional OTTs on the rise as native audiences demand local language content - Exchange4media)
With folks in the rural parts of the country getting more access to internet, regional content is bound to outperform Hindi and English segments.
- Democratisation of Content Creation : This is the single most factor which is leading to lot of competition and subsequently improving the quality of Content.
Mega Merger of PVR & INOX - Timing is really Interesting ! (Some Observations)
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My initial reaction to this news was - Dude, With pandemic coming to an end, The Film Screening business for the coming years was bound to grow with people missing the experience of watching movies on the big screen, so during the time, when the growth is going to be massive, why would the largest businesses in the industry merge ?
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Frankly speaking, I’m not yet sure whether this move is coming from a position of strength and opportunity ( potential growth in mass audience viewing due to pent up demand, rise in luxury segment) or is it coming out of a position to defend itself from the ever rising threat from OTT and other digital platforms.
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With this deal finalizing, PVR and Cinepolis India deal must be certainly off the tables now as this was the talk in the street till recently.
- Whether the timing is right or not, Time will be the best judge for that. But, one thing is for sure ,It definitely has helped the companies and its share prices in the short run
- And finally, The Question that the nation wants to know - Will the Popcorn prices increase or remain the same?
I personally I’m not a big fan of movies (I do watch them, but not a serious fan) , So, would love to hear more on this news and about film Industry business in detail who are movie buffs here. @MarginCaller and other folks…eager to hear from y’all.