Advertising, F&B are key growth verticals: Alok Tandon, CEO, INOX Leisure

By: | Published: November 2, 2018 12:53 AM

With approximately 11% market share in domestic box office collections, INOX Leisure (INOL) is looking at both organic and inorganic growth to expand its operations.

OTT focusses on original content produced by the platform, whereas a film is not available on OTT until six to eight weeks after it hits the theatres.

With approximately 11% market share in domestic box office collections, INOX Leisure (INOL) is looking at both organic and inorganic growth to expand its operations. Alok Tandon, over a conversation with Ankita Rai, discusses the company’s growth plan, its aspirational positioning across formats, the importance of ancillary revenue streams and why there is no real threat from OTT players.

Edited excerpts:

What is INOL’s expansion plan? What is the positioning you are aiming for?
INOL is present in 66 cities today. We have 131 properties and 529 screens, and counting, across 19 states including tier II, III and IV cities. We have signed on 800 more screens, which will come up in the next couple of years. The 60-65 screens that we plan to open every year will be a mix of regular screens, Insignia screens, IMAX screens and Kiddles. We spend around `2.5-3 crore per screen. That’s the budget for expansion and capex. The positioning is aspirational across formats. A format like Insignia is an amalgamation of luxury, technology and service. Customers are discerning, so we plan different formats to cater to different tastes.
INOL has been promoting its own platform — web and app — to sell tickets, in addition to tie-ups with third-party players. What is the business advantage?
While we do sell through third party portals like Paytm for higher reach, we see a lot of traction on our website too. We run promotions and offer deals to consumers every day. On an average, 42-45% tickets are sold online. However, the focus is on promoting our website and app, and encouraging people to use our platform. The idea is to have a 360-degree approach — from ease of booking to curated F&B and a luxurious cinema experience.

With streaming and OTT platforms offering never-before access to films, is the footfall in multiplexes going down?
The consumption is totally different. OTT focusses on original content produced by the platform, whereas a film is not available on OTT until six to eight weeks after it hits the theatres. Nothing can replicate the experience of watching a movie on the big screen. OTT platforms have been in the US for a long time, but Hollywood’s box office collections have been increasing.

According to an EY report, multiplexes and single screens contributed equally (50%) to domestic theatricals in 2017. Why, then, are single screens diminishing?
We have three single screens — one in Delhi and two in Mumbai. The focus is on multiplexes to offer more choices to patrons and flexibility in programming. Single screens are diminishing because they don’t offer that. They can only show five to six movies per day and limited titles. Today, at least 10-12 titles are released every week. So, unless you have the flexibility to show more titles, people will not come.

How big is non-ticket revenue?
Advertising and F&B are sources of non-ticket revenue for us and important growth verticals. With media planners we see how best to leverage the real estate in terms of lobby, walls and screens. The idea is to go beyond vanilla advertising. We saw 20% growth in advertising revenue in Q1 in the current fiscal (y-o-y). The share of advertising revenue is around 10% for INOL; 60-65% revenue comes from ticket sales. Our net F&B income increased by 8%, from Rs 284 crore in FY17 to Rs 306 crore in FY18.

Are the steep food and ticket prices impacting footfall at multiplexes?
Footfall is a product of content. Multiplexes only exhibit the movie. If one looks at the entire Indian film industry, the collections have increased year on year. More multiplexes have opened up. Our pricing is as per the paying propensity of people and cost structure of the property. In Q1 this year, the average ticket price was `199 across 529 screens, which is not high at all. Even food items are differently priced across theatres.
How much do Hollywood movies contribute to INOL’s revenue?
Lately, Bollywood content has diversified with the increase of Hollywood and regional movies’ revenue share. With four or five screens at each property, exhibitors are able to mix and match the needs of the audience. Typically, the revenues for multiplexes are driven by Bollywood movies. At INOL,
Hollywood contributes around 15-20% in revenue, depending on the movie released.

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