Multiplex operators strike gold in Bollywood-mad India

Nov 29 2013, 13:56 IST
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Cinema-goers queue for a security check at a PVR multiplex  Cinema-goers queue for a security check at a PVR multiplex

For a country that produces twice as many movies a year as Hollywood, India has a problem that's making cinema theatre operators beam: a shortage of modern multi-screen cinemas and plenty of increasingly affluent film fans. Multiplex operators like PVR Ltd , Inox Leisure, Reliance Mediaworks and Mexican chain Cinepolis are scrambling to set up theatres targeting the rapidly growing number of middle-class Indians willing to pay to watch Bollywood movies in more comfortable surroundings. These plush theatres, often in big city shopping malls, are a far cry from the single-screen cinemas most Indians still frequent and which range from huge, purpose-built halls to sheds where the deluxe seats are wooden benches.

The potential is huge, provided operators can find the right location in a country where prime urban real estate is costly and in short supply.

Multiplexes account for just 8 per cent of India’s 12,000 screens but rake in a third of total box-office receipts, according to the Single Screen Association of India and a report by consultants KPMG and the Federation of Indian Chambers of Commerce and Industry (FICCI).

Averaging 160 rupees each, tickets at Indian multiplexes cost almost three times more than a ticket at single-screen cinemas, the KPMG-FICCI report said. At the Inox multiplex in a prime Mumbai area, tickets for a recent showing of blockbuster Krrish 3 sold for as much as Rs.380 each.

“Indians love their movies, their Bollywood stars and the middle class is increasingly ready to spend on a better movie-watching experience,” said Pramod Arora, president of India’s biggest movie theatre operator PVR, which expects revenue growth of 25 per cent a year for the next three years.

By comparison, KPMG forecasts overall film industry revenues to grow 10.8 per cent a year through to 2017. “We want to grow in the bigger metro areas as they have limited real estate available and we want to capture all that first because that represents the prime consumption story in this country,” Arora added.

Movie madness

Multiplexes made it to India with the advent of modern shopping malls in the past decade or so. PVR set up India’s first multiplex in 1997. Last year, it acquired rival Cinemax and has seen its share price double this year. India has just 8 screens per million people, far less than the 117 per million in the United States and 31 per million in China, according to the KPMG-FICCI report.

PVR runs 398

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