Friday, October 12, 2007
Retail Entertainment Cover Story (cont'd)
D-CINEMA: THE NEW TECHNOLOGY
Digital cinema, or d-cinema, involves the production, delivery and projection of feature films, trailers, advertisements and other audio/visual programmes to theatres, using digital technology. The d-cinema system uses a ‘store-and-forward’ model to distribute cinema that has been digitised, compressed, encrypted and delivered to theatres using either physical media distribution or through electronic transmission methods (such as satellite or fibre-optic cables).
The number of screens around the world capable of digitally projecting movies is more than 4,000 at present; and according to industry forecasts, there will be more than 17,000 d-cinema screens in the world by 2010. Right now North America is the leading region for d-cinema screens, followed by Asia and Europe.
Some of the major advantages of d-cinema over 35 mm prints include:
· Elimination of print costs and hence, widespread release of all movies at no extra cost
· End-to-end protection of content against all forms of piracy with encryption technology
· Good AV quality at every run of the movie
Says R Kanwar, MD, UFO Movies, “We strongly feel digital cinema is the panacea for all the ills faced by the film industry. For issues such as low revenues, piracy, logistics, picture and sound quality, the only answer is digital.”
Recent progress in global d-cinema systems:
· The agreement by major Hollywood studios on a single digital standard for world-wide distribution
· The development of business models that appropriately share the cost between the studios and the exhibitors according to the benefits each derive from the process
· The availability of systems that can deliver picture quality, reliability and security standards better than 35 mm film.
In India, however, movie exhibition companies have begun their own Made-in-India experiments. E-City Entertainment, for instance, uses a model that combines the use of the 35 mm prints as well as digital programming.
Explains Atul Goel of E-City Entertainment, “ The E-City digital business model takes theatres on lease or revenue sharing. We are also into a commission structure or service fee structure for theatre owners, and eventually we lead to retrofitting which is where we add value for the theatre owner. We have targeted centres with collections greater than Rs.1 lakh/week on an average. And later when we convert those single screen theatres into a three-screen multiplex, the average collection per month raises from the current Rs.4 lakh to Rs.12 lakh. This actually delivers value to the distributor, because in the same ratio the distributor’s shares go up (probably the producer’s too). And so we create value for the entire value chain.”
Adds Ajay Bansal, CEO, Satyam Cineplexes, “Worldwide digital cinema is considered to be the next big thing in the entertainment revolution. Currently this format is at an evolutionary stage, and once it stabilises we expect digital cinema distribution to be on the way forward. It offers several benefits to the producers and exhibitors such as control over piracy, the biggest threat to the entertainment industry. It also offers ease of software distribution by providing digital content to any part of the country through satellite or otherwise.”
RETAIL BOOM TRANSFORMING ENTERTAINMENT
A recent ACNielsen study conducted to analyse the entertainment consumption pattern in India showed that multiplexes are clearly a SEC A hub, with a high student patronage. The study also revealed that 60 percent of mall (and multiplex) visitors owned plastic money, while 81 percent visited malls to watch movies. Other industry studies have also shown that malls and multiplexes are mutually beneficial to each other. While the average Indian consumer’s movie mania, coupled with star visits and movie campaigns benefit malls with footfalls, brand promotion campaigns at malls, food court and supermarket retailers also attract footfalls that ensure quality viewer back-up for the anchor multiplex in a mall.
Mall management is critical for the success of mall multiplexes since most multiplexes are located on the top-most floor; and a mall consumer’s retail experience starts at arrival. While standalone multiplexes are more in control of their audience’s experience, on the other hand additional facilities and services at malls entice customers to visit multiplexes.
Does this spell death for single screens? It is true that mall multiplexes score over standalone entities, because of their food courts, multi-cuisine restaurants, quick-buy counters and gaming zones that provide quality family entertainment. Moreover, once digitisation becomes the industry norm, exhibitors will have to shift to modern exhibition formats.
But for the moment it would do the industry good to keep in mind the fact that multiplexes constitute just about one percent of the country’s total number of cinema halls, and four to five percent of the total screen space.
