On Monday, Mukesh Ambani, chairman of Reliance Industries, announced their ‘Jio first-day-first-show plan’. The much-awaited Jio GigaFiber service is due to launch by mid-2020.
The service will be available to the subscribers of Premium Jio Fiber. How so ever promising this new venture may seem for its investors and subscribers it does pose a great threat to the multiplex owners.
PVR has stressed that they struggle to maintain the eight-week exclusive theatrical window for new movies. Whereas, Inox has stressed that any deviation from this globally accepted norm could cause a 70% slide in business from domestic cinema screenings.
On Tuesday, a day after Ambani announced the service, BSE registered a drop in the shares of PVR Ltd and Inox Leisure Ltd by more than 4% each.
However, RIL‘s shares surged 9.72% on Tuesday, the biggest jump since February 2017, even as the benchmark Sensex shed 1.66% to 36,958.16 points.
RIL‘s new venture will cause a lot of collateral damage as well. Not just PVR, Inox and other multiplexes but the effects will be seen on the food courts and allover footfall at the malls which house these multiplex.
Rajneesh Mahajan, CEO of InOrbits Malls, has expressed his concern about RIL‘s new plan. He understands that this will affect the shelf life of the movie as well as the number of people coming to multiplexes and malls. He also said that though the external factors are uncontrollable, the actual impact will depend on what pricing Reliance offers, and the kind of movies they get rights to show the first day.
Samir Menon, MD of KFC India too expressed his concerns. He said that malls usually witnesses huge footfall around the time of new release which ultimately benefits the restaurant companies in the food court. But with RIL planning to launch their own mini multiplex on their direct consumer’s phones & televisions, it will cause great damage to their overall sales and revenue.
