Friday, October 12, 2007
ENTERTAINMENT: The Plot Thickens
August 2007 Coverstory for IMAGES Retail
For once, the business of entertainment retail and the entrepreneurial skills behind Indian showbiz has become just as exciting as thriller movie plots and on-screen histrionic talents. There are as many mushrooming multiplexes as there are malls -- and more are joining the brigade with old-style single-screen theatres being converted into three and four-screen cineplexes by big movie exhibition retail chains. What’s more, the retail boom has even managed to affect the movie-making industry by engendering a whole new breed of ‘multiplex cinemas’ that urban Indian audiences are lapping up. With gaming zones, malls with attached theme parks, and satellite radio lounges pitching in too entertainment retail in India has never had it so good. SAON BHATTACHARYA catches the drama behind the curtains…
That movies are the biggest entertainment avenue for India’s billions is a no-brainer. And that the best development to have happened to the Indian entertainment business in years has been the growth of multiplexes is also a known fact. But having said that it also remains a fact that in India, there are only 12 screens per 10 lakh population compared to 117 screens per 10 lakh in the US and more than 40 screens for European nations. The multiplex business is clearly a fledgling industry at the moment with huge potential.
With the increasing acceptance of organised retailing in urban India, there has been a growing demand for quality retail space from large F&G retailers, fashion apparel chains as well as from multiplex operators. As a result, multiplex growth in the country has been proportional to mall growth. According to IMAGES F&R Research, currently India has about 200 operational malls, which is expected to rise to 600 by 2010-11. Within the next three years, therefore, the number of movie exhibition screens, seats and audience capacity are also expected to grow simultaneously.
But what is interesting to note at this stage is that even though multiplex space supply is almost at par with retail space supply, the cinema exhibition business is only about a fifth of the total retail business in India. This is an indicator of the fact that either multiplexes at present are in excess of the expected market size, or that multiplex business needs to explore virgin territories other than that of the over-supplied metros.
LEISURE & ENTERTAINMENT MARKET SIZE
Riding the economic growth and rising affluence levels that India has been witnessing in the last few years, the Indian entertainment industry has been growing at a rapid pace. From books and music to gifts and movies, there has been a growth in almost all segments of leisure and entertainment. According to IMAGES F&R Research estimates based on CSO National Accounts Statistics 2006 (Statement-14), consumer spend on leisure and entertainment grew 24.2 percent in 2004-05 over the previous financial year spend of Rs.29,360 crore.
The total entertainment retail market in India is currently estimated at Rs.35,000 crore, out of which the share of the organised segment is just about four percent -- at Rs.1,450 crore. Currently this organised segment has seen a growth of 14.3 per cent over last year, with a year-on-year growth of over 44 per cent in the last two years.
The Indian entertainment industry is further expected to grow to more than Rs.58,800 crore by 2010. The multiplex industry, for its part, is expected to grow at over 44 percent a year to about Rs.90 crore by 2008, while the Indian film industry (currently worth about Rs.8,000 crore or US$ 2 billion) is expected to grow to Rs.17,400 crore (US$4.3 billion) by 2011.
The Indian film industry continues to be the largest in the world in terms of the number of films produced. The encouraging growth in the number of multiplexes has also enabled moviegoers, especially in urban India, to add a new dimension to their movie viewing experience. However, the overall number of screens in the country remained approximately the same since multiplexes have only managed to compensate for the closure of several single screen theatres across the country.
The total entertainment retail market in India is currently estimated at Rs.35,000 crore, out of which the share of the organised segment is just about four percent -- at Rs.1,450 crore. Currently this organised segment has seen a growth of 14.3 per cent over last year, with a year-on-year growth of over 44 per cent in the last two years.
The Indian entertainment industry is further expected to grow to more than Rs.58,800 crore by 2010. The multiplex industry, for its part, is expected to grow at over 44 percent a year to about Rs.90 crore by 2008, while the Indian film industry (currently worth about Rs.8,000 crore or US$ 2 billion) is expected to grow to Rs.17,400 crore (US$4.3 billion) by 2011.
The Indian film industry continues to be the largest in the world in terms of the number of films produced. The encouraging growth in the number of multiplexes has also enabled moviegoers, especially in urban India, to add a new dimension to their movie viewing experience. However, the overall number of screens in the country remained approximately the same since multiplexes have only managed to compensate for the closure of several single screen theatres across the country.