Says Bansal of Satyam Cineplexes, “The multiplex industry in India is at an inflection point. Movie watching is the number one entertainment option for Indians and India boasts of the largest film industry in the world. Yet, out of 12,000 screens in India, only 300-odd are currently operated by multiplexes. This situation is changing rapidly.”
“Government encouragement to multiplex operators in the form of entertainment tax exemption is also giving a fillip to the multiplex industry. Keeping all these in mind, we expect the multiplex market to continue to grow rapidly in India, with multiplex screens growing to around 2,000 screens in the next five years,” he adds.
Moving into Tier-II Locations
Having begun to experience over-supply in urban areas, cinema exhibition companies are beginning to venture beyond metros into tier II and III cities and towns, such as Lucknow, Indore, Nasik, Aurangabad, Kanpur and Amritsar to name a few.
Major multiplex players like PVR Cinemas, Adlabs Cinemas, Inox Leisures, Shringar Cinemas, Fun Multiplex and Pyramid Saimira have arrived at small towns like Darjeeling, Pimpri, Latur, Agra and Visakhapatnam. Given that India’s small towns hardly have any other entertainment options, these chains hold huge retail potentials at these locations.
Many in the industry feel that small towns with their share of box office collections will soon drive the film exhibition space. Currently about 65 percent of total box office collections in India come from tier-II and III centres, with indications that this figure will soon rise to as high as 70 percent by 2012.
Transforming Creativity
The rise in multiplexes has also provided a fillip to low budget and experimental films -- now termed as ‘multiplex’ films -- that are released in these smaller sized auditoriums and have their own niche audiences among India’s urban movie-goers. So much so that the new ‘multiplex’ form of the movie business has changed movie scripts, production, budgets, distribution and film promos too.
Independent and experimental filmmakers agree that their kind of cinema would never have had a chance of being screened at the larger, 1,000-seater single-screens of yore. But for multiplexes with their higher-priced tickets and smaller capacities, movies like Mr and Mrs Iyer, Bheja Fry, Life in a Metro, etc. would never have seen the light of day ten years ago. Multiplexes help ensure a faster ROI for producers, besides the larger choices and quick turnarounds have also helped in an increased film output.
Digital cinema, or d-cinema, involves the production, delivery and projection of feature films, trailers, advertisements and other audio/visual programmes to theatres, using digital technology. The d-cinema system uses a ‘store-and-forward’ model to distribute cinema that has been digitised, compressed, encrypted and delivered to theatres using either physical media distribution or through electronic transmission methods (such as satellite or fibre-optic cables).
The number of screens around the world capable of digitally projecting movies is more than 4,000 at present; and according to industry forecasts, there will be more than 17,000 d-cinema screens in the world by 2010. Right now North America is the leading region for d-cinema screens, followed by Asia and Europe.
Some of the major advantages of d-cinema over 35 mm prints include:
· Elimination of print costs and hence, widespread release of all movies at no extra cost
· End-to-end protection of content against all forms of piracy with encryption technology
· Good AV quality at every run of the movie
Says R Kanwar, MD, UFO Movies, “We strongly feel digital cinema is the panacea for all the ills faced by the film industry. For issues such as low revenues, piracy, logistics, picture and sound quality, the only answer is digital.”
Recent progress in global d-cinema systems:
· The agreement by major Hollywood studios on a single digital standard for world-wide distribution
· The development of business models that appropriately share the cost between the studios and the exhibitors according to the benefits each derive from the process
· The availability of systems that can deliver picture quality, reliability and security standards better than 35 mm film.
In India, however, movie exhibition companies have begun their own Made-in-India experiments. E-City Entertainment, for instance, uses a model that combines the use of the 35 mm prints as well as digital programming.
Explains Atul Goel of E-City Entertainment, “ The E-City digital business model takes theatres on lease or revenue sharing. We are also into a commission structure or service fee structure for theatre owners, and eventually we lead to retrofitting which is where we add value for the theatre owner. We have targeted centres with collections greater than Rs.1 lakh/week on an average. And later when we convert those single screen theatres into a three-screen multiplex, the average collection per month raises from the current Rs.4 lakh to Rs.12 lakh. This actually delivers value to the distributor, because in the same ratio the distributor’s shares go up (probably the producer’s too). And so we create value for the entire value chain.”
