The cinema exhibition industry, which has witnessed significant consolidation in recent years, would have over 3,000 multiplex screens by 2019, said ratings agency ICRA.
The cinema exhibition industry, which has witnessed significant consolidation in recent years, would have over 3,000 multiplex screens by 2019, said ratings agency ICRA. Players like PVR, Inox, Carnival Cinemas and Cinepolis, which account for more than 70 per cent of the total screen count have changed the market dynamics. “ICRA expects the number of multiplex screens to cross 3,000 by 2019. Since most of the upcoming malls are being constructed in tier II and tier III cities, a majority of new screen additions would also happen in these places,” said ICRA Senior Vice-President Rohit Inamdar.
The industry would also be helped by factors as increase in discretionary spends and changing consumer preferences for an enhanced movie-watching experience.
As per ICRA estimates, India currently has around 2,200 multiplex screens.
“The multiplex industry has seen significant consolidation in recent years which has led to considerable change in market dynamics with four major multiplex chains; PVR, Inox, Carnival Cinemas and Cinepolis, emerging as the prominent players, accounting for more than 70 per cent of the total screen count of the Indian multiplex industry,” he said.
Moreover, increasing number of malls with multiplexes has also contributed to the shift from single screen theaters to multiplexes, said ICRA.
Multiplex screens in India have grown at a CAGR of 13.5 per cent during 2009 to 2016, the film exhibition industry continues to be dominated by single screen theaters which are almost three times the number of multiplex screens.
“Despite healthy growth, the screen penetration remains significantly low at six screens per million of population as compared to developed countries such as the USA, which is estimated to have over 125 screens per million of population with over 40,000 screens at the end of FY2015,” it said.
It further added players are now likely to focus on organic growth, barring small acquisitions of regional players.
“Consequently, one can expect significant capex in the near to medium term, largely to increase screen base. Given the high operating leverage in the multiplex business, industry’s overall profitability is almost entirely driven by the occupancy levels which in turn depend on the performance of films at the box office – a key risk variable,” it added.