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COVID 19: Impact On Multiplexes

COVID 19: Impact On Multiplexes
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It has been more than 2 months since the nationwide lockdown was declared. This pandemic has truly changed our lives for better and worse both. Better that we have started appreciating nature. We are spending more time with our families. Also, we are working on our hobbies and skills. Worse in a way that economic development is a slump. Businesses are shut. The routine life is disturbed and we all are mentally deprived. There is hardly any entertainment left in our lives. All that we do is just binge Netflix and Amazon Prime. Many needy individuals are also facing economic hardships. Amidst this, the multiplex cinemas have their own sad stories. They too have faced the impacts of this pandemic. Much of it is very apparent. This includes limited audiences, not much revenue, etc. All of these are mostly negative. Let’s see in detail what all woes they are facing!

Liquidity Crunch

Now this one is a major impact on multiplexes. They all have lost their cash. Liquidity is basically cash in hand or any such item easily converted to cash. It is a term widely used in Macroeconomics to understand such related dynamics.  Since all the cinema halls were closed down, where will they earn from? Literally, they have nothing left. Obviously, this is a genuine problem. More than that, they have to pay their employees and meet other expenses too.

This means they have to pay the electricity costs, land rents and manpower too. Whenever in Economics, the liquidity falls zero, the consequences are severe. No liquidity is a situation of no cash in hand which ultimately means no way to meet the expenditure. Obviously the multiplexes are trying hard to get loans from the government, yet it is all in vain. This limited cash flow is all due to no cash spending by the customers. 

And where will customers spend from, when their salaries are being cut down? So it’s a whole vicious chain indeed! Isn’t it?  

According to The Economic Times, with 1-month closure of multiplexes the total losses they suffer are around Rs 30-35 Cores. 

It is a big figure. This may certainly pave a way for multiplexes to lose it all and becoming bankrupt in the future. 

Bollywood Industry  Losses 

Who goes to the multiplexes? What does one watch there? Obviously common people go there. And one mostly sees Bollywood movies. But the situation is reversed now. The Cinema halls are completely closed. According to sources, there was a 30% drop in people coming to cinemas initially. This was a time when the initial phase of lockdown was there. Now there is hardly any movement to cinemas.

Well, this is an interlocked chain. Multiplexes and Box office are interrelated to each other. 

Multiplexes will work only when movies will there to flash in screens. And movies will work through multiplexes. Now since all the cinema halls are closed, how will Bollywood movies get released and work? 

This has even put Bollywood to losses. There are many big names in Industry that got affected by this. In fact, many big releases starring good cast have been put on hold. One of the movies is the high budget: Sooryavanshi. The movie has Akshay Kumar in its star cast. Now the producers have rescheduled the release date of it. Similarly, the Indiana Jones series which is though a foreign one is again put on hold. The movie Brahmastra was on its way to release. It is starring Ranbir Kapoor and Alia Bhatt. Yet it’s all on hold. This means due to the clampdown on Cineplex Industry, Bollywood is going to suffer a lot. Because the number of footfalls is where they earn from.

What a bad luck! 

Effect on Employees

When you go to the multiplexes, you obviously get a range of services from there. Firstly, it is, of course, the movie that you watch. Then there is the popcorn shop over there too. Then the ice-cream parlor is available over there as well. Apart from this, there are restaurants, vendors, sellers too. You will also be there in an air-conditioned hall. Excluding them, there are the people who work behind the big screens. They are people who play movies etc. 

All of them are now jobless. 

This is a very pitiable situation. According to the Economic Times, the Delhi- UP circuit of multiplexes is a good revenue yielder. It yields around 18% of the overall box office revenues. But now it’s all shut. 

This clearly shows the future bring bleak. In the short run, multiplexes are suffering a lot. But this may continue in the long run too. This may happen owing to the fears among audiences regarding the spread of diseases. But if in the future they get open, the footfalls will still remain low. This means that for a year or two multiplexes will remain in loss. 

PVR cinemas Ltd said that they are suffering from losses of about 74 Crores. Most of the CEOs of multiplexes have clearly shown their intentions. They have said that they will either cut down the employee’s salaries or going to fire them. Now if this happens, a lot of people will get unemployed. 


The ultimate conclusion of this topic can be very subjective. This is more of an economic issue now. The impacts are obviously all negative. This is the time when OTT services are earning the maximum. This includes online media like Netflix etc. This shows that in these trying times, multiplexes can work out an innovation like this. They can try developing apps on which they can show old movies. While this isn’t very feasible as people would want to watch something new. 

This means that the ultimate solution to this problem is the reopening of cinemas. Guidelines of social distancing and others can be followed while opening them. This will be the true and best way to bring the profits back. After all, multiplexes support so many industries and individuals. There is around 15-20% cut in the revenues of these places. This means to cover this huge gap, they need to be reopened with precautions. After all, the slow unlocking of our systems has already begun. This means the negative impact of COVID 19  on businesses won’t last very long. The only thing we need to care about is every aspect of our economy. Multiplexes are definitely a recent development, yet we go there and enjoy it. We spend time with our families, watch movies and eat. We relax and earn respite from our working lives.

Who doesn’t want that back? 

So let’s hope for the best and a positive outcome.    


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