Bollywood box-office performance has further deteriorated over the last two months, Emkay Global Financial Services said in a research note.
Poor content performance is largely underscored by deprecatory critics’ reviews and social media influence, it said.
“We maintain that content quality has superseded star power which is evident in the recently-released movies being a letdown. On the other hand, regional and Hollywood movies (a slew of releases) continue to do well, partially offsetting the weak Bollywood performance,” the report said.
After a successful Q1FY23, overall box-office collections have meaningfully tapered, with mega-budget movies performing poorly in Q2FY23 owing to weak content.
With regard to content, while Bollywood has seen a trough in the past, it is witnessing deterioration in movie-collections again this time round. Going ahead too, while the movie pipeline looks healthy, audience acceptance is key. If Bollywood content performance continues to be poor, then it would lead to further cut in earnings as well as de-rating for PVR and Inox, the report said.
Sub-par content quality is being rejected by audience. The report said that Bollywood content has been sub-par, pushing audiences to switch to other languages and mediums of entertainment. Critics’ reviews and word-of-mouth communication, which play a major role in box-office collections beyond the first week, have been negative-to-mixed for most movies released since the end of the pandemic.
Thus, most movies have even struggled to recover the cost. A mega-star cast, which was able to pull audiences to theatres, is now no longer effective as weak content has become the decisive factor. The first weekend net box-office collections for movies with prominent stars are getting restricted to less than Rs. 400 mn now vs pre-Covid levels of Rs. 1,100 mn on an average.
Most current & potential (in the next 1-2 quarters) movie releases were conceptualised pre-Covid or during the Covid period. Gauging consumer behaviour, consumption habits seem to have changed and content needs to evolve accordingly, to pull them back to theatres. Poor content has been accentuated by social media influencing as well. Additionally, the inflationary scenario has raised the cost of movie-going, which has increased content-quality filtration by patrons, the report said.
Regional cinema has been the major driver of box-office collections post Covid. Regional content with positive/strong reviews has also received acceptance from Hindi-speaking markets. We believe this has been the silver lining in the last six months, though it may not sustain ahead, as Bollywood would remain the mainstay for collections in the non-South markets.
Majority of Bollywood movies released directly on OTT over the last two years have also got mixed-to-negative critics reviews and fairly low YouTube trailer views (vs movies released directly in theatres). This clearly points to the sub-par content and not to consumers being averse to returning to theatres, the report said.
Covid has been a critical catalyst in increasing acceptance of OTT platforms with in-home content consumption. Shorter content windowing also played spoilsport (to some extent) for patrons fully returning to cinemas. Now, when the impact of Covid has receded, sub-par content performance is causing consumers to deviate from cinemas, towards OTT content.