
Screen Wars: India's multiplexes go slow on expansion amid box office woes

Summary
India's cinema screen expansion is slowing due to a lacklustre box office and high real estate prices. Multiplex chains are strategically planning new openings while emphasising upgrades that promise better returns to ensure long-term viability.India's multiplex boom may be losing steam. With the box office struggling to deliver consistent hits, especially in the Hindi belt, leading chains are slowing their expansion plans, prioritising sustainability over aggressive growth.
Leading multiplex chains can add 180-200 new screens over the next two years, but consistent closures of underperforming screens continue to offset this growth. Industry experts note delays and adjustments in expansion plans, even as the pandemic-induced slump has largely eased.
The focus is now on sustainable growth rather than aggressive expansion and a 10-20% slowdown has been witnessed in expansion plans compared to pre-pandemic days when openings were at their peak.
“The number of screens being planned this year are significantly lower than seen in previous years," Anuj Kejriwal, CEO and managing director - ANAROCK Retail said.
Also read: Why Hollywood will be looking to Superman and Snow White to rescue it in India
The current state of the box office makes it difficult to justify large investments in upgrades and refurbishments, Kejriwal added.
However, these investments are crucial for long-term sustainability and maintaining a competitive edge. Cinema operators are carefully balancing these factors, prioritising upgrades that offer the highest return on investment.
To be sure, the perception of South India as a high-performing market is driving many existing expansion plans.
Amit Sharma, managing director, Miraj Entertainment, which operates multiplex theatres agreed 2024 was one of the worst years as far as lukewarm box office goes. However, the company is still looking to open 25-30 screens this year.
“There has been some delay in plans, though not significant. While we have also walked out of deals that didn’t seem feasible, we are planning new screens in Delhi, Patiala, Kolkata, Rajasthan, Uttar Pradesh and Hyderabad. The idea is to be selective and conscious of competition within a five kilometre radius," Sharma said.
Meanwhile, another multiplex chain Cinepolis India too targets to inaugurate 60-70 new screens annually. In the current year, the company will solidify its presence in key cities such as Delhi, Navi Mumbai, Gurgaon, Bhopal, and Patna, while simultaneously venturing into new markets like Kannur and Faridabad.
Also read: Bollywood set for ‘overkill’ with 50 film sequels slated for release in next two years
“While box office trends certainly play a role, we believe that factors like securing suitable real estate, collaborating with aligned developers, and streamlining licensing procedures are more crucial determinants of success. To this end, Cinepolis is looking at partnering with like-minded developers who are willing to fully invest in cinema construction, while we will operate the facilities on a fee-based arrangement," Devang Sampat, managing director, Cinepolis India said.
India has long grappled with a dismal screen-to-population ratio. While the US boasts 125 screens per million people and the UK 60, India lags far behind with just 8 screens per million, as highlighted in the Ficci-EY media and entertainment report 2019.
The stark imbalance in India’s screen count stems from factors like challenging economics, limited incentives, and a disconnect between audiences and content. Adding to the woes is the prohibitive cost of real estate. However, exhibitors are increasingly collaborating with mall developers, particularly in tier-two and tier-three cities, to tap into their untapped potential.
Also read: Theatres brace for tepid start to the year as initial Bollywood line-up disappoints
“We are opening in markets that are under saturated but still offer a fairly large catchment that is willing to come and patronise the movies. These will not be the most expensive multiplexes but will offer value for money for us as investors, our partners and patrons as well," said Rahul Puri, managing director, Mukta Arts and Mukta A2 Cinemas.
It would be wrong to say that people in India don’t want to go to theatres, Puri added. They are in fact, not getting adequate reasons to do so, in light of other entertainment options. That said, the company will roll out new screens in Noida, Gujarat, Rajasthan and Telangana.