From the days of broken seats, stinking toilets, soggy popcorn, flat colas and cold samosas, to premium recliners, lounges, glossy veneers, hot biryanis, pastas and freshly brewed coffees. Yes, cinemas have seen a significant change in terms of physical and service experience. Physical including projection has not only evolved, it is now reaching newer scales. From 4K, IMAX, curved screens to now 4D. Sound has also seen growth where 7.1 is now a norm today.
On the service side too, there have been remarkable changes that one sees today — from booking tickets on apps/online to ticketless entry, tech adoption has helped convenience. Though a lot has changed for the industry, it still complains of stagnant ATPs.
Significant growth in ticket prices in metros haven’t helped as non-metros with its lower per capita income and piracy pull down the average. So how does the industry make money and grow?
The multiplex industry has gone through serious consolidation. The last five years saw top multiplex players including PVR and Inox go through a series of acquisitions which helped them build strong base of screens and stronger balance sheets. Organic growth has always been slow for the industry, but the inorganic route has helped these top players grow at phenomenal rates. The journey from zero screens to 200 took players more than 10-12 years, but reaching the 500 screen milestone was achieved in less than five years.
Today in three km vicinity, you will find at least three to four options. Profitability too has grown substantially for the top players. The biggest profitability fillip has been advertising revenues. Consolidation has given advertising the opportunity to reach out to premium audiences at one go. But with growing profits, have the number of people watching cinema grown?
There are two key drivers to footfalls: content and marketing. It is getting difficult to get consumer mindshare especially with multiple film releases in the same week. Even as the consumer tech side is making the movie consuming experience easier, why is the industry not growing at the pace of international markets?
Consumers usually combine cinema viewing with food and entertainment. Infrastructure is the big hurdle for cinema growth in India today. An investment into infrastructure, thus, is essential in the Indian context to boost the industry.
The author is media & entertainment advisor