Cinemas dying, yet owners not availing govt cheap loan. Why?

Three years ago, the central bank introduced a Tk1,000 crore soft loan facility for struggling movie theatre owners, offering a lifeline to counter the devastating impacts of the Covid-19 lockdown. 

But, like a popcorn kernel stuck in a projector, the funds haven't quite popped. Only a fraction of the low-cost loan, a mere Tk18 crore, has been disbursed to date. 

This underwhelming response compelled the central bank to repeatedly extend the deadline, prolonging the opportunity each year since 2022. The latest extension came earlier this month, leaving the option open until the end of this year. 

The scheme, initiated in 2021, addresses longstanding demands from the film industry for financial aid to foster survival and revival. Under the scheme, entrepreneurs will receive Tk10 crore each to set up new cinema halls, while existing owners will be allowed to obtain Tk5 crore each to renovate their theatres. 

Shopping mall owners can also access the loan to build movie theatres. The loan must be repaid in 8 years, including a grace period of one year. The interest rate for this loan is 5% in metropolitan areas and 4.5% outside. 

Despite such convenient facilities, what keeps movie theatre owners away from seizing the opportunity? Have they missed their cue? 

Iftekharuddin Naushad, owner of Madhumita Hall in Dhaka, said to The Business Standard, "What use is the loan to me? There are no worthwhile movies to screen." 

He argued that a captivating storyline would draw audiences, especially considering the abundance of movies now accessible via OTT platforms. 

Even two decades ago, cinema halls were bustling hubs of entertainment for the common people. 

With increasing demand from audiences, cinema halls have proliferated across the country. This growth has spurred producers to make substantial investments, resulting in the creation of movies with captivating narratives and talented, sought-after actors. 

Cinema tickets were a good source of government's revenues too. One can still remember 'Jamuna Bridge Surcharge' was collected from every ticket sold at movie theatres – making movie-goers of '90s a part of the country's major projects. Still, VAT and other taxes make up 20% of ticket price – Tk110 of a Tk550 ticket. 

Dimming silver screens

Modhumita was once among Dhaka's premier movie theatres, drawing long queues of eager moviegoers before each screening. However, the reluctance of its owner to even consider the cheap loan option speaks volumes about the struggles faced by the entertainment industry in Bangladesh. 

Covid was the final straw that forced the halls to shut down for weeks, but it was not the only reason for the downfall of the film industry as a whole. 

The crisis highlighted by Naushad, the lack of good movies, is echoed throughout the industry. This issue has been a contributing factor to the closure of numerous cinema halls over the past decade or more.

Therefore, the stimulus loan for Covid recovery is of little or no use to cinema hall owners. Many of the country's theatres are being torn down to make way for multi-story buildings, malls, and warehouses. 

Former president of the Film Exhibitors Association, Kazi Shoaib Rashid, who also owns Chandrima Hall, attributes this trend to declining audience numbers. 

"Declining cinema attendance and a scarcity of new releases have slashed theatre revenues, prompting owners to close or demolish their businesses, replacing them with commercial buildings," he said.

During the 2000s, dwindling audience numbers began plunging operating theatres into financial losses. 

Unable to sustain these losses, theatres started stuttering one after another. In some areas, the void left by closed cinemas was filled with commercial buildings, while other locations saw the erection of different structures.

As a result, the count of operational cinema halls across the country has dwindled from 1,500 in 2003 to nearly 200 presently. 

Among these, only 50 to 70 remain active, showcasing movies throughout the regular year. The count rises to around 150 during Eid and other special occasions.

Cheap loan, but no takers  

Since 2010, there has been a mounting call to recognise the film and related businesses as an industrial sector. Responding to this demand, the government officially designated the film sector as an industry in 2012, entitling it to the same privileges as other industrial sectors. 

As part of an initiative to provide broader financial support to the industry, including cinema hall owners grappling with the shocks of the pandemic, the central bank introduced a refinancing scheme to facilitate greater access to bank loans. 

So far, Premier Bank has disbursed Tk15 crore, while One Bank has disbursed Tk3 crore. 

M Riazul Karim, managing director and chief executive at Premier Bank, told TBS that there has been a limited response. 

"The loans are only provided to applicants adhering to Bangladesh Bank's guidelines. Non-compliance with regulatory guidelines disqualifies applicants from receiving funds," he said, stating that this loan is strictly allocated for cinema halls. Any deviation incurs a 2% penalty for the lending bank, said Karim.

Why are not the cinema hall owners availing the cheap loan? 

Jasim Uddin Haider, owner of Rajmoni hall in Bhola's Borhanuddin, told The Business Standard, "I would have taken the loan if I had decided to restart the cinema hall. I am not interested in this business any more." 

Most of the cinema halls have been transformed into residential and commercial high-rises and warehouses. Jasim's cinema hall, built in 1990, was closed during Covid in 2021. It is now a commercial building with restaurants. 

Good content matters   

Cinema halls are closing, but people have not stopped watching movies. They are getting movies to watch on television channels. And they have viewers in rural tea stalls as well.  

People also queue for tickets to watch good movies in modern cinema halls and also in existing old ones. Hindi movies being released since last year are also drawing viewers. 

Recent movie Priyotoma sets an example. It saw good response from people and did good business – making Tk42 crore out of an investment of Tk3 crore. 

Few more such movies bring new hope as they have made their mark in international box office too.

Hawa topped the list of Bangladeshi movies crossing $100,000 milestone of revenues from North American theatres along with Priyotama, Paran and Debi until the middle of 2023, when another movie Surongo entered Los Angeles theatres competing with Indian movies, according to Bangla Movie Database that quoted distributors. 

These are not the first instances of Bangladeshi movies screened abroad. The Rain, a movie starring Olivia and Wasim, earned $14,500 back in 1977, its director SM Shafi had told cine magazine Chitrali back then. It also represented the local film industry in the Export Promotion Bureau's fair.     

Hope for revival 

Industry people hold the hope, saying cheap loan alone will not make it happen. It is teamwork that requires good scripts, good making to develop good contents to bring people back to cinema halls.

Senior filmmaker Kazi Hayat said the industry needs new faces and good making. "If the government's donation is used in new casting for quality films, the industry will go forward and halls will earn more," he feels. 

"The industry lacks good scripts and good making," says Shahjahan Sourov, a scriptwriter. 

The environment of cinema halls also matters greatly. For years of neglect, the inside of most of the cinema halls turned like a warehouse with insufficient lights and worn-out seats inhabited by bed bugs and cockroaches, enough to frighten someone going with family members.  

Those need renovation, as Sourov says. 

Producer Khorshed Alam Khosru calls for improving the environment of single screens if they want to get more viewers.