Arrival of multiplexes has changed the entire scenario of entertainment industry in India. In the development of multiplexes, India is one of the leading countries in South Asia. Theatre developers are building 10 to 15 multiplexes a month with each multiplex having at least four to five screens. As per statistical reports, the country has, at present, around 350 multiplex screens and, by 2011, the figure will increase to more than 2,000. Multiplexes’ steady proliferation in the metros and their simultaneous penetration into some smaller cities and towns testify to their increasing popularity among Indians. According to industry experts, multiplexes have completely redefined the business of entertainment. Indeed, multiplexes have changed both taste of audiences and experience of watching movies in India.
Multiplexes in retail
Market insiders have revealed that multiplexes have a major role to play in boosting organised retailing in India and making a business of approximately Rs. 35,000 to 50,000 crore. With this scale, one can expect that it is going to grow eight times in the next few years. There would be approximately 330 operational malls with multiplexes in the country by the end of 2007 and this is good for both the industries. Mr Atul Goel, CEO, E-City Venture, says, “Multiplexes are a perfect example of convergence of retail and entertainment across the mall and high-street (organised shopping formats).” We can say that multiplexes act as catalysts for retailing in malls and high-street markets. Studies show that multiplexes increase footfalls by a whopping 40 to 50 per cent.
In today’s booming market, retailers and multiplexes are mutually beneficial to each other. Therefore, it would be difficult to view any of them separately. According to Mr. Shravan Shroff, founder and Managing Director, Shringar Fame cinemas, “Both multiplexes and retailing get benefits from each other. Multiplexes act as anchor tenants which help in attracting crowd in malls and high street markets. However, if there are too many multiplexes in the vicinity, retailers will face the heat due to stiff competition.”
Contribution to film industry
According to experts, the total film market in India is currently estimated to be Rs 35,000 crore and unorganised sector accounts for around Rs 33,500 crore. This means that the organised sector accounts for only a share of Rs 1,500 crore. Studies show that the film industry is growing annually at the rate of 14.3 per cent, which is a fairly good rate of growth. In terms of number of films produced, the Indian film industry continues to be the largest film industry in the world. With the increasing popularity of multiplexes among Indians, the concept of film business in India has gained a new dimension.
Reports indicate that multiplexes account for 0.6 per cent of the total cinemas, 2.3 per cent of the total screens and have a total capacity of more than two lakh seats. At multiplexes, ticket price varies usually from Rs 75 to Rs 350. The average gross collection per multiplex is around Rs 5.72 crore. Thus, multiplexes fetch about 29 to 35 per cent of the revenue for the film industry. The multiplex industry is expected to invest nearly Rs. 2,200 crore in the next two years. Mr Tushar Dhingra, COO, Adlabs cinemas, informs, “Multiplex industry is expected to grow at 25 to 30 per cent, which is good for the vibrant economy that is growing at the rate of 10 per cent per annum.”
Multiplexes in malls
Over the last three years, mall phenomenon has had a significant impact on the lifestyle of metro-residents. Nowadays, malls have become synonymous with glamour and these centres are generating a substantial amount of excitement and curiosity among the common people. Indian consumers have already started accepting the mall culture, and with economic boom in the country, they are now willing more to spend money in fulfilling their wants. It goes without saying that success of a mall lies in its ability to attract customers consistently.
Ajay Bansal, CEO, Satyam Cineplex, observes, “Out of the three constituents of a mall, i.e. entertainment, shopping and eating out, multiplex is the most capable traffic-generator. When people come to watch a movie, they eat out and also shop.” Mall developers all over the country prefer that, therefore, multiplexes occupy their top floors so as to act as anchor tenants and ensure high footfalls. The traffic flow and layout of the mall are so planned that they ensure that consumers reach the cinema after experiencing and exploring retail (food, shopping and other leisure facilities) areas of the mall. Mr Alok Tandon, Chief Operating Officer, Inox Leisure Ltd, informs, “People generally come to a mall with the intention of watching a movie and end up by making major purchases. But, it could be the other way, too. A mall could be a pleasure destination with the multiplex merely being just one of the options. With both the options in hand, this is definitely an example of the classical chicken and egg question.”
Studies show that, in today’s world, fun, food, films and fashion make a pertinent and potent mixture to attract discerning consumers who want their needs to be met under a single roof. Thus, association of malls with multiplexes is very important. When asked about the reason behind the link between malls and multiplexes, Mr Shroff says, “Nowadays cinema-going is not merely about watching a film but about an overall experience stemming from glitzy ambience, better F&B options, luxury seating, better service, easy access to tickets etc. In malls, all these are available under one roof.”
Latest trends in multiplexes
Adlabs acquired recently Rave's cinemas business, which helped them in making a speedy entry into the northern region, a very potential territory for film industry. Adlabs has acquired now 23 properties with a total of 77 screens across the country. Adlabs opened its first multiplex in 2001 in Mumbai. In 2005, Reliance’s Anil Dhirubhai Ambani Group acquired a majority stake in the company and this gave a boost to its growth. The company is currently on a massive tie-up operation with over 700 multiplexes and single screen cinema hall owners across India, for which they are planning to invest over Rs 100 crore. Adlabs is planning to expand their business to smaller cities also and, recently, they have tied up with single screen owners in tier-II cities only. By the end of March 2008, Adlabs is aiming at expanding its fleet of multiplexes in 70 cities.
