Posted on 28th Feb 2025
By E4M
Are advertisements intrusive? It’s an age-old question that has been debated enough for almost all possible forms and mediums. Recently, cinema advertising got stuck in a similar crossfire of opinions after a Bengaluru consumer forum fined PVR INOX for showing too many ads and wasting the complainant’s time.
The case highlighted the growing frustration among moviegoers who feel their leisure time is being overtaken by excessive promotional content, raising questions about consumer rights and reasonable expectations on the part of multiplex ticket buyers.
Around the same time, GroupM released its ‘Profiling Cinemagoers’ report. The report highlighted that 42% of viewers acknowledge the influence of cinema ads on their purchase decisions. So, in a theatre with 100 individuals, about 42 would likely enjoy ads being shown to them, at least enough to be influenced by some of them. This data point presents a paradox – while many complain about ads, a significant portion of the audience appears receptive to them, creating value for advertisers and potentially enriching the movie-going experience for those who appreciate product discovery.
The two contradictory headline-worthy updates, so close together, started the debate. Is cinema advertising influential or intrusive?
Moreover, how can brands and multiplexes balance valuable consumer connections while respecting audience boundaries and expectations?
According to industry observers, in-cinema advertising is limited to 20 minutes per show in most theatres. Of these, up to 10 minutes of the inventory can be used to run ads by the central and state governments. However, in cases of big blockbusters, theatres have reportedly run ads for 30 to 50 minutes in a show. This is where the question of intrusion comes up — it’s a significant time commitment that audiences did not explicitly agree to when purchasing their tickets.
The controversy around showing too many ads
PVR Cinemas and PVR Inox have been fined Rs 1.28 lakh for allegedly delaying the screening of a movie by 25 minutes for showing advertisements. The District Consumer Disputes Redressal Commission at Bangalore (Urban) said that the multiplex chain needs to honour people's time and not expect them to sit idle and watch ads for 25-30 minutes. Further, the commission also directed PVR to mention the actual start time on the cinema tickets issued to the public at large.
Reacting to the order, PVR INOX released a media statement: “PVR INOX Limited acknowledges the Order passed by the Hon’ble District Consumer Redressal Commission, Bengaluru. We are currently reviewing the Order in detail and firmly believe that we have a strong case. Accordingly, we intend to challenge the decision before the appropriate legal forum.”
Further, the statement read: “At PVR INOX, we remain committed to acting in the best interests of our valued customers. We categorically state that we have not engaged in any unfair trade practices and have always adhered to legal and regulatory requirements. Ensuring transparency and compliance has been, and will continue to be, our priority.” The multiplex chain declined to comment further on the matter.
According to UFO Moviez, there has been no decline in interest from advertisers due to the buzz around the consumer forum’s judgement. “We haven't encountered any discussions where advertisers are expressing concerns about potential negative associations with cinema advertising,” says Sachiin Gupta, National Sales Head, UFO Moviez, which holds the ad inventory rights for almost 4,000 screens in India.
He adds, “At the beginning of the advertising segment, UFO Moviez made a strategic decision to limit the length of our ad slots to maintain a good balance between advertisements and the actual movie content. This approach enhances the viewing experience for the audiences and it also improves the effectiveness of the ads, making viewers more likely to pay attention without feeling overwhelmed by too many commercials, and this has always worked for us.”
Dissecting the need for more in-cinema ads
Excessive cinema advertising, especially during blockbuster releases, primarily happens due to 3 reasons: High demand for ad slots, people/crowd management in the theatre, and the sale of food and beverages.
About 200 to 400 individuals watch a movie in a sold-out show. It’s an excellent opportunity for advertisers to reach audiences whose purchasing power can be estimated easily. Cinema audiences are a particularly valuable demographic for advertisers – they tend to have disposable income (evidenced by their willingness to pay for premium entertainment), and they arrive in a relaxed, receptive mindset.
Further, in multiplexes, where multiple screens run simultaneously, the total footfall is much higher. This increases the time required for audiences to settle in before the movie and during the interval. The logistical challenge of managing thousands of individuals moving through lobbies, F&B areas, washrooms, and to their seats creates a need to build in buffer times, with advertising serving as content during these transition periods.
