You are on page 1of 5



• News
• Business
• Movies
• Sports
• Get Ahead
Hi Guest
Sign in | Create a Rediffmail account
Top of Form web
Bottom of Form » Business » The multiplex boom sweeps India

The multiplex boom sweeps India

January 24, 2007 10:51 IST



Write a

When RakeshPrabhu, a 38-year-old public sector executive, landed at Aurangabad, once the
southern capital of the last great Mughal emperor Aurangzeb, after being transferred from
Mumbai [ Images ] a year ago, he was a much depressed man.
What was worrying him was not children's school admission (the schools here are as good) or
wife's job (she's anyway a housewife). He was not going to miss Juhu[ Images ] beach (the hills
here are as beautiful) or weekend trips to Elephanta caves (Ellora caves are just 35 km from
The real life was okay, it was his reel affair that was giving him jitters. Here's the confession:
Prabhu is a die-hard movie buff who has been for years watching most Bollywood films in the
first weekend, if not on the opening day, of their release. And, since the advent of multiplexes in
Mumbai, he had been enjoying the show even more, sometimes watching two or even three
movies on a single day.
Now, in Aurangabad, most movies would be releasing a week or two later than in Mumbai.
Worse, the nightmarish ghost theatres of yesteryears -- with their creaky fans, stinking loos,
ragged seats with bugs and long-torn cushions and noisy projectors -- would return to disturb
Prabhu's Bollywood dreams. . . he, of course, had a reason to be worried.
Now, cut to present. Here's Prabhu, across the street in Aurangabad's Jalna Road, waving at you
with a huge grin on his face. He's not flashing a transfer order; that's a cinema ticket in his hand.
He's about to watch ApnaSapna Money Money[ Images ] on the day of the movie's national
release. And he's doing it in the cosy atmosphere of the brand new PVR multiplex that's come up
in the town.
India's multiplex bandwagon has gone beyond the metros to redefine entertainment in B and C
class towns. "While the first phase (of the multiplex story) saw emergence of multiplexes in
metros and now this growth is spreading to Tier 2 and 3 cities like Lucknow [ Images ], Indore,
Nasik, Aurangabad, Kanpur, Amritsar [ Images ] and so on," says Ajay Bijli, managing director,
PVR Cinemas. And PVR is not alone.
Other top multiplex players like Adlabs Films (where Anil Ambani [ Images ] holds a 51%
stake), InoxLeisures, Shringar Cinemas (Fame multiplexes), Fun Multiplex (of Essel group)
and Cinemax India too have ventured to small towns across the country from Darjeeling to
Mangalore to Ghaziabad to Pimpri to Pune to Panipat to Allahabad to Indore to Latur to Agra [
Images ] to Thane to Lucknow to Hyderabad to Nasik to Jaipur [ Images ] to Visakhapatnam [
Images ].
Projects are under way in places like Kochi, Bhatinda, Coimbatore, Kota, Madurai [ Images ]
and Ambala. "Metro or non metro, if a town has a population of more than 10 lakh (1 million)
people, we are interested," says AlokTandon, chief operating officer, Inox[ Get Quote ].
"About 38 cities in India would qualify for that," he adds. "Given that there is little or no means
of entertainment in B and C class towns, there is a huge potential for multiplexes," says
DevangSampat, general manager, marketing, Cinemax.
The rising prominence of smaller towns can be gauged from the fact that movie stars are now
touching down at these places to promote their films. If Aamir Khan [ Images ] was in Thane, a
suburb of Mumbai, for the release of Rang de Basanti [ Images ], more recently Amrita Rao [
Images ] was in Nasik for the release of Vivaah.
"After two years, non metros will clearly be the drivers for film exhibition companies," says a
foreign fund manager, who owns and tracks multiplex stocks. "With box office collections from
non metros, expected to move up one cannot ignore the smaller towns."
At present, as much as 65% of the total box office collections in the country come from non
metros, says Sampat of Cinemax. "We see this changing to 30:70 metro-non metro in three-to-
five years," he adds.
Look at their plans. PVR, which raised almost Rs 128 crore (Rs 1.28 billion) last December
through its initial public offering, has gone for a new brand, PVR Talkies, to foray into smaller
PVR Talkies plans to enter 70 cities -- including Khanna, Jalandhar [ Images ], Amritsar and
Moradabad -- over the next three-to-five years. Adlabs[ Get Quote ], which says it would invest
Rs 200 crore (Rs 2 billion) over the next three years, is eyeing places like Hyderabad, Delhi [
Images ] and NCR, Agra, Jalandhar, Ludhiana, Indore and Allahabad.
Inox, which has entered into a share swap deal to take over Calcutta CenePvt Ltd (CCPL) --
known for its multiplex brand 89 Cinema -- already has multiplexes in smaller places like
Vadodara, Darjeeling, Goa [ Images ], Indore, Jaipur, Kota, Nagpur and Pune.
Its theatres are coming up at Chennai, Hyderabad, Jodhpur [ Images ], Raipur, Lucknow,
Nagpur, Kharagpur, Borivali, Pune and Vijayawada. Further, the CCPL merger will bring in nine
multiplexes in West Bengal [ Images ] and Assam to its fold. Similarly, Shringar -- already
operating in Kandivali, Surat[ Images ], Nasik and Pimpri -- is taking its Fame to places like
Aurangabad and Thane.
Pricing It Right
As in metros, in smaller towns too it is the retail boom that's mostly driving the multiplex story.
