Shringar has in principle agreed to acquire a stake in the digital movie distribution company, said Adlabs Films managing director Manmohan Shetty.
When contacted, Mukta Arts chief executive officer Pankaj Sethi said that, Discussions are under way with Shringar. They have shown a keen interest in joining on as an equity partner.
The MoU (memorandum of understanding) is yet to be signed. Shringar Cinemas director Shravan Shroff declined to comment on the issue.
The project cost for retrofitting 400 B class theatres across India will be around Rs 65 crore. The company, which is called Mukta Adlabs Digital Exhibition Ltd, will make an initial investment of Rs 25 crore to retrofit 100 theatres in Punjab, Uttar Pradesh, Bengal and Bihar in the first phase.
We will study the project after the first phase and decide on the model of funding. Though, the upgrading of the targeted theatres will involve an additional cost of around Rs 40 crore, the funding model will depend on an assessment of the results in the first phase, said Mr Sethi.
The conversion of movies into a digital format is aimed at saving distribution costs, besides providing better picture quality in terms of imaging and colour. It will also help in controlling piracy, thus benefiting film distributors and cinema owners.
Retrofitting of a theatre involves installing a digital film server and a digital projector in the hall. The feature film, which will be stored in a high-capacity disk drive, will be digitally encrypted and capable of being distributed to various theatres. The digital projection device through a server will avoid the use of film prints which cost between Rs 50,000 and 60,000 to the distributor and will enable audiences of B and C class centres to watch latest films on the first day of its worldwide release.
We are not fostering fibre optic or satellite modes at the moment. But the server has a capability of catering to multiple platforms of delivery, said Mr Sethi.
The company has already signed up with ten theatres in UP. We have 3-5 year contracts with the theatre owners. We plan to cover 100 theatres in the next three months. Our plan is to reach 400 theatres across India within one year, said Mr Sethi.
The company has partnered with Singapore technology firm GDC for the new digital projectors. The business concept involves digital film encoding, encryption, storage, delivery and exhibition.