MAJOR PLAYERS
Adlabs Cinemas
Adlabs Cinemas, owned by the Anil Dhirubhai Ambani Group (ADAG), was launched in 2000 with the opening of the world's largest IMAX dome theatre and a four-screen multiplex in Wadala, Mumbai. Adlabs operated four multiplexes (three in Mumbai and one in Nasik), with a total of 12 screens and an audience capacity is 4,385 seats in 2005-06. Revenues stood at Rs. 34 crore in the last fiscal, with an average transaction value of Rs.130.
Today Adlabs Cinemas operates approximately 80 screens across India. The company is currently on a massive tie-up operation with multiplexes and single-screen cinema halls, as well as greenfield sites across the country, especially in Gujarat. Currently some 350-odd acquisitions, long term leases and management contracts (with single-screen theatres) have been targeted in the first phase of expansions. Most of these new alliances are in tier-II cities like Indore, Meerut, Allahabad and Belgaum.
Around 700 movie halls will be targeted over the next few years, most of which will be converted either into multiplexes or into prime single-screen destinations like the company’s Metro Adlabs in Mumbai. What started with the Mehul Theatre in Jamnagar, Gujarat (an Anil Ambani stronghold), which was converted into a three-screen multiplex, will now spread across India’s fast growing, prosperous small towns. Adlabs plans to come up with an investment of about Rs.100 crore in Chhattisgarh, for instance, to develop four-screen multiplexes at Raipur, Bhilai, Bilaspur, Korba, Raigarh, Ambikapur and Rajnandgaon.
ADAG’s ultimate grand plan is to utilise Reliance Infocomm’s existing fibre optic network to digitally screen movies from a central location across Adlabs Cinemas’ vast movie hall network. This strategy might also help in bringing down current multiplex ticket prices -- at least in small town India. At its current rate of expansion and acquisitions, Adlabs Cinemas will easily emerge as the largest player in the organised entertainment retail segment in India.
Pyramid Saimira Theatre Ltd
Pyramid Saimira Theatre Ltd (PSTL) is a movie theatre chain with a presence in malls, multiplexes and standalone theatres. PSTL has been acquiring theatres on long-term lease or on ownership basis. The operations of the company are centred in South India, with a retail presence in cities like Chennai, Madurai, Salem and Tirunelveli. The chain currently operates 325. The company plans to tie-up with 120 single-screen theatres in metros and 235 theatres in tier-II and III cities. PSTL has already tied-up with existing movie halls and malls in Punjab, Himachal Pradesh, Haryana and Rajasthan, for conversion into digital-friendly theatre formats.
Unlike Reliance, PSTL is involved in setting up an integrated Network Operating Center (NOC) which will convert 35 mm films into digital or d-cinema, and transmit these films via a satellite medium to various theatres across India in a secured encryption mode.
The company eventually plans to create a franchisee model for theatres in tier-II and III locations, where existing theatre owners will manage the theatres under PSTL’s branding, with a minimum assured quality. PSTL will manage the entire content, without any fixed cost exposure. By 2012, PSTL plans to operate 2,000 screens in India.
PVR Cinemas Ltd
Credited with spearheading the multiplex revolution in the country in 1997, PVR Cinemas Ltd has now established more than 82 screens at 21 complexes. The total audience capacity of PVR is 21,316 seats at present. PVR was the first movie exhibition company to introduce computerised ticketing. It was also the first to accept credit cards in India for the purchase of movie tickets; the first to offer cinema tickets over the internet with an online payment gateway; as well as the first to receive institutional funding in the cinema industry -- from ICICI Venture. It has currently entered into a joint venture with Ram Gopal Verma’s K Sera Sera for distribution rights of movies in select cities.
PVR Cinemas Ltd has recently forayed into the distribution of Hollywood film titles through its subsidiary, PVR Pictures. PVR has also gone for a new brand, PVR Talkies, for its presence in tier-II and III locations. The company plans to operate 208 screens in five years’ time.
Fun Multiplex Pvt Ltd
Fun Multiplex Pvt Ltd, part of E-City Ventures, is represented in the multiplex industry by its Fun Republic and Fun Junction formats, apart from leased theatres. The company currently operates 95 screens across 25 cineplexes in 10 cities (Ahmedabad, Mumbai, Chandigarh, Delhi, Ghaziabad, Jaipur, Agra, Lucknow, Panipat and Gulbarga).
