The fifth largest global multiplex player in the world, by number of screens, the Mexico-based Cinepolis has firmed up plans to establish presence in India. The multiplex giant has plans to invest around Rs 1,700 crore in setting up 500 screens in the next seven years and the first property is expected to come up in the second half of this year. Soma Das of Fe caught up with Milan Saini, managing director, Cinepolis India and Javier Sotomayor, strategy head, Cinepolis. Excerpts:
Have you identified sites for the multiplexes in India and are you targeting specific geographies ?
Milan: We have identified and already signed deals for around 110 screens in eight cities. Our aim is to set up 500 screens by 2016 in around 40 cities. We are currently in talks with over 200 real estate developers to finalise and seal deals on locations. Our strategy is to create pan-India presence as our engagement with India is going to be long-term.
Are you planning to develop all the properties in and around malls? Also what is the nature of business partnerships that you have adopted with real estate players?
Milan: Almost all our properties with a few exceptions would be in partnership with high-end large sized malls or hypermarts. That is because we believe that malls and multiplex have natural synergy. While multiplex in a mall is a definite crowd puller and increases the footfalls manifold, a trend Cinepolis has proved in Mexico, we can also benefit from the impulse demand of shoppers to moviegoers.
Stand-alone theatres in prime locations are perhaps not the best of land uses in terms of economics. Also they are usually found wanting in providing parking space and other comforts. Cinepolis, being an end-to-end service provider in the multiples experience is acutely conscious of these needs of the consumer. As far as nature of business partnership with real estate players is concerned, most of the agreements are revenue sharing arrangement.
When will Cinepolis break even here?
Milan: From the operational point of view, the business has to start delivering from the first month. Otherwise we have some internal targets, which we cannot reveal.
Cinepolis being an international player are well positioned to showcase international content in India.
Javier: It is a possibility we would explore and experiment. In a megaplex for instance if we have around 12 screens, we could devote one screen and gauge response. Internationally we hold film festivals for such niche audience.
What are the other differentiators that Cinepolis would bring to India?
Milan: We would experiment with alternative content like sporting events and music concerts. We would also bring in 3-D experience in a more meaningful manner. Our international experience shows that 3-D is the next big thing and people are ready to shell out 30 to 40% extra for the ticket price for that.
Which are the other global markets that you are exploring ?
Javier: Our focus of expansion is emerging markets as the developed markets are already saturated. However, India is going to keep us busy for next 15 to 20 years. In next few years time, India would start receiving the largest chunk of our investments outside of Mexico.