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MUMBAI (Reuters) - India’s world famous Bollywood film industry is reining back its production over the next two months to avoid a clash with the Cricket World Cup being played in the country.
The World Cup is expected to prompt people to flock to the stadia or tune their television sets to sports channels, leaving general entertainment channels with fewer viewers and cinema chains with smaller audiences.
“For a multiplex, every show is a perishable item, so if they don’t use the multiplex screen for that three-hour period to the fullest, they lose ... It’s like flying an empty plane,” said a Mumbai-based analyst who did not wish to be named as he is not authorised to speak to the media.
The World Cup will be held from February 19 to April 2 and is being co-hosted by India, Sri Lanka and Bangladesh.
The March quarter is a seasonally weak one for theatre chains such as Inox Leisure <INOL.BO>, PVR Ltd <PVRL.BO> and Cinemax <CIMA.BO> due to most school and university examinations being held during that time.
This year the World Cup is likely to make the quarter even weaker as production houses delay movie releases.
This year there are 23 films lined up for the months of February and March as compared to about 30 during the same period last year, with just a handful of them featuring big stars such as Priyanka Chopra and Akshay Kumar.
“We have consciously planned all our big film releases post April due to the World Cup,” Kamal Jain, Chief Financial Officer at Eros International Media Ltd <EROS.BO>, said. “It can affect viewership and we don’t want to take any chances.”
Sunil Punjabi, chief executive at Cinemax, said the multiplex chain expects occupancy levels to drop to about 23 percent from the usual 26-27 percent during the World Cup.
The World Cup is expected to boost the available advertising revenue for print and electronic media.
“However, general entertainment channels would have pressure on the ad revenues as major portion of ad spend have been diverted to sport channels, ESPN STAR and SET MAX,” Emkay analyst Naval Seth said in a research report.
Advertising revenue from both the Cricket World Cup and the fourth season of the Indian Premier League is estimated to be at 17.5 billion rupees ($619 million), the analyst said, citing industry estimates.
Hotel chains, already in the middle of a boom due to corporate demand, are eyeing higher bookings as fans from across the globe line up to watch the World Cup, spread over several Indian cities including key metros.
Many customers have even been put on the waiting list as rooms in some regions are fully booked, hoteliers said.
“Will we all have a better February than last year? The answer is yes. Fortunately, the World Cup is in February. And February is a classic full-up month,” said Rattan Keswani, president of Trident hotel chain, over the telephone.
EIH <EIHO.BO> operator of the Oberoi and Trident chains, expects occupancy levels in February to range in the “high nineties” (90 percent) due to a likely demand boom from corporates and on the cricket World Cup.
International hotel chain Marriott <MAR.N> expects occupancy across properties in India to be over 80 percent compared with mid-70 percent levels a year ago, as demand for rooms rise on higher corporate demand and the World Cup.
Airlines, which generally see a weak March quarter, as students and youngsters stay at home for the exam season, expect a moderate boost due to the sporting extravaganza.
The fourth quarter is “traditionally lower but this year we have the Cricket World Cup which will induce some buoyancy. So the final load factors are expected to be better than the typical Q4 load factor,” said Sudheer Raghavan Chief Commercial Officer at Jet Airways <JET.BO>, India’s top private carrier.
Kaushik Khona, chief executive at unlisted GoAir said the airline expects a small increase in traffic with better load factors as compared with last year, adding overall loads would be “above eighties”.