Fun Multiplex plans on running a total of 150 screens by end-2008, with plans of operating another 300 screens by FY 2011 across 23 cities in India. The company also aims to bring 1,500 cinema screens under its fold by 2011 (including digital, single screen refurbishments as well as multiplex formats).
INOX Leisure Ltd
INOX Leisure Ltd is the entertainment venture of the INOX Group, a subsidiary of Gujarat Flurochemicals Ltd. INOX pioneered the concept of regional film screening in India; while INOX, Pune, was the first multiplex in the country to introduce the concept of a Preview Club.
The multiplex chain is currently running 54 screens at 15 multiplexes in India. The multiplex chain has a total audience capacity of 16,700 seats at present, and plans to operate 165 screens by 2012. Its merger with CCPL (89 Cinemas) has given INOX access to an additional eight multiplexes in West Bengal and Assam.
Shringar Films Pvt Ltd
Shringar Films Pvt Ltd was founded in 1975, with the distribution of Bollywood films as the company’s core area of operation. Operating the chain of Fame Cinemas, the company gave Mumbai its first five-screen multiplex and its first IMAX theatre. It today has a total of 30 screens in seven complexes. By 2009 the chain targets a sprawling presence with approximately 52,000 seats.
M2K Cinemas
M2K Cinemas from the M2K Group initially started off with a multiplex at Rohini, Delhi. Its second outlet was also at Delhi’s Pitampura area. At present M2K Cinemas operates five screens at two multiplexes. The company plans to add 500 multiplexes by 2010.
UFO Movies Digital Cinema Solutions
UFO Movies Digital Cinema Solutions is a global end-to-end Digital Cinema System equipped with advanced features such as real time satellite delivery, Smart Card-based licensing and high-end management information systems. UFO Movies delivers digitally mastered, high-quality movie images through satellite directly to cinema halls.
At the recently concluded IIFA awards in the UK, UFO Movies received the ‘Innovation in Indian Cinema Award’. The largest digital cinema chain in the world, it has plans to digitise 2,000 screens by FY 2007-08. At present UFO Movies has digitised more than 750 screens in India and has plans of digitising many more.
For once, the business of entertainment retail and the entrepreneurial skills behind Indian showbiz has become just as exciting as thriller movie plots and on-screen histrionic talents. There are as many mushrooming multiplexes as there are malls -- and more are joining the brigade with old-style single-screen theatres being converted into three and four-screen cineplexes by big movie exhibition retail chains. What’s more, the retail boom has even managed to affect the movie-making industry by engendering a whole new breed of ‘multiplex cinemas’ that urban Indian audiences are lapping up. With gaming zones, malls with attached theme parks, and satellite radio lounges pitching in too entertainment retail in India has never had it so good. SAON BHATTACHARYA catches the drama behind the curtains…
That movies are the biggest entertainment avenue for India’s billions is a no-brainer. And that the best development to have happened to the Indian entertainment business in years has been the growth of multiplexes is also a known fact. But having said that it also remains a fact that in India, there are only 12 screens per 10 lakh population compared to 117 screens per 10 lakh in the US and more than 40 screens for European nations. The multiplex business is clearly a fledgling industry at the moment with huge potential.
With the increasing acceptance of organised retailing in urban India, there has been a growing demand for quality retail space from large F&G retailers, fashion apparel chains as well as from multiplex operators. As a result, multiplex growth in the country has been proportional to mall growth. According to IMAGES F&R Research, currently India has about 200 operational malls, which is expected to rise to 600 by 2010-11. Within the next three years, therefore, the number of movie exhibition screens, seats and audience capacity are also expected to grow simultaneously.
But what is interesting to note at this stage is that even though multiplex space supply is almost at par with retail space supply, the cinema exhibition business is only about a fifth of the total retail business in India. This is an indicator of the fact that either multiplexes at present are in excess of the expected market size, or that multiplex business needs to explore virgin territories other than that of the over-supplied metros.
LEISURE & ENTERTAINMENT MARKET SIZE
Riding the economic growth and rising affluence levels that India has been witnessing in the last few years, the Indian entertainment industry has been growing at a rapid pace. From books and music to gifts and movies, there has been a growth in almost all segments of leisure and entertainment. According to IMAGES F&R Research estimates based on CSO National Accounts Statistics 2006 (Statement-14), consumer spend on leisure and entertainment grew 24.2 percent in 2004-05 over the previous financial year spend of Rs.29,360 crore.
