India's Multiplex Occupancy to Rebound in FY25, OTT No Threat

Chennai: Occupancy in multiplexes, which have been lagging behind pre-Covid levels, are expected to pick up in FY25.

Multiplexes have started showing growth both in revenue and profitability for the past one to two years, supported by a consistent increase in the number of films being released and a meaningful increase in the average ticket price (ATP) and spends per head (SPH).

However, occupancy levels still lag the pre-covid levels. India Ratings expects the occupancy levels to pick up in FY25 to support the growth in the revenue and profitability of these companies. The over-the-top (OTT) platforms are expected to co-exist as an alternative entertainment medium without any near-term threat to multiplexes.

Meanwhile, broadcasters and newsprint companies may continue to see improvement in advertisement revenue and cable companies will continue to diversify into broadband services.

The reliance of print companies on advertising revenues remains high, as revenue from advertisement constitutes 60-70 per cent of the total revenue for major print companies. While the industry has seen some recovery in advertisement and overall revenue for print companies, this segment is likely to report single-digit growth in FY25 with the emergence of alternative mediums for news such as digital applications and social media. The agency believes given the synergies available between the cable TV business and the broadband business, multi-system operators will increasingly bundle their offerings with broadband services which ride on the same infrastructure. Cable MSOs will continue to leverage their existing network and offer higher-margin broadband services in a bundled form to mitigate the impact of margin pressures in the cable business. MSOs are also expected to increasingly diversify their geographical presence in the short to medium term, to minimise the impact of subscriber erosion driven by competitive intensity.