PVR is one of the India’s most recognised film exhibition brands and also one of the India’s leading and premium multiplex cinema operators. They established the first multiplex cinema in India, PVR Anupam, in Delhi in 1997. As of June 6, 2007, PVR has extended their property to 21 cinemas with a total of 82 screens, located in all the major cites of the country.
PVR was the first movie entertainment company to introduce computerised ticketing through its multiplexes. It was also the first multiplex to accept credit cards in India for the purchase of movie tickets. PVR cinemas have recently forayed into the distribution of Hollywood movies through its subsidiary company, PVR Pictures. Mr Ajay Bijli, Managing Director, PVR cinemas, opines, “In any business that you are in, if you feel there are too many adversities and you cannot fight them, you close down, but, if you feel that you can work out those adversities, you go ahead with the mindset of tackling them one by one.”
Inox Leisure Ltd is the subsidiary of Gujarat Flurochemicals Ltd. INOX has been instrumental in popularising the multiplex culture in India. The multiplex chain is currently running 14 multiplexes in 12 cities across India. The total number of screens has also increased from 21 (in 2004-05) to 51 screens. INOX has also pioneered the concept of regional screening of films in several cities. INOX, Pune, was the first multiplex in the country to introduce the concept of a ‘preview club’.
As regards expansion, Inox is planning to merge with CCPL, which has 89 cinema halls mainly in eastern and northeastern parts of the country. This merger will give INOX access to eight additional multiplexes in West Bengal and Assam. Further, INOX is planning to come up with another seven properties in other parts of India by the end of 2007.
Cinemax, a part of the Kanakia Group, is one of the largest exhibition theatre chains in India and operates 10 properties with 33 screens and 9,220 seats. Since it is a large chain and has a great stature and network, Cinemax gets more prints and better deals from distributors and production houses. Today, Cinemax is synonymous with the most efficient and friendly technology infrastructure. In short, Cinemax has made film viewing more interesting. Cinemax has introduced many technological advances and brings out every week various new releases in Hindi and English language. Looking at its success in Mumbai, Cinemax is now planning to expand its fleet of multiplexes in other cities of India.
Shringar Fame Cinemas
With the mission of providing cine-lovers a unique and exhilarating experience, Shringar Cinemas Pvt. Ltd started its operation in 1997. In 2002, Shringar Cinemas introduced Fame Adlabs in Mumbai. After the success of Fame Adlabs, the company has launched Fame properties across the country. At present, the company operates three multiplexes in Mumbai; one each at Nashik, Kolkata, Pune, Aurangabad, Anand and Bangalore, Shriangar operates two multiplexes in Dadar also. Shringar plans to open multiplexes in Thane, Hyderabad and Panchkula. Fame will also make its presence felt in cities like Chennai, Mysore, Allahabad, Bangalore, Amritsar, Ludhiana and New Delhi within the next two years.
Satyam opened its first single screen cinema in at Patel Nagar Central Delhi in early 1980s, which was later upgraded to four-screen multiplex. At present, the company is operating three multiplexes in Delhi. Each of these multiplexes has four screens with around 3500 seats. Satyam offers state-of-the-art movie watching experience with full stadium seating, DTS surround sound system, edge-to-edge screen with xenon projection, best quality F&B options from Taj SATS, Pepsi and ACT- II, physically-handicapped friendly facility and brilliant in-store design by world-class architect. Now, Satyam plans to take this experience to other cities of the country. They are planning to open 100 new screens across in the next three years.
Fun Multiplex Pvt. Ltd is a part of the E-city ventures of Essel Group. Fun multiplex has presence in all the major cities in India and plans to expand its fleet. At present, Fun Multiplex operates 50 cinemas screens in 11 cities with 14 locations. The company has already signed additional 150 screens in approximately 24 cities across the country. The company would operate 300 multiplex screens by the end of FY 2011. Mr Goel, opines, “The whole experience of watching cinema has gone through a major facelift - from the viewing experience to the overall tangible and intangible service parameters. All these factors are creating world-class platforms for patrons to enjoy movies at the multiplex.”
Changing the way the nation watches movies, Chadha Group has introduced Wave cinemas in the northern part of India. With projection systems from Kiloton-Germany, audio systems from Martin Audio-London and carpets from Brinton, these theatres provide the ultimate movie experience. They have ergonomically designed luxurious seats, wider and provided with space for legs. The group is operating multiplexes at Noida, Kaushambi and Lucknow. Under the Wave cinemas banner, two projects are coming up at Ludhiana and Moradabad in the West End mall and Westend Estate mall respectively. These cinemas have the latest facilities and they are comparable to the best cinemas in the world.
The future of multiplex industry looks bright both in urban and rural markets of the country. Current trend and the high economic growth indicate a continuous growth of this industry. Multiplex chain owners have realised that movie watchers need, along with good movies, comfort. An industry expert explains, “We have to go a long way. Now, the industry is eyeing tier-II and tier-III cities. Moreover, various state governments have started giving tax benefits to the industry, which will benefit the industry in the long run.” To keep up with the increasing demand for comfort among Indian audiences, major industry players will have to keep on improving their services. This would definitely prove to be good for the future of multiplex industry in India.