The total entertainment retail market in India is currently estimated at Rs.35,000 crore, out of which the share of the organised segment is just about four percent -- at Rs.1,450 crore. Currently this organised segment has seen a growth of 14.3 per cent over last year, with a year-on-year growth of over 44 per cent in the last two years.
The Indian entertainment industry is further expected to grow to more than Rs.58,800 crore by 2010. The multiplex industry, for its part, is expected to grow at over 44 percent a year to about Rs.90 crore by 2008, while the Indian film industry (currently worth about Rs.8,000 crore or US$ 2 billion) is expected to grow to Rs.17,400 crore (US$4.3 billion) by 2011.
The Indian film industry continues to be the largest in the world in terms of the number of films produced. The encouraging growth in the number of multiplexes has also enabled moviegoers, especially in urban India, to add a new dimension to their movie viewing experience. However, the overall number of screens in the country remained approximately the same since multiplexes have only managed to compensate for the closure of several single screen theatres across the country.
The total entertainment retail market in India is currently estimated at Rs.35,000 crore, out of which the share of the organised segment is just about four percent -- at Rs.1,450 crore. Currently this organised segment has seen a growth of 14.3 per cent over last year, with a year-on-year growth of over 44 per cent in the last two years.
The Indian entertainment industry is further expected to grow to more than Rs.58,800 crore by 2010. The multiplex industry, for its part, is expected to grow at over 44 percent a year to about Rs.90 crore by 2008, while the Indian film industry (currently worth about Rs.8,000 crore or US$ 2 billion) is expected to grow to Rs.17,400 crore (US$4.3 billion) by 2011.
The Indian film industry continues to be the largest in the world in terms of the number of films produced. The encouraging growth in the number of multiplexes has also enabled moviegoers, especially in urban India, to add a new dimension to their movie viewing experience. However, the overall number of screens in the country remained approximately the same since multiplexes have only managed to compensate for the closure of several single screen theatres across the country.
MAJOR PLAYERS
Adlabs Cinemas
Adlabs Cinemas, owned by the Anil Dhirubhai Ambani Group (ADAG), was launched in 2000 with the opening of the world's largest IMAX dome theatre and a four-screen multiplex in Wadala, Mumbai. Adlabs operated four multiplexes (three in Mumbai and one in Nasik), with a total of 12 screens and an audience capacity is 4,385 seats in 2005-06. Revenues stood at Rs. 34 crore in the last fiscal, with an average transaction value of Rs.130.
Today Adlabs Cinemas operates approximately 80 screens across India. The company is currently on a massive tie-up operation with multiplexes and single-screen cinema halls, as well as greenfield sites across the country, especially in Gujarat. Currently some 350-odd acquisitions, long term leases and management contracts (with single-screen theatres) have been targeted in the first phase of expansions. Most of these new alliances are in tier-II cities like Indore, Meerut, Allahabad and Belgaum.
Around 700 movie halls will be targeted over the next few years, most of which will be converted either into multiplexes or into prime single-screen destinations like the company’s Metro Adlabs in Mumbai. What started with the Mehul Theatre in Jamnagar, Gujarat (an Anil Ambani stronghold), which was converted into a three-screen multiplex, will now spread across India’s fast growing, prosperous small towns. Adlabs plans to come up with an investment of about Rs.100 crore in Chhattisgarh, for instance, to develop four-screen multiplexes at Raipur, Bhilai, Bilaspur, Korba, Raigarh, Ambikapur and Rajnandgaon.
ADAG’s ultimate grand plan is to utilise Reliance Infocomm’s existing fibre optic network to digitally screen movies from a central location across Adlabs Cinemas’ vast movie hall network. This strategy might also help in bringing down current multiplex ticket prices -- at least in small town India. At its current rate of expansion and acquisitions, Adlabs Cinemas will easily emerge as the largest player in the organised entertainment retail segment in India.
