3 min read.Updated: 25 Jan 2021, 12:49 PM ISTLata Jha
Dominated by single screens, growth opportunity for multiplex chains down south is driving investments
NEW DELHI :
Multiplex chains are looking to expand their footprint in south India—a market which has so far been dominated by single screens—enthused by the return of audiences in huge numbers ever since cinemas were allowed to resume operations despite the covid crisis.
Around 1,000 new multiplexes could come up in the south over the next five years, with the five states accounting for nearly 60% of all new multiplex properties, trade experts said. Besides Chennai, Hyderabad and Bengaluru, cinema chains are looking to penetrate into smaller markets, such as Tumkur, Vizag, Vijaywada, Gulbarga and Belgaum. Some chains may even consider taking over existing single screens.
“Driven by unparalleled passion for movies, the role of south Indian audiences as well as content made in those languages is phenomenal in the Indian cinema industry landscape. It is this prevalent passion, and the sheer quality of content, which make the geography rewarding from the cinema exhibition business perspective," Shirish Handa, chief business development officer, INOX Leisure Ltd, said. Every third screen that INOX opens in India over the next 18 months will be deployed in south India, he added.
“The south Indian market is socially more inclined to movie viewing, resulting in higher occupancy levels and more repeat visits due to significant releases of regional movies in the south. A cinema can have five times the level of content, including multilingual content, which is more than any other part of the country," Gautam Dutta, chief executive officer, PVR Cinemas, said.
In the south, cinema-goers not only throng theatres for Kannada, Telugu, Malayalam and Tamil films, but also a propensity for consuming English and Hindi movies. Most south Indian stars are like demigods for their fans and movies featuring them draw huge crowds, as they can connect with the masses and classes, Dutta added. PVR is looking to open theatres in Bengaluru, Mysore, Chennai, Hyderabad, Coimbatore and Vizag.
Devang Sampat, deputy chief executive officer, Cinepolis India, said the five states averages around 200,000 viewers per screen per year compared to that pan-India figure of 120,000. This is not surprising considering the quality of content, the strong emotional pitch behind every script and visual appeal, which manifest in blockbusters such as the Baahubali franchise, Sampat said.
To be sure, south India has traditionally been dominated by single screens, which are doing robust business, compared to north Indian peers, with the industry releasing universally-appealing commercial entertainers at regular intervals. But now, multiplexes are gaining momentum. “The last five years have seen rapid growth in the multiplex market and this trend will continue. The focus has shifted from national to regional markets," PVR’s Dutta said. “For a developer, a multiplex becomes the preferred entertainment attraction in a mall as the customer is looking to maximize the leisure time at his disposal with dining, shopping, kids’ entertainment and movies at the same destination. Malls meet this inherent need while a multiplex provides a wide range of show timings and content for a customer to choose from," Dutta added.
However, challenges remain. Dutta said malls are opening only in major south Indian cities, ignoring tier-two and tier-three towns, thereby restricting growth of the multiplex business.
“The problem with south India is that the five states contribute more than 40% of the total box office. But apart from Bengaluru, Hyderabad and Chennai, most territories remain untouched by multiplexes," said Amit Sharma, chief executive, Miraj Cinemas. One of the biggest drawbacks (in south India) is a cap in ticket prices in Tamil Nadu, Andhra Pradesh and Telangana. "Multiplexes can’t sell tickets priced over Rs. 150-190," Sharma said. That obviously restricts the kind of technologies or luxury experiences that theatres can look at introducing, he added.
Since theatres were allowed to reopen on 15 October, Miraj launched properties in Raichur, Hyderabad and Coimbatore, and is looking at new screens in Hyderabad, Chennai and Bengaluru.
Besides, Tamil Nadu also levy local body entertainment tax (LBET). “While the capital expenditure will be higher since you invest in laser technology or Atmos sound that people appreciate, given their strong movie-viewing culture, it makes for a difficult proposition from an ROI (return on investment) perspective even though footfalls are high," Sharma said.