A Study On Impact Of Multiplex Cinema's In India

A STUDY ON IMPACT OF MULTIPLEX CINEMA”S IN INDIA Ashwin B. Sonone* Rajendra N. Pathak**

ABSTRACT The cinema exhibition industry in India is growing at 10% per annum driven by multiplexes, which are expanding rapidly in major metropolitan cities as well as second and third tier cities. Favorable demographics in a cinema-crazy nation, tax exemptions, and quality locations such as malls, are driving growth of multiplexes in India. The study provides a snapshot of the market including the two segments multiplexes and single screen cinemas. An overview gives a quick picture of the market with estimated market size, growth rate and theater distribution in India. Various business models adopted by Indian multiplex operators are presented along with typical revenue streams and cost base. An analysis of drivers reveals that on the supply side - growth in film industry, improving real estate supply, and favorable tax exemptions have help in growth of this sector while on the demand side favorable demographics, rising income levels and willingness of people to spend on entertainment are increasing footfalls. The key challenges identified include slowdown in economy, alternate modes of entertainment, development delays, piracy and uncertainty over entertainment tax exemptions. The industry is characterized by seasonality, low screen density, increasing average ticket prices, and reducing shelf life of movies. The key trends identified include producers bypassing distributors, shift to digital cinema, and alternate content in multiplexes, retail partnerships, and new single screen formats. India's craze for films has not been fully exploited by the "Film Exhibition" industry due to the lack of screen density in the country coupled with the poor quality of screens. "Multiplex Cinemas" offer an alternative to tap this potential by providing a quality experience to the viewer as well as economies to the multiplex operator. "Films" has been one of the integral components of the Indian entertainment industry contributing nearly 27% of the total revenues of the entertainment industry. Besides, films also contribute to other components of the entertainment industry like music, television and live entertainment. The Indian film industry is one of the most complex and fragmented national film industries in the world comprising of a number of regional film industries like Hindi, Tamil, Telugu, Kannada and others. The Hindi film industry is the most popular among them. Though India produces the largest number of films in the world (Approximately 1000 per year), it accounts for only 1% of the global film industry revenues. In spite of being over 90 years old, the Indian film industry was accorded the status of industry only in 2000. Over the years, the Indian film industry has been highly unorganized as film financing was dependent on private and individual financing at extremely high interest rates. Only recently, the industry has got access to organized finance. With vertical integration taking place between producers, distributors, exhibitors, broadcasters and music company’s corporatization is now taking shape in the Indian film industry. We believe, that corporatization, will bring about transparency, accountability and consolidation which will help to improve the overall profitability of the Indian film industry as well as reduce piracy and leakages which presently account for 14% of the Indian film industry's revenues. Ashwin B. Sonone * Asst Prof: TV Production Management Film & Television Institute of India (TV wing) Law College Road Pune – 411 004 Tel Nos: 020 25433060/25431817 Email : [email protected]

Rajendra N Pathak ** Asst Prof: TV Engineering Film & Television Institute of India (TV wing) Law College Road Pune – 411 004 Tel Nos : 020 25433016/25431817 Email :[email protected]