In order to bring in incremental revenues over and above what is generated by films, multiplexes are turning to live screening of sports (also called ‘event cinema’).
Multiplex chain INOX is all set to screen all the nine league matches played by the Indian team in the ICC World Cup 2019, along with the semi-finals, final and a few marquee league matches. These matches will be screened across 12 cities, including Pune, Jaipur, Indore, Vadodara and Surat.
Meanwhile, PVR, which screened WrestleMania35 in April this year in six cities, will also screen the UEFA Champions League finals in five cities — Mumbai, New Delhi, Pune, Kolkata and Chennai.
In order to bring in incremental revenues over and above what is generated by films, multiplexes are turning to live screening of sports (also called ‘event cinema’). Multiplex chains such as PVR Cinemas, INOX Leisure and Cinépolis view this as a strategic offering to cater to niche audiences.
As per Girish Menon, partner and head, media and entertainment, KPMG India, event cinema could help make business more stable by using existing seating capacity for big matches when occupancy at theatres is going to be low anyway.
But to ensure revenues either in ticketing or advertising, theatres need to work on getting consistent footfalls. The average occupancy rate in multiplexes is 30%. For anything less than 25%, screening of an event or film is not profitable.
In addition to ticketing and F&B revenues, multiplexes typically make money by charging a premium of as high as 300% in ad rates for a blockbuster or a mega blockbuster. For example, the average advertising rate per week at PVR in Delhi could range from Rs 30,000-Rs 2.5 lakh for the entire cinema with a capacity of 1,100-1,200 seats. However, these high-ticket sports events are yet to attract premium ad rates because of limited screening events and footfalls.
Broadcaster Sony Pictures Sports Network, which has tied up with PVR for live screening of UEFA Champions League, views cinema screening as a value-added offering to advertisers.
The focus on occupancy also becomes important; while for movies nearly 45-50% of the ticket price is paid to the distributor, in event cinema, too, a minimum guarantee (licence fee) and revenue sharing agreements can corner nearly half of the ticket price.
“For sports such as cricket, whose potential is very well recognised, there is both minimum guarantee and revenue share,” says Dharmesh Datta, VP and head, marketing, PVR Pictures. However, for niche sports like football, there is only a revenue sharing setup with the broadcaster. “It is just like films, where in the first week there is nearly equal split between the exhibitor and distributor,” Datta adds.
Currently ICC is charging $1,000 for spectator capacity of less than 1,000 on a per match basis. In fact, according to a media planner, the focus right now is not on getting premium ad rates but on selling tickets. Currently 95% of ticket buying is sponsored.
“Screening of live sports events will take time to gain momentum in terms of monetisation,” says Sandeep Goyal, chairman, Mogae Media. According to him, concepts like an IPL Fan Park could work well, where 35,000-40,000 people gather for a stadium-like experience.
However, with a cult-like following for sports in India, particularly cricket, sports could be a sound alternative content avenue for multiplexes. “Event cinema has the potential to draw incremental footfalls and new consumer sets. For example, UEFA Champions League is followed by the SEC A urban class, who may not follow mainstream Bollywood or cricket,” says Datta.
In addition to getting incremental footfalls, PVR also sees this as an advertising opportunity where brands that currently don’t advertise on cinema, such as Budweiser, Heineken and Volkswagen, can partner with multiplexes, launch loyalty programmes and invite fans to watch.
Meanwhile, INOX sees this as an opportunity to boost its F&B and service offerings, while also working with brands for on-screen and ambient advertising. Furthermore, Cinépolis was the first exhibitor to broadcast of the FIFA World Cup 2018 knockout games, and according to Devang Sampat, director, strategic initiatives, Cinépolis India, “These sporting events are great opportunities for brands to come on board with sponsorships or to associate with big-ticket sporting events without having to pay exorbitant prices.”