Delhi may soon overtake Mumbai in the box office race. If the crucial Mumbai-Maharashtra market contributes one-third to the film industry’s box-office collections, Delhi, too, is fast catching up, already offering 30-35% to the BO. In fact, for some films, for example the Munnabhai films, Delhi collected more than Mumbai, say multiplex owners. ?I can see Delhi overtaking Mumbai,? claims Pramod Arora, president & CEO, PVR Ltd, ?for a variety of reasons, not least because of the fact that Delhi is able to sustain higher ticket prices and occupancy.?
The excitement at the Delhi box office has led to immense churning in the multiplex space. There’s a rush to own screens in Delhi and the national capital region, with its growing real estate spilling onto the suburbs of Gurgaon, Ghaziabad, Noida and Faridabad. ?Just the township of Dwarka can absorb two-three multiplexes,? says Jayendra Banerjee, vice-president, Satyam Cineplexes. At the moment, Satyam gets huge crowds from Dwarka in Palam Vihar to its four screens at Janakpuri.
PVR, which has 44 screens in the NCR region, would have added 26 more screens if the DT Cinemas deal had gone through. Obviously disappointed that PVR couldn?t acquire DT Cinemas ? ?we ran into a technical hitch and had to call off the deal?? Arora points out that the multiplex chain is going to put up 22 screens in two years in Delhi. PVR, which already has a majority share in the NCR market, would have commanded 70% of the market with DT. Analysts say the DT screens were coming at a reasonable price too for PVR?Rs 1 crore per screen against present market costs of Rs 1.5 crore-Rs 2 crore per screen. Analysts say there were other bidders for DT Cinemas, which had approached more than one player. ?Delhi is emerging as an important multiplex market,? says Smita Jha, associate director, PwC, ?all the players will tread carefully before they buy or sell.?
BIG Cinemas, which has just launched a hostile bid for Fame?the multiplex chain Inox has bought majority stake in?has a huge presence in the south and west, but is under-screened in the Delhi region. On February 12, BIG Cinemas, part of the Reliance Anil Dhirubhai Ambani Group, opened eight cinemas in a day?four in Gujarat and four in south India. In the south and west market, it already has 170-180-odd screens, but has only 35-odd screens in the north?it entered Delhi in 2009 with the refurbished Odeon?which it will definitely correct in the months to come. ?By 2011 we will have a much greater presence across the country,? says Anil Arjun, CEO, Reliance MediaWorks. ?We are focused on pan-India growth,? he asserts, adding, ?It?s a matter of time before we beef up our presence in the Delhi region too.? Asked whether Reliance would be interested in DT Cinemas, he says, ?I won’t comment on that.?
Though multiplex players won?t be drawn into a Delhi versus Mumbai battle, it?s a fact that those chains that have a strong presence in the west (Reliance, Inox and Fame, before it exited the business) are all looking keenly at the Delhi market. ?We are under-screened in the north,? admits Deepak Asher, director, Inox Leisure, ?it will be one of our focus areas because it needs correction.? Fame was entering the north market with four screens in Chandigarh when it decided to sell off the business.
?Besides the fact that Delhi gives us better pricing, it also has a better infrastructure, less bottlenecks while going to a multiplex compared to Mumbai, where traffic problems are immense. We also don’t see severe flare-ups in Delhi like we saw in Mumbai before My Name is Khan was released,? says Arora, holding the torch for Delhi.
But Mumbai is where movies are made and it still holds a psychological advantage over the box office. ?Maharashtra is a very important territory for BIG Cinemas, thanks to its flourishing film industry and large percentage of the nationwide box office, due to which we have the largest number of screens in the state,? Tushar Dhingra, COO, BIG Cinemas, had said when BIG crossed the 100-screen mark in western India.
Going forward, Dhingra says BIG Cinemas plans to add 100 screens by 2011 leading to a presence across 85 cities and catering to over 35 million customers. ?There is a lot of absorption capacity in the market for cinemas and that is a thrust area for us,? he adds. BIG, which has launched its first cinema in Nepal and already has a presence in the US and Malaysia, is expanding its reach in all markets locally.
But frequent disturbances in Mumbai?the terror strikes had held up the release of Dibakar Banerjee?s Oye Lucky! Lucky Oye; swine flu held up Kaminey and the Sena attack on SRK delayed the launch of My Name is Khan?are forcing multiplex chains to de-risk business. And, with Delhi nicely filling in on key parameters (pricing capacity, good infrastructure, etc), this is the new region under focus. Delhi rentals are also cheaper than Mumbai, especially in the suburban areas of NCR. ?The capital investment for building a multiplex is the same everywhere,? says a multiplex executive, ?the only difference is the rentals.?
?I admit that we lost two crucial days in Mumbai and Maharashtra for MNIK, which contribute one-third of the entire box office collection,? admits Vijay Singh, CEO, Star Fox India. The blast at German Bakery in Pune made matters worse and MNIK lost out the Valentine’s Day Sunday weekend too in the region. It’s another matter that MNIK rode on the strong overseas market to touch Rs 150 crore in 10 days, with Rs 90 crore coming from the domestic market.
?The Mumbai market already has a high concentration of multiplexes,? points out Banerjee of Satyam, ?whereas in the NCR there is a lot of scope to expand because of the amount of real estate activity happening in the region.? Satyam, which has 12 screens in Delhi and five screens at Indore, interestingly, has drawn up its expansion plan outside Delhi, to cities like Jodhpur, Mysore, Aurangabad, Rohtak and so forth. Banerjee says a pan-Indian presence will give local multiplex chains like Delhi-based Satyam a better negotiating opportunity. ?One can’t be restricted to one territory,? he says, pointing out that going to tier-II and III cities will give it the first mover advantage too.
Asher and other multiplex players expect further consolidation in the multiplex space with small, local players up for grabs. But as one multiplex player executive pointed out, on condition of anonymity, small players, especially in Delhi, are increasingly nervous about multiplex players, ?especially the one with deep pockets?. The NCR region alone can absorb 30 more screens easily and more with the population expanding. With retail plans coming back on track slowly after revival signs in the economy, smaller players concede that the going will be difficult in the face of money and muscle-power and big plans of bigger players.