Jawan, Gadar 2, RRKPK and more: Blockbusters revive cinema ad revenue

The ad revenue for many cinemas and multiplexes has returned to 100%, and the momentum is expected to grow on the back of the festive season, say industry leaders.

In an unexpected turn of events for the year 2023, audiences have been flocking to cinemas week after week, a stark contrast to just last year where  phrases like 'Bollywood is dead' and 'Boycott Bollywood' dominated headlines.

2023 appears to be a revival year for the film industry, courtesy of a string of blockbuster release back to back such as ‘Rocky aur Rani ki Prem Kahani’, ‘OMG 2’, ‘Gadar 2’ and ‘Jawan’ - all of which have have hit it out of the park and struck a chord with audiences. Their success has brought much-needed relief to the film sector which was still struggling under the double whammy of covid and the spread of anti-bollywood sentiment. 

The overall revenue of various cinemas has grown significantly, and this trend is expected to continue, driven by the festive season and a slate of highly anticipated films like ‘Tiger 3’, ‘Salaar’, ‘Animal’ and ‘Dunki’. 

According to Gautam Dutta, Co-CEO, PVR INOX, with the festive season knocking at the door, they can comfortably anticipate further scalability in Q3, surpassing the growth of the previous quarters.

“The festive quarter of October-December has some big releases lined up which would be able to sustain the momentum that has already been generated with consumers preferring to opt for the out-of-home entertainment social experience of cinemas,” says Dutta.

Advertising revenues scale at cinemas

The film industry was among the hardest-hit sectors during the pandemic. An Ormax media report estimates that the industry lost approximately 2.4 crore moviegoers due to the COVID-19 pandemic, resulting in a significant loss for the advertising revenues of the theatre and cinema businesses which are directly proportional to the footfalls.

However, the success of high-profile releases has not only attracted audiences but also brought advertising revenues back into the business. Devang Sampat, CEO, Cinepolis India says that currently, the advertiser interest is significantly higher, close to 100% more than the last quarter.

Dutta from PVR INOX adds, “Festival time is important for brands to boost sales as public spending is at its highest. There are new releases and big budget movies lined up and we have already seen advertiser interest build up considering the added reach of PVR INOX cinemas in 115 cities.” 

He says with the commencement of Q2, the advertisement trajectory gained momentum considerably thanks to some good content hitting the big screens (e.g. Oppenheimer, Barbie, Rocky aur Rani, Gadar 2, OMG2) and successfully captivating audience on a wider scale. 

Siddharth Bhardwaj, CMO, head of enterprise sales, UFO Moviez- an in-cinema advertising and digital cinema distribution network, notes that legacy advertisers initially stayed away from advertising in cinemas due to pandemic-related uncertainty. However, new categories like fashion, retail, and luxury brands capitalised on the post-covid 'revenge buying' trend, supporting cinema through advertising.

He anticipates that more advertisers will include cinema in their marketing plans with the availability of quality content, expressing optimism for the future.

Speaking about the company’s post-pandemic revival, Bhardwaj says, “If you look at the last two months of revenue, we are very close to pre-pandemic levels of revenue. Going forward, if the same run rate goes, we are optimistic of delivering a very respectable revenue.”  

According to a Statista report, the cinema advertising revenue is set to grow and pass pre-covid levels soon. The revenue generated from in-cinema advertising across India amounted to over ten billion Indian rupees. This is estimated to shoot up to almost 19 billion rupees by the end of fiscal year 2024, indicating a steady growth.

The ‘Jawan’ factor 

Advertising heavily depends on footfall, a critical factor for brands when they consider advertising in cinemas. In 2023, Hindi films have delivered remarkable performances, regional films have shown resilience, and strong Hollywood film releases have contributed to this robust content lineup. Consequently, advertiser interest has been rekindled, and there is renewed confidence in the effectiveness of in-cinema advertising, which provides an unparalleled audio-visual experience for consumers, Dutta states.

Shedding more light on what Jawan's success brought to the business, Dutta adds that the opening week of Jawan has generated the highest revenue since operations resumed post-covid. He says the ad revenue clocked during the opening week of Jawan  was 230% more than the average opening week ad revenue clocked by any blockbuster in 2023, even surpassing that of SRK's last blockbuster, 'Pathaan,' by 143%.

Bhardwaj adds that the effect of one movie often rubs off on another. He says that sometimes all audiences need is a push, as movies like Jawan have offered. He further notes that it's not necessary to have a 300-400 crore movie every week, but maintaining a steady stream of decent movies and occasionally featuring a major release every couple of months ensures a consistent flow of audiences to the theatres. This, in turn, instils confidence in advertisers to incorporate cinema as a component of their marketing strategy.