Multiplex and Single Screen Cinemas - India

March 2009

rising income levels and willingness of people to spend on recreation Market Drivers & Challenges Challenges: Uncertainty over entertainment tax. Company Y and Company Z • Fierce competition in multiplex segment 2 MULTIPLEX AND SINGE SCREEN CINEMAS – INDIA. development delays and piracy Characteristics Seasonality Reducing shelf life of movies Low screen density Increasing average ticket prices Trends Producers bypassing distributors Shift to digital cinema Alternate content in multiplexes Retail partnerships New format in single screen theatre Characteristics & Trends E L P M A S Competition • Single screen segment : Highly fragmented and unorganized • Multiplex segment : Dominated by five organized players • Major players in Multiplex segment: Company X. alternate entertainment avenues.PPT . improving supply of real estate and favourable tax exemptions – Demand side: Favourable demographics. slowdown in economy.Executive Summary Estimated to be worth INR XX bn in 2008 and INR YY bn in 2012 Key Segments: Single and double-screen cinemas and Multiplex cinemas Multiplex segment is growing while single screen segment is declining Southern Indian states together account for x% of the number of theatres in India Drivers: – Supply side: Growth in Film Industry .

PPT 3 .•Market Overview •Business Model •Drivers & Challenges •Characteristics & Trends •Competition •Key Developments MULTIPLEX AND SINGE SCREEN CINEMAS – INDIA.

500 1. with the latter growing rapidly Overview • Key Segments Single and double-screen cinemas Multiplex cinemas. i.PPT .Cinema exhibition comprises of single-screen and multiplex theatres.000 2006 2008 2012 Growth of Multiplexes Screens +a% +b% X +c% Z Uttar Pradesh z% y% x% w% Maharashtra Karnataka Source: v% Y Tamil Nadu 500 0 Kerala 2006 2008 2012 4 MULTIPLEX AND SINGE SCREEN CINEMAS – INDIA.e. three screens or more • Multiplexes account for: x% of the total number of cinema halls y% of total cinema screens in the country • South Indian states together account for x% of the number of theatres in India Market size & growth INR bn 150 100 +a% +c% +b% Y X Z Theatre distribution Others t% Andhra Pradesh u% E L P M A S 50 0 1.

PPT 5 .Ticket and F&B sales contribute to bulk of revenues Primary Revenue Ticket Sales F&B Sales Advertising Revenue x% y% z% Primary Costs Distributor’s Share F&B Cost Entertainment Tax x% y% z% Exhibitor Secondary Revenue Parking Charges Management Fee Convenience Fee x% y% z% Secondary Costs Rent / Rev Share Overheads Personnel Cost x% y% z% Ticket w% Advertising Others x% F&B y% z% Parking v% E L P M A S Distributor F&B v% w% Taxes x% Rent y% Others z% Source: MULTIPLEX AND SINGE SCREEN CINEMAS – INDIA.

PPT 6 .Drivers Favorable Demographics Willingness of people to spend on recreation Rising Income levels Demand Side Drivers Supply Side Growth in Film Industry Improving supply of Real Estate Tax Exemptions MULTIPLEX AND SINGE SCREEN CINEMAS – INDIA.

Challenges Slow down in economy Uncertainty over entertainment tax Alternative modes of entertainment Challenges Piracy Development delays MULTIPLEX AND SINGE SCREEN CINEMAS – INDIA.PPT 7 .

PPT 8 .Key Trends Producers bypassing distributors Shift to Digital Cinema Trends Alternate content in multiplexes Retail partnerships New format in single screen theatre Source: MULTIPLEX AND SINGE SCREEN CINEMAS – INDIA.

Single screen segment is unorganized while multiplex segment is highly organized and dominated by five players Competition •Single screen segment is highly fragmented with few owning more than one movie hall •Five players dominate the multiplex industry •Box office revenue breakup in multiplexes: x% from Hollywood movies Over y% from local Hindi language movies Number of screens multiplexes 200 150 Number of Cinemas Number of Screens Y Y Y X X X Y •Occupancy levels Multiplexes : x-y% Single screen cinemas : a-b% •Fierce competition in multiplex segment due to attractive economics and growth potential Leading players have major expansion plans Many new players are planning to enter this industry E L P M A S 100 50 0 Y X X Company Company Company Company Company x Y z V W Footfalls and Occupancy ratio Occupancy Footfalls (mn) c% b% a% V W d% X % 50 40 30 20 10 0 mn 20 15 10 5 0 U Company X Company Y Company Z Company V Source: MULTIPLEX AND SINGE SCREEN CINEMAS – INDIA.PPT 9 .

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