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Instant release of movies on OTT Omicron fears on that! Is it better to avoid PVR Omicron Ka Darr Instant Release of Movies on OTT! Is it better to avoid shares of multiplex companies like PVR?

Instant release of movies on OTT Omicron fears on that! Is it better to avoid shares of multiplex companies like PVR?

Highlights

  • Multiplex reopened after being closed for about one and a half years
  • Multiplex companies like PVR and inox are on the mountain of losses
  • The direct effect of thin condition on the shares of these companies

Amidst the Corona crisis that started in March 2020, many habits have now been accepted as the new normal. These habits also include avoiding movie theaters. After being closed for about one and a half years, multiplexes have started again, but by then a lot of water has flowed. Multiplex companies like PVR and inox are standing on a mountain of losses. After Diwali, where Suryavanshi had given some hope to the companies, it also got hit by the Omicron crisis at the end of the year.

The problem is not only due to non-availability of audience in the multiplex due to fear of Corona. Rather, the future of the companies also looks bleak. Almost all Bollywood movies that came in the last two years have been released on platforms like OTT i.e. Netflix, Amazon Prime or Hotstar. Within two months of films like Ballbottom, Sooryavanshi and Bunty Babli released in theatres, the film left the OTT. The customers have also got an idea that if one or one and a half months is stopped, then they can enjoy the film on OTT sitting at home.

Clear effect is visible on stocks

The direct impact of this thin condition of multiplex companies is also visible on the shares of these companies. In early November, when Akshay Kumar’s Sooryavanshi released in theaters, PVR Cinemas’ stock hit a lifetime high of ₹1,838. But by the end of November, it reached 1,390.55. Today, December 21, the stock is at 1272 with a loss of 35 percent from the life time high. Similarly, the stock of the country’s second largest company Inox Leisure is also falling. After touching an all-time high of 466 on November 8, the stock has lost nearly Rs 100.

Omicron’s future in trouble

The news of a new version of Covid-19 has created apprehension for multiplex stocks as they will be worst hit if the government announces lockdown or even restrictions. So, after a gap of almost 18 months, the reopening of cinemas in major markets and a long lineup of films were high on expectations. But with the Omicron news coming in, it will be a tough road for multiplex stocks in the times to come.

Movies are being released in a hurry on OTT

Multiplexes are being hit double by the OTT platform. During the COVID lockdown, when people turned to TV and mobile screens for entertainment, it was named the New Normal. According to Betway’s digital survey, India will witness a tremendous growth in OTT subscribers by 2023. Currently, there are 350 million users, while it is estimated to reach 500 million users. While many films have made their way into cinemas after the reopening of theatres, filmmakers are also opting for OTT releases after 90 days of running theatres. In the long term, this is considered a loss-making deal.

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