Indian other industries and started making losses very soon

Indian Film Industry
was also affected very much like other industries and started making losses
very soon from the implementation of demonetisation. During demonetisation
around 3-4 films were supposed to release but were postponed due to this sudden
event.

The sole reason for
film industry to get affected was due to the cash crunch which movie goers were
facing. Most of the movie tickets which costed around Rs 200-300 for an average
Friday weekend movie shows were not sold due to the unavailability of Rs 100
and Rs 500 notes. Several ground staff like camera person, technical staff were
either fired or paid late due to this.

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Demonetisation
negatively impacted revenues of mostly single screen theatres and especially those
in 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 went
down by 15-20%.

Digital Payments
were still an ongoing problem for theatres and especially single screens.
However, multiplexes suffered a lesser impact on revenues as compared to single
screens because digital payments like Paytm, Mobikwik contributed to around 40%
of the overall ticket sales.

A lot of discounts
and offers on movie tickets via digital payments were introduced during that
period to lure customers, which most of the multiplexes managed to do so as
they saw their cashless revenues increasing by around 10% for the following two
months. According to the FICCI – KPMG report on Media and Entertainment
industry, Inox Leisure’s cashless transactions increased by more than double at
concessions and by 80-90% at ticket sales.

Demonetisation also
took a toll on good content movies which soared a lot during the early weeks on
demonetisation. During the Demonetisation week, Rock On 2 and Force 2 were
released which tanked hard at the box office. Both the movies were good rated
by most of the critics, however the movies couldn’t perform well. With this, a
lot of films were just released in limited single screens as they caused heavy
losses to the films. Movies like Kahaani – 2 and Dear Zindagi were released in
limited screens.

According to the
FICCI – KPMG report, Regional movie markets were impacted more than Bollywood
because of major transactions for film financing occurring in cash. Also, some
of the film projects in South were stalled for a period upto a month due to
lack of cash flow. In
South, more than 30 movies were postponed or unreleased due to demonetisation.

Sanjay Dwivedi, CFO
of Balaji Telefilms said, “There was slowdown post demonetisation, as in other
sectors of economy.Since the industry is by and large unorganized,
demonetisation helped us to move to cheque / bank transfer from cash payments
for wages and other payments.” He also mentioned about the problems with GDP
Quarters and the Quarter results for that period. “Demonetisation affected the
Q3 Results FY17 which fell by around 30-40%. Also, the subsequent GDP growth
for the industry was impacted,” he added.