At the same time, theatres want moviegoers to have ample time to explore F&B options at leisure, encouraging higher sales, especially during intervals. The strategic placement of advertisements allows movie-goers to make food and beverage purchases without missing the main feature. This integration of advertising and F&B sales represents a business model designed to maximize revenue from multiple streams.
Interestingly, in-cinema advertising makes up 10-12 per cent of the overall revenue for a film exhibition company. According to ICRA’s Rating Methodology - Media (Film Production, Distribution and Exhibition) January 2022, ticket sales constitute 55-56 per cent and food and beverage 25-27% of the revenue.
Though in-cinema advertising is only a tenth of the overall revenue, its value can easily go up by 2x or 3x when a blockbuster movie is in the theatres. This multiplier effect during high-demand periods makes ads lucrative for theatres showing popular films, creating a financial incentive to maximise ads during these peak opportunities.
This was seen prominently during the release of Pushpa 2: The Rule last year, with the movie bagging Rs 100 Crore in in-cinema advertising. The extraordinary figure demonstrates the massive potential of advertising around blockbuster releases, explaining why theatres are reluctant to reduce ads despite consumer complaints.
Raising ticket prices comes at a cost
In comparison, the potential for increasing average ticket prices is much less and highly dependent on luxury cinema offerings, the location of the theatre and other add-ons. Single-screen theatres and even multiplexes face constraints in how much they can raise ticket prices without affecting attendance, making advertising an attractive alternative for revenue growth. Food and beverage prices tend to remain stable, further emphasising the importance of advertising as a flexible revenue source.
Industry observers say ticket sales are not where they should be because of an inconsistency in the content line-up and underperformance of tentpole films. The film exhibition industry has been grappling with unpredictable attendance patterns, with even highly anticipated blockbusters sometimes failing to draw expected crowds. This volatility has created significant financial pressure, as theatres have high fixed costs regardless of occupancy rates. The post-pandemic recovery has been uneven, with audience behaviours continuing to challenge traditional exhibition models.
“A distinct divide has emerged in audience behaviour: they are selective about which films merit a trip to the theatre, and which ones can be watched on streaming 4-8 weeks later,” states a recent Ormax Media report. Movie-goers today essentially look at a cost-benefit analysis before purchasing tickets, weighing factors like spectacle and social experience against the convenience and affordability of waiting for streaming releases.
The report further reads that 2024 registered 88.3 crore (883 million) footfalls, reflecting a 6% decline from 2023. Footfalls in 2024 were lower than the last two years and continue to remain lower than pre-pandemic levels. This underscores the increasing dependence of the box office on rising Average Ticket Prices (ATP) in recent years.
However, according to the Ormax Media report, ATP saw a marginal growth of 3% over 2023, from Rs 130 to Rs 134, compared to double-digit growth over the last two years, indicating more stability in ticket prices in 2024. Further, according to GroupM’s ‘Profiling Cinemagoers’ report, the ATP stood at Rs 144 in 2024, with the highest ticket price going up to Rs 2,500.
While reliance on ATP and high ticket prices helps theatres stay above the red line, it's important to note that a considerably larger investment in infrastructure is required to justify those prices. This creates a challenging financial cycle for exhibitors who must continually upgrade their facilities to warrant premium pricing. Modern audiences expect state-of-the-art projection systems, immersive sound technology, luxury seating options, and enhanced amenities to justify the escalating cost of theatrical attendance. The capital expenditure required for these improvements represents a significant ongoing burden that eats into profit margins, even as ticket prices increase.
Looking at alternative revenue streams
Brand tie-ups, online ticketing revenue and co-branded partnerships are some of the most promising diversification strategies in the exhibition industry. Online ticketing has evolved from a convenience feature to a revenue opportunity, with theatres monetising the digital customer journey through premium fees, data collection, and promotional partnerships with ticketing platforms.
However, there has been low interest in experimental advertising as cinema has yet to prove itself as a consistently effective medium for brands seeking measurable returns on investment. Brands remain hesitant to invest significantly in innovative cinema advertising formats when performance data remains limited and audience fragmentation continues across entertainment options.
Cinema advertising sits at the crossroads of influence and intrusion because it offers brands a unique opportunity to engage audiences in an immersive environment. While some viewers appreciate well-crafted ads that enhance the cinematic experience, others see them as interruptions to their entertainment. The challenge lies in striking the right balance between leveraging the power of the silver screen to create memorable brand experiences and ensuring ads don’t feel excessive or disruptive.