Anil Ambani’s Studio Eyes Cinema Earnings to Recoup Covid Losses
(Bloomberg) -- One of India’s largest film studios is holding back the release of its big, long-delayed Bollywood features, betting that movie halls will reopen by year-end and help resuscitate the hard-hit industry after months of closures due to Covid-19.
Reliance Big Entertainment Pvt., which has collaborated with Steven Spielberg and is owned by embattled tycoon Anil Ambani, is hoping to release two Hindi-language films in theaters in the next three months, Chief Executive Officer Shibasish Sarkar said in an interview. Theatrical debuts of “83” -- charting the journey of India’s cricket world cup victory in the title year -- and the action flick “Sooryavanshi” have been pushed back multiple times since 2020.
“There’s almost one and a half year of pipeline that’s blocked -- it has completely dried out the capital of the industry,” Sarkar said. “I’ve got attractive offers from the digital platforms, but I’m still holding out for a theatrical experience because the directors and actors are striving to get it released on a larger screen.”
The decision to wait out the pandemic-led closures underscores the financial clout of the box office in India’s film industry that’s already feeling the cash crunch. Most Indian state governments are yet to set a date for cinema re-openings as concerns mount over a potential third wave of infections amid a slow vaccination campaign.
While Reliance has recently released four films on streaming platforms, Sarkar said cinema screenings continue to account for at least 60% of industry earnings. This revenue stream was choked when the pandemic forced the country into repeated lockdowns and home-bound viewers binged on content from streaming platforms, including Netflix Inc. and Amazon.com Inc., which have been pushing aggressively into India with cheap packages.
India’s streaming market is expected to grow 31% from 2019 to 2024, with revenues reaching $2.7 billion, according to consultancy PwC, while cinema revenues will contract 2.6% in the same period.
But Sarkar’s hopes that film exhibition will soon turn the corner are shared by others. “Globally a pent-up demand for theatrical exhibition of movies have been witnessed, evidenced by record breaking box-office collection in countries where theaters have been allowed to open,” Ajay Bijli, chairman of PVR Ltd., India’s biggest cinema operator, said during an earnings call last month.
Sarkar, who has previously worked for ViacomCBS Inc., is bullish enough on the sector’s prospects to front efforts to raise about $200 million through a special purpose acquisition company that intends to list on Nasdaq this month and acquire Indian media, entertainment and tech firms.
Alongside the pandemic challenges, the film industry is also facing the Indian government’s move to allow retrospective censorship, even though Indian flicks have for decades submitted to pre-release state approvals. Last month, a group of more than 100 prominent filmmakers and actors signed a letter protesting the proposed law.
Previously unregulated digital platforms are also facing stricter scrutiny now. For instance, “Tandav,” an Amazon-aired political thriller, had to be re-edited following protests over its depiction of Hindu gods and goddesses.
“It’s a very touchy point,” said Sarkar, adding that while writers and creators may feel restricted with these rules, as a producer he would prefer a clear guideline over uncertainty. “I don’t want to make a complete show and then get into a court. It’ll probably help at least to know the boundary.”
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