Mall developers all over the country are wooing multiplexes to occupy their top floors as anchor
tenants who would ensure footfalls.
"The arrival of the mall syndrome has accelerated the growth of cineplexes as multiplexes are the
anchor tenants in most of these malls," says ShravanShroff, managing director, Shringar
Cinemas [ Get Quote ].
But the game is slightly different here from that in metros. For one, multiplexes are forced to
price their tickets lower as affordability levels are lower in smaller cities.
"Customers in these towns would not have the capacity to pay upwards of Rs 100 for a ticket,
hence we have entered these towns under a separate brand name of PVR Talkies," says
AshishShukla, chief executive officer, PVR Talkies.
Cinemax, for example, has priced its tickets at less than Rs 100 in Nashik, while in its Mumbai
property the average ticket price is Rs 150. Also, revenues from food and beverages (F&B) and
advertisements are lower in smaller towns.
According to Sampat of Cinemax, F&B revenue constitute 15-20% in non-metros compared to
20-25% in metros. "While ad revenue in metros would be 10%, non metros would yield 5%," he
adds. "Since my margins in food and beverages are as high as 65%, lower F&B revenues from
the segment, would delay my break even in B and C class cities," murmurs a multiplex operator
who doesn't want to be named.
Industry watchers feel this will change. "Over time, F&B and ad revenues from non metros
would match the metros," says ChintanMewar, analyst at Almondz Securities. Also, the
consumer preferences are different. If hotdogs and popcorn are popular in the metros and semi-
metros, in smaller towns, people would rather go for the traditional samosas and vadapaavs.
To make up for lower revenues, exhibitors are entering the B and C towns without some of the
frills they offer in metros. For example, while Cinemax offers reclining chairs in Versova,
Mumbai the chairs are simpler in Nashik. PVR has an air-cooled lobby in Latur, while the
lobbies in its metro properties are air-conditioned. But they won't call it cost cutting. "The
ambience is adjusted to the local environment," as per PVR's Shukla.
Farewell, Single Screen
So what if multiplexes constitute just 1% of the total number of cinema halls, and 4-5% of the
12,900 screens, in India, the industry is talking about the end of single screens. Single screens,
with their low quality ambience, would find it tough to survive in the long run, it is felt.
"Over a period of time, theatres will die a natural death," says Sampat. This because there is a
rising demand for quality cinema exhibition infrastructure. Also, before long, digitisation will be
the industry standard and exhibitors will have to shift to it.
"Though the propensity to watch movies in India is high, there is a big gap in terms of quality-
viewing experience between the metros and the smaller cities," says TusharDhingra, chief
operating officer, Adlabs.
In India, there are only 12 screens per million population compared to 117 screens per million in
the US and more than 40 screens per million for European countries.
Now, what are the risks involved? Increasing property prices is a big concern, of course. But
most multiplex owners have tied up properties for at least the next couple of years. Also, being
the anchor tenants in a mall, they are always offered special rates by developers.
"Since we have signed up properties for the next two-to-three years, and get preferred rates as we
are anchor tenant, we are not worried about the rise in property prices," says Tandon of Inox. It's
the same for other top players as well. "One of our key focus areas is also expansion to smaller
towns, with populations of up to five lakh (500,000). Property prices in these places have been
comparatively stable, which makes us bullish on our plans for these cities," says Bijli of PVR.
So, at least on the surface, there's nothing much to stop the multiplex boom.
The coming of age of direct-to-home services like movie-on-demand and live gaming are
unlikely to make the millions of Prabhus across a country of fanatic fans (have you heard of the
temple named after South Indian actress Khushboo or about the guy who offered his pocket knife
to an unarmed Amitabh Bachchan [ Images ] surrounded by villains and tore apart the screen in
the process?) resist the first day-first show temptation of Bollywood.

Powered by
Prashant Mahesh, Outlook Business



Write a


• Uproar in Orissa House over collector's abduction

• Trinamool Congress teams up with BJP in Manipur
• Congress MP retracts statement on bribing SC judge
• Unveiled: US army's 'hummingbird' spy drone!
• What happened to complaint against ex-CJI: SC

Top of Form
Name Mobile Email Id

Bottom of Form
Insurance is the subject matter of solicitation | Max Bupa Health
Insurance Co. Ltd. IRDA Registration No. 145 For more details on terms
and conditions, exclusions and waiting period, please read sales
brochure of Heartbeat Health Insurance Policy carefully before
concluding a sale. Maxbupa collects the information within this ad and is
solely responsible for their use of it.

Moneywiz Live!
Top of Form

Bottom of Form

Market Voices
Get the Live Expert Comments

Gainers / Losers
Daily • Weekly • Monthly

NewsRediffmailMobileBlogsBook a DomainBooksBudget 2011SongBuzzMoneyRediffmail

ProiShareQ&ALocalAdsShoppingAstrologyBuzzWorld Cup 2011
© 2011 - Investor Information - Advertise with us - Disclaimer - Privacy Policy -
Careers - Feedback