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Movie theatres may not be dying, but their existential crisis is real as they keep losing ground to smaller screens—literally! As over-the-top (OTT) apps continue to succeed in keeping consumers indoors, consistently empty theatres are pushing mall developers to reassess the space they allocate to multiplexes. The intent is to build fewer but high-quality screens and save space for expanded dining, alternative entertainment avenues, and emerging categories such as jewellery and direct-to-consumer brands. Unless the movie industry, which is still recovering from the pandemic-induced lethargy, scripts a dramatic comeback, space marked for theatres within malls could fall by 30-50% over two to five years estimated real estate consultants.
Though reducing the existing cinema space is not feasible, new projects are being designed keeping in mind the evolving consumer behaviour. "Cinemas will always remain, but the format may change. It’s not about the volume and number of screens anymore.
It's a lesser number of screens, but a greater experience," Pushpa Bector, senior executive director and business head, DLF Ltd, told . DLF operates malls across the National Capital Region (NCR). Also Read: The pandemic, coupled with the rise of OTT platforms, has significantly influenced how audiences consume content, said Rajneesh Mahajan, chief executive, Inorbit Mall, which operates malls in West India, including in Mumbai.
"We’re now seeing a preference for multiplexes with fewer screens, typically five to seven, but with a thoughtful mix of large-format, mid-sized, and specialized screening experiences." Contrast that with the pre-pandemic trend of mega multiplexes that boasted nine to 17 screens. Space optimization To be sure, demand for mall space is consistently surpassing supply, bringing down vacancies and driving up rentals.
The demand is mostly led by apparel and accessories, beauty and personal care brands, reported on 19 March, a report by real estate consultant Anarock Retail. A similar trend is playing out in the hypermarket space, where space given to large supermarkets is also being slashed to accommodate in-demand categories such as food and beverages, experiences, and jewellery. “Traditionally, two of the largest footfall-drawing categories were theatres and hypermarkets; those are now a third of their original size.
In new developments, space allocated to hypermarkets and theatres is down by at least 30 to 50%," said Saurabh Shatdal, executive managing director, capital markets and head, retail, Cushman & Wakefield. "In an 800,000 to 1 million square foot mall, theatres typically take up around 50,000-70,000 sq. ft or 7-8% of the mall space; now it could be anywhere between 2-4%," he added.
Shatdal said developers will now focus on better experiences that cannot be replicated in OTT viewing. Flop show Movie theatres worldwide are struggling to break consumers out of home-viewing hypnosis. And steep ticket prices aren't helping.
Sample this: Hindi films' collections dropped to 4,679 crore in 2024 from 5,380 crore in 2023. And, 31% of these collections came from dubbed versions of South Indian language films, according to media consulting firm Ormax. Overall, movies earned 11,833 crore compared to 12,226 crore in 2023.
Most of these earnings can be attributed to higher ticket prices as footfall continued to decline in 2024. The year saw 883 million people go to theatres to watch movies, 6% fewer than in 2023. In comparison, a total of 1.
03 billion people went to theatres in 2019. Also Read: The average ticket price was 134 in 2024 versus 106 in 2019. The trend persists even in 2025.
Barring period drama Chhaava, no other Hindi language film has broken out at the box office in the past three months. Meanwhile, the total time spent on social media and video consumption rose by 18% in 2024, according to the Ficci-EY media and entertainment report. Online video subscriptions jumped to 111 million, while their revenues grew 11% to 9,200 crore.
Further, multiplex chains such as PVR Inox, Cinepolis India and Miraj Entertainment are looking at the future of cinema as luxurious spaces that combine the best sound, projection, food and lounge areas. In premium formats such as IMAX, tickets can cost upwards of 1,000, alienating large sections of society. A mere necessity Developers believe compelling content will continue to draw consumers, but priorities are changing.
“We buy malls, we don't construct them, which means we also buy theatres. Repurposing theatres is not easy. We are looking at options because, in some cases, the number of screens is probably more than what is required today," said Dalip Sehgal, executive director and chief executive of Nexus Select Trust, which operates 18 high-end malls in India.
Ashutosh Agarwal, owner of Star World Cinemas in Uttar Pradesh, agreed that theatres are now looking at two to three screen properties from eight to nine earlier. “In fact, this is decent space given the state of the business. We can manage showcasing even if there are multiple releases.
" Besides, single-screen cinemas are already closing across the country, and viewers in many markets lack access to theatrical infrastructure. A senior executive at a multiplex chain said theatres have been insisting on a revenue-sharing arrangement instead of guaranteeing malls a minimum upfront payment regardless of box office performance. Also Read: “Footfalls have dropped, there are so many entertainment options available on OTT and fewer big-ticket films are being released.
There is no way to guarantee how much the business will make," the person said, adding that top theatre chains have exited a few properties over the past year that were either incurring losses or developers remained unwilling to set revenue-sharing terms. “Now in response, mall owners are saying they shall offer only limited space, and what would previously be allotted to cinemas could now go to conference halls or other entertainment venues," the executive added. PVR Inox, Cinepolis India and Miraj Entertainment didn't respond to 's emailed queries.
“It is true that malls are negotiating lesser space for cinemas and looking at other entertainment, experiential zones instead. But that reflects the times and state of the box office. Movie halls have always been seen as anchor tenants in India and globally.
It is possible that things could change as the box office scenario improves," trade and exhibition expert Girish Johar said. As of 2023, south India—Andhra Pradesh, Karnataka, Tamil Nadu and Kerala—had 4,573 cinema screens, while the rest of the country had 5,169, according to a Ficci-EY report..