Pyramid Saimira Theatre Ltd
Pyramid Saimira Theatre Ltd (PSTL) is a movie theatre chain with a presence in malls, multiplexes and standalone theatres. PSTL has been acquiring theatres on long-term lease or on ownership basis. The operations of the company are centred in South India, with a retail presence in cities like Chennai, Madurai, Salem and Tirunelveli. The chain currently operates 325. The company plans to tie-up with 120 single-screen theatres in metros and 235 theatres in tier-II and III cities. PSTL has already tied-up with existing movie halls and malls in Punjab, Himachal Pradesh, Haryana and Rajasthan, for conversion into digital-friendly theatre formats.
Unlike Reliance, PSTL is involved in setting up an integrated Network Operating Center (NOC) which will convert 35 mm films into digital or d-cinema, and transmit these films via a satellite medium to various theatres across India in a secured encryption mode.
The company eventually plans to create a franchisee model for theatres in tier-II and III locations, where existing theatre owners will manage the theatres under PSTL’s branding, with a minimum assured quality. PSTL will manage the entire content, without any fixed cost exposure. By 2012, PSTL plans to operate 2,000 screens in India.
PVR Cinemas Ltd
Credited with spearheading the multiplex revolution in the country in 1997, PVR Cinemas Ltd has now established more than 82 screens at 21 complexes. The total audience capacity of PVR is 21,316 seats at present. PVR was the first movie exhibition company to introduce computerised ticketing. It was also the first to accept credit cards in India for the purchase of movie tickets; the first to offer cinema tickets over the internet with an online payment gateway; as well as the first to receive institutional funding in the cinema industry -- from ICICI Venture. It has currently entered into a joint venture with Ram Gopal Verma’s K Sera Sera for distribution rights of movies in select cities.
PVR Cinemas Ltd has recently forayed into the distribution of Hollywood film titles through its subsidiary, PVR Pictures. PVR has also gone for a new brand, PVR Talkies, for its presence in tier-II and III locations. The company plans to operate 208 screens in five years’ time.
Fun Multiplex Pvt Ltd
Fun Multiplex Pvt Ltd, part of E-City Ventures, is represented in the multiplex industry by its Fun Republic and Fun Junction formats, apart from leased theatres. The company currently operates 95 screens across 25 cineplexes in 10 cities (Ahmedabad, Mumbai, Chandigarh, Delhi, Ghaziabad, Jaipur, Agra, Lucknow, Panipat and Gulbarga).
Fun Multiplex plans on running a total of 150 screens by end-2008, with plans of operating another 300 screens by FY 2011 across 23 cities in India. The company also aims to bring 1,500 cinema screens under its fold by 2011 (including digital, single screen refurbishments as well as multiplex formats).
INOX Leisure Ltd
INOX Leisure Ltd is the entertainment venture of the INOX Group, a subsidiary of Gujarat Flurochemicals Ltd. INOX pioneered the concept of regional film screening in India; while INOX, Pune, was the first multiplex in the country to introduce the concept of a Preview Club.
The multiplex chain is currently running 54 screens at 15 multiplexes in India. The multiplex chain has a total audience capacity of 16,700 seats at present, and plans to operate 165 screens by 2012. Its merger with CCPL (89 Cinemas) has given INOX access to an additional eight multiplexes in West Bengal and Assam.
Shringar Films Pvt Ltd
Shringar Films Pvt Ltd was founded in 1975, with the distribution of Bollywood films as the company’s core area of operation. Operating the chain of Fame Cinemas, the company gave Mumbai its first five-screen multiplex and its first IMAX theatre. It today has a total of 30 screens in seven complexes. By 2009 the chain targets a sprawling presence with approximately 52,000 seats.
M2K Cinemas
M2K Cinemas from the M2K Group initially started off with a multiplex at Rohini, Delhi. Its second outlet was also at Delhi’s Pitampura area. At present M2K Cinemas operates five screens at two multiplexes. The company plans to add 500 multiplexes by 2010.
UFO Movies Digital Cinema Solutions
UFO Movies Digital Cinema Solutions is a global end-to-end Digital Cinema System equipped with advanced features such as real time satellite delivery, Smart Card-based licensing and high-end management information systems. UFO Movies delivers digitally mastered, high-quality movie images through satellite directly to cinema halls.
At the recently concluded IIFA awards in the UK, UFO Movies received the ‘Innovation in Indian Cinema Award’. The largest digital cinema chain in the world, it has plans to digitise 2,000 screens by FY 2007-08. At present UFO Movies has digitised more than 750 screens in India and has plans of digitising many more.
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