Business Daily from THE HINDU group of publications
Wednesday, Apr 29, 2009
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Business Daily from THE HINDU group of publications Wednesday, Apr 29, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Marketing
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Outlook Industry & Economy - Cinema Multiplexes brace for 35-50% dip in business
Varada Bhat Mumbai, April 28 Multiplex chains are expecting a slump of 35-50 per cent in business due to the ongoing producer-exhibitor standoff. Most of them plan to operate fewer screens in each property, reduce advertising and marketing expenses and put fresh recruitments on hold. According to sources, a handful of multiplexes are already operating fewer screens in each property to keep cost of operations low. Many are showing re-runs of blockbusters such as Ghajini, Tare Zameen Par, Rock On and Dev D. Some are showing back-to-back shows of regional films such as Mee Shivaji Raje Bhosle Boltoy and Sundar Majhe Ghar, said a source. Mr Devang Sampat, Senior Vice-President, Cinemax, declined to comment on the issue. The biggest overheads for operators are rentals, electricity, staff salaries and marketing. Around 25 per cent of revenues come from food and beverage sales while the balance is from ticket sales. The investment for a seat is Rs 70,000 to Rs 1 lakh, depending on the location, and breakeven usually takes 5-7 years. Mr Abhishek Raina, Head of Marketing, Fame Cinemas, said, “Overall, we are looking at a 30-40 per cent reduction in advertising and marketing spends this year. The way forward is to explore various co-branding opportunities.” The issue with the producers is only one side of the story. The fortune of the multiplexes have also been affected by the Indian Premier League season (which has had people glued to TV screens), weak consumer spends and poor content. Mr Vikas Mohan, film trade analyst, said content is the main reason for keeping people away. “Despite the slowdown and the aftermath of the terror attacks, Ghajini managed to gross above Rs 100 crore locally,” he said. “The audience has become selective about watching films at multiplexes. Cost is a big issue in these times because a four-member family typically coughs up over Rs 1,000,” said Mr Mukesh Bhatt, who runs Vishesh Films. According to an Angel Broking report on multiplexes, the top grossers in 2008 collectively earned Rs 435 crore compared with Rs 692 crore in 2007, almost a 40 per cent dip. “Occupancies in most multiplexes have declined to as low as 25-30 per cent level in FY2009,” said the report. Even the first month of this fiscal has hardly been any cause for cheer to operators. Thanks to the IPL, the fate of April and May releases such as Pal Pal Dil Ke Paas, Aashayen, 99, Detective Nani and Kambakht Ishq is still uncertain. More Stories on : Outlook | Cinema | Entertainment & Leisure
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