Indian Film Industrywas also affected very much like other industries and started making lossesvery soon from the implementation of demonetisation. During demonetisationaround 3-4 films were supposed to release but were postponed due to this suddenevent. The sole reason forfilm industry to get affected was due to the cash crunch which movie goers werefacing. Most of the movie tickets which costed around Rs 200-300 for an averageFriday weekend movie shows were not sold due to the unavailability of Rs 100and Rs 500 notes. Several ground staff like camera person, technical staff wereeither fired or paid late due to this. Demonetisationnegatively impacted revenues of mostly single screen theatres and especially thosein tier 2 cities.
The sales revenue was hit by 20-25% in the first week itself.The demonetisation effect gradually diminished in the coming weeks and wentdown by 15-20%. Digital Paymentswere still an ongoing problem for theatres and especially single screens.However, multiplexes suffered a lesser impact on revenues as compared to singlescreens because digital payments like Paytm, Mobikwik contributed to around 40%of the overall ticket sales. A lot of discountsand offers on movie tickets via digital payments were introduced during thatperiod to lure customers, which most of the multiplexes managed to do so asthey saw their cashless revenues increasing by around 10% for the following twomonths.
According to the FICCI – KPMG report on Media and Entertainmentindustry, Inox Leisure’s cashless transactions increased by more than double atconcessions and by 80-90% at ticket sales. Demonetisation alsotook a toll on good content movies which soared a lot during the early weeks ondemonetisation. During the Demonetisation week, Rock On 2 and Force 2 werereleased which tanked hard at the box office. Both the movies were good ratedby most of the critics, however the movies couldn’t perform well. With this, alot of films were just released in limited single screens as they caused heavylosses to the films. Movies like Kahaani – 2 and Dear Zindagi were released inlimited screens. According to theFICCI – KPMG report, Regional movie markets were impacted more than Bollywoodbecause of major transactions for film financing occurring in cash.
Also, someof the film projects in South were stalled for a period upto a month due tolack of cash flow. InSouth, more than 30 movies were postponed or unreleased due to demonetisation. Sanjay Dwivedi, CFOof Balaji Telefilms said, “There was slowdown post demonetisation, as in othersectors of economy.Since the industry is by and large unorganized,demonetisation helped us to move to cheque / bank transfer from cash paymentsfor wages and other payments.
” He also mentioned about the problems with GDPQuarters and the Quarter results for that period. “Demonetisation affected theQ3 Results FY17 which fell by around 30-40%. Also, the subsequent GDP growthfor the industry was impacted,” he added.