Mumbai: Ashish Bhandari, 37, recalls the happy faces of migrant workers at CTM, an industrial area on the outskirts of Ahmedabad, when they saw the Hindi film Bol Bachchan, an action-comedy starring Abhishek Bachchan and Ajay Devgn, on Day 1 of its all-India release on 6 July.
The workers from Bihar and Jharkhand, who are employed in manufacturing units in the area, had no source of entertainment in the vicinity. When they wanted to see a movie, they had to travel 15km to Ahmedabad to watch it after buying a ticket they could barely afford.
“Besides, women and children could never come and watch a film for their entertainment,” said Bhandari, co-founder and managing director of United Mediaworks Pvt. Ltd, which runs a chain of digital single screens under the brand name Nukkad Entertainment, which takes its name from the Hindi word for street corner.
The people who watched Bol Bachchan at the Nukkad cinema on the day of its release paid a quarter of the price of a ticket in a typical city multiplex.
United Mediaworks was started by Bhandari and his brother Sachin, 35, who own textile company United Textile Mills Pvt. Ltd, along with Pradeep Tapadiya, founder of Software Labs, a data migration, integration and management solution provider.
Nukkad set up its first theatre at CTM in June-July and began by screening Bhojpuri films. The first big Hindi film it exhibited was Bol Bachchan. Gangs of Wasseypur, OMG: Oh My God!, Son Of Sardaar and Talaash have since been screened in the 100-150 seater auditorium. It offers the ambience of a Metro-centric theatre, with push-back seats for the audience, for example.
“The idea was to provide village audiences the feel of a multiplex, its ambience, refined viewing experience, although in a single-screen theatre that is digitized and at a price they can afford,” said Bhandari.
Bhandari said he and his brother and their partner Tapadiya were inspired by the examples of Pantaloon Retail (India) Ltd’s Big Bazaar hypermarket chain, the retail format for the masses, and Reliance Communications Ltd that took the lead in making mobile phone calls affordable for the consumers by offering value formats and services.
“In India, the criteria always has been affordability, the paying capacity of an end-user,” Bhandari said. “And so we saw potential in introducing a value format in film industry. Our product/service verticals are meant to cater to the entertainment needs of Indian masses, offering filmed entertainment at affordable pricing.”
Nukkad seeks to cater to the untapped semi-urban and rural Indian regions. In October, Umreth, a village in Gujarat, got its first Nukkad cinema hall. People of the village no longer need to travel 25km to Anand, the hub of milk cooperatives in India, to watch a movie.
United Mediaworks has patented its own technology called Digibutor for digital cinema that assists in digital content security and distribution. In the last five months, it has set up three mini-luxury digital cinema halls—two in Gujarat and one in Bikaner in Rajasthan.
“Our focus is on catering to the entertainment needs of the masses in an affordable manner, for which our strategy is to increase presence across India through the business associate model,” said Bhandari.
Being a new entrant, United Mediaworks faced its share of challenges.
“Initially, (film) distributors were a bit reluctant to share films on our digital cinema platform. It took a lot of convincing and presentations to make them aware of our processes. We explained our plan of action to curb piracy by introducing Nukkad cinema halls at the grass-roots level,” said Bhandari.
Under the business associate model, any individual/company or an existing video parlour owner can associate with United Mediaworks by investing around Rs.15-17 lakh for a 100-150 seater digital cinema hall that fits in an approximately 1,400 sq. ft area.
A ticket costs just Rs.40 on Fridays, and Rs.50 on Saturdays and Sundays. The average price of a ticket at multiplexes in a city is Rs.200.
The cinema hall set up under this deal retains the brand name Nukkad, while United Mediaworks gets around Rs.150 per show screened as its service fee. A Nukkad cinema hall holds five shows per day.
Up until now, United Mediaworks has invested around Rs.12 crore in developing its technology, infrastructure and flagship cinema halls. The company estimates it will recover its investment in one year.
“In the first phase of operations in the state of Rajasthan, we intend to invest Rs.50 crore in developing 200 cinema halls by next year through the business associate model,” added Bhandari.
United Mediaworks has in its pipeline 27 Nukkad cinema halls to be set up in Rajasthan and 60 in Madhya Pradesh. “We are working on entering the North-East, which has got huge potential, apart from Haryana and Himachal Pradesh,” said Bhandari.
The single screens in the country have been losing share to multiplexes in tier I and II cities. Single screens also lack programming flexibility.
“However, multiplexes cater to a certain income group that fall under certain geographies and demographics,” said an executive from a leading film production/distribution company. “Most production/distribution companies have been losing box-office collections from semi-urban and rural markets due to piracy and non-availability of cinema halls.” The executive didn’t want to be named.
Experts say the emergence of digital distribution of movies has helped capture a new set of audiences and earn additional revenue.
India’s multiplex screens are estimated to double to over 2,200 by 2016, according to the 2012 media and entertainment report by the Federation of Indian Chambers of Commerce and Industry (Ficci) lobby group and consultancy KPMG.
“Digital prints have spearheaded the 2,000-plus (screens) opening day release for big budget films,” said the Ficci-KPMG report. “The industry expects the analog print format to fade away by 2016.”
“A business like that of Nukkad’s has huge potential for the opportunity that lies in tier II and III regions, where multiplexes have shied away due to high rentals and mall development, low-income population and so on,” said Jehil Thakkar, head of media and entertainment at KPMG. “What works in their favour is that they have kept their costs low by building small capacity (seating) with better viewing experience at a price point that provides value in such markets.”