Adds Ajay Bansal, CEO, Satyam Cineplexes, “Worldwide digital cinema is considered to be the next big thing in the entertainment revolution. Currently this format is at an evolutionary stage, and once it stabilises we expect digital cinema distribution to be on the way forward. It offers several benefits to the producers and exhibitors such as control over piracy, the biggest threat to the entertainment industry. It also offers ease of software distribution by providing digital content to any part of the country through satellite or otherwise.”
RETAIL BOOM TRANSFORMING ENTERTAINMENT
A recent ACNielsen study conducted to analyse the entertainment consumption pattern in India showed that multiplexes are clearly a SEC A hub, with a high student patronage. The study also revealed that 60 percent of mall (and multiplex) visitors owned plastic money, while 81 percent visited malls to watch movies. Other industry studies have also shown that malls and multiplexes are mutually beneficial to each other. While the average Indian consumer’s movie mania, coupled with star visits and movie campaigns benefit malls with footfalls, brand promotion campaigns at malls, food court and supermarket retailers also attract footfalls that ensure quality viewer back-up for the anchor multiplex in a mall.
Mall management is critical for the success of mall multiplexes since most multiplexes are located on the top-most floor; and a mall consumer’s retail experience starts at arrival. While standalone multiplexes are more in control of their audience’s experience, on the other hand additional facilities and services at malls entice customers to visit multiplexes.
Does this spell death for single screens? It is true that mall multiplexes score over standalone entities, because of their food courts, multi-cuisine restaurants, quick-buy counters and gaming zones that provide quality family entertainment. Moreover, once digitisation becomes the industry norm, exhibitors will have to shift to modern exhibition formats.
But for the moment it would do the industry good to keep in mind the fact that multiplexes constitute just about one percent of the country’s total number of cinema halls, and four to five percent of the total screen space.
Says Bansal of Satyam Cineplexes, “The multiplex industry in India is at an inflection point. Movie watching is the number one entertainment option for Indians and India boasts of the largest film industry in the world. Yet, out of 12,000 screens in India, only 300-odd are currently operated by multiplexes. This situation is changing rapidly.”
“Government encouragement to multiplex operators in the form of entertainment tax exemption is also giving a fillip to the multiplex industry. Keeping all these in mind, we expect the multiplex market to continue to grow rapidly in India, with multiplex screens growing to around 2,000 screens in the next five years,” he adds.
Moving into Tier-II Locations
Having begun to experience over-supply in urban areas, cinema exhibition companies are beginning to venture beyond metros into tier II and III cities and towns, such as Lucknow, Indore, Nasik, Aurangabad, Kanpur and Amritsar to name a few.
Major multiplex players like PVR Cinemas, Adlabs Cinemas, Inox Leisures, Shringar Cinemas, Fun Multiplex and Pyramid Saimira have arrived at small towns like Darjeeling, Pimpri, Latur, Agra and Visakhapatnam. Given that India’s small towns hardly have any other entertainment options, these chains hold huge retail potentials at these locations.
Many in the industry feel that small towns with their share of box office collections will soon drive the film exhibition space. Currently about 65 percent of total box office collections in India come from tier-II and III centres, with indications that this figure will soon rise to as high as 70 percent by 2012.
Transforming Creativity
The rise in multiplexes has also provided a fillip to low budget and experimental films -- now termed as ‘multiplex’ films -- that are released in these smaller sized auditoriums and have their own niche audiences among India’s urban movie-goers. So much so that the new ‘multiplex’ form of the movie business has changed movie scripts, production, budgets, distribution and film promos too.
Independent and experimental filmmakers agree that their kind of cinema would never have had a chance of being screened at the larger, 1,000-seater single-screens of yore. But for multiplexes with their higher-priced tickets and smaller capacities, movies like Mr and Mrs Iyer, Bheja Fry, Life in a Metro, etc. would never have seen the light of day ten years ago. Multiplexes help ensure a faster ROI for producers, besides the larger choices and quick turnarounds have also helped in an increased film output.
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