Omicron inflicts Rs 1,500 cr revenue loss on film industry

Having gone through the excruciating struggle during the first and second pandemic waves, the film industry was banking heavily on the big-ticket releases like Ajith’s Valimai, Rajamouli-Junior NTR-Ram Charan combine’s RRR and Prabhas’s Radhe Shyam, all of which were slated for January release, to script a much-needed comeback. But what they did not expect was the Omicron-fuelled third wave that has come as a twist in the tale, robbing them of a whopping Rs 1,500 crore – of which Rs 500 crore is feared to be irrecoverably lost.

Being mainly dependent on theatrical releases, the industry was eagerly awaiting these three mega projects, calculating that they would be able to fetch a gross box office collection of Rs 1,000 crore in January alone. But postponing their release due to the rising third wave meant a huge loss of revenue, say industry veterans.

“Out of the estimated sum, the gross box office collection of Rs 1,000 crore is recoverable once these films release on a later date. However, the interest rates for the production cost of these films are quite huge. RRR’s interest rate alone would roughly be around and over Rs 200 crore and so is Radhe Shyam. This has dealt a huge blow. The loss in BO collection can be termed as an opportunity loss. We are hoping that the situation gets better soon, as theatres will see crowds when cases reduce,” says producer-distributor Dr G Dhananjayan.

Last year, it was Vijay’s Master that brought people back to the theatres even in the middle of the pandemic. The distributor of the film, Lalit Kumar of Seven Screen Studio, who has three films under his belt this time around, is uncertain where he would release them – theatres or OTT. “We producers are uncertain as the future too is vague. When RRR release was postponed, I knew the producer’s pain and the economics behind it. Before the advent of OTT, theatres were only avenue. [If that were the case today], producers have gone extinct. OTT is a safe option in such times,” he says. However, he adds, OTT is a viable option only for big releases. “Just like theatres, OTT platforms too are eyeing for films with star value. If it is a small film, they need hard-hitting content. Hence, we need to wait and analyse the situation properly before deciding whether to give a film to theatres or OTT.”

Meanwhile, even as they termed the decision to postpone the releases to be a sensible one considering the rapid rise in COVID cases, theatre owners feel that these films could have gone on to become huge successes despite the 50 per cent can on occupancy.

“In the last three years, even before the pandemic struck, the national average occupancy of theatres was between 30 and 44 per cent. So, the 50 per cent limit on occupancy was actually blessing for theatre owners. Producers chose to postpone the films only after night curfews and full lockdown on Sundays were announced. Or else, a big film like Valimai was good to release,” opines Ruban Mathivanan, managing director, GK Cinemas in Chennai.