Reliance Industries chairman Mukesh Ambani’s Monday announcement of releasing new films on the home platform along with theaters caused panic in the movie theatre business, with the two listed firms in the sector — PVR and Inox Leisure — responding to their shares tanking on the development by issuing statements expressing confidence in the theatrical exhibition segment in the country.
RIL-owned Reliance Jio (RJio) disrupted the mobile services market two years ago with cheap data offerings, and Ambani said that premium customers of the firm’s home broadband service Jio Fibre, will be able to watch movies in their living rooms the same day these movies are released in theatres starting mid-2020.
On Tuesday, shares of Inox Leisure ended trading at Rs 288.05, down 4.2 per cent from its previous close on the BSE, while those of PVR, India’s largest multiplex chain, fell 4.1 per cent to end at Rs 1,406.15.
Inox Leisure pointed out that producers, distributors and multiplex owners in India have mutually agreed to an exclusive theatrical window of eight weeks between the theatrical release of a movie and release on any other platform.
“This exclusive theatrical window is a model that is followed internationally, in order to ensure the robust financial viability of all the segments of the sector, and has been replicated in India,” said Inox Leisure, which operates about 600 screens across in India.
The producer of the film is the owner of the creative content, and is, therefore, entitled to choose the platform for distribution and consumption of his content, Inox Leisure added in its regulatory filing.
“However, in view of this mutually-agreed exclusive theatrical window, he (the producer) would have to choose between theatrical exhibition or release on any other platform, since release on both simultaneously would breach the mutually-agreed exclusive theatrical window,” the filing added.
“Both these experiences have co-existed and prospered for decades and will continue to do so in future,” PVR, which operates 800 screens across the country, said in a filing to BSE. PVR added that it is extremely buoyant about cinema exhibition’s growth prospects, further pointing out that the cinema exhibition business will continue to expand its footprint over the next multiple years given India’s low-screen density and the growth potential it offers.
“For decades, theatrical release window has been a valuable model for exhibitors and producers alike. In India and globally, producers have respected the release windows and kept a sacrosanct gap between the theatrical release date and the date of release on all other platforms, i.e. DVD, DTH, TV, OTT etc. Cinemas continue bringing people together to share a communal experience. This irreplaceable element which is at the core of theatrical experience continues to deliver a robust box office performance not just in growing market such as India but also in the more matured markets such as USA, China, Europe etc, where cinemas have regularly competed with many similar initiatives, e.g. Netflix original movies etc,” PVR said in its statement.
After its launch in September 2016, RJio offered lowest-priced data and voice packs in India, leading to a financial crisis for incumbent telecom operators. This set into effect a series of mergers and acquisitions in the country and the consolidation concluded with only three private players in the sector.