Financial Daily from THE HINDU group of publications
Monday, Feb 24, 2003
Columns - Showbiz
Showbiz gets really tough
An architect's blueprint of the Wave Multiplex coming up in Ghaziabad.
A new pack of multiplexes coming up in and around Delhi is redefining the concept of real estate development, and cutting-edge entertainment, and setting the trend for what many experts define as an unprecedented boom in the exhibition sector: conservative estimates put the number of new screens in the next couple of years around the country at an astonishing 1,000.
Something about the maths doesn't add up. The past five years has seen the dwindling fortunes of several landmark theatres in metros; every quarter there is news of theatres closing down. The same period has seen a sharp dip in revenues (over Rs 1,500 crore, according to trade experts), which accrue from the commercial products brought out by film centres in Mumbai, Chennai, Hyderabad, Bangalore, Thiruvananthapuram and Kolkata. There is also the sobering fact of not all multiplexes raking in the money: of the four PVR properties in New Delhi, two are struggling; the recently renovated four-screen Satyam in West Delhi, is forlornly waiting for customers. At the same time, big players in the fields of construction, real estate, and media are entering the exhibition sphere, and pumping in barrelfuls of cash into the creation of new screens. How has this apparently contradictory state of affairs come to pass?
I look for answers from the people behind two of the biggest projects, currently on the floor in North India. Both Ginni Chaddha, Director of the Wave cinemas (first one scheduled to open in May in Noida, followed by another in Ghaziabad, Lucknow, Moradabad, Bareilly, Agra, Amritsar, Mohali, Ludhiana), and Kajal Aijaz, CEO, Digital Talkies Multiplexes, a subsidiary of the DLF group (first one in Gurgaon on the verge of opening, three more in the works, with plans of acquiring more within the Capital) have no doubts about the efficacy of their upcoming chain. Both point to the drastic change in movie-going habits, a core theme which has driven their multi-crore projects: going to the movies has become part of an entertainment package, so only those theatres which deliver the full retail experience to the consumer, at affordable prices, will work in the future.
"In the end, it's all about having fun," says Aijaz, "our intention is to deliver the right ambience electric, buzing, youthful". It's also all about the right design (well-known designer Hafeez Contractor is on board), with a synergy between the graphs and signages at all their properties: to get the highest number of footfalls, which will translate into actual box office collection, aesthetics is as important as the presence of popular eating and shopping options.
Ginni Chaddha, who is leveraging his company's experience in film distribution in Delhi-UP-Punjab, into his theatre chain, says that the idea behind Wave cinemas is to open up raw territories, and provide them with a state-of-the-art viewing experience. "The only reason why single screen cinemas in the places I am targeting are not doing well is that people even in small towns no longer want to make do with torn seats, dirty bathrooms, candy bars which serve nothing, and bad projection," he says, "these towns have paying capacity, and they will pay for comfort levels." He cites the number of S class Mercedes in Ludhiana, the highest in the country, as a pointer to the town's prosperity.
The first Wave megaplex (five screens instead of the usual four) with 1,850 seats, promises `ergonomically designed rocker' seats, elevators, a night club adjacent to the cinema, and a slew of fast-food options.
Similarly, DT offers fully air-conditioned malls, piped music, national and international retail brands, parking for 1,000 cars, multi-cuisine food courts: clearly, if the mall-halls had their way, old-style movie-going, where you just went and watched a movie, is going to be a thing of the past.
That brings us to the thorny issue of pricing: except the hugely successful PVR theatres in two of South Delhi's neighbourhoods, which have set up enviable benchmarks for the rest of the multiplex community, most multiplexes are battling consumer reluctance to pay Rs 150 a ticket, and run up an average bill of a Rs 1,000-1,200 for a family outing, which includes tickets-popcorn-soda, the traditional movie spend. Will the growing numbers of screens lead to a rationalisation in price structures?
Says Aijaz, who is looking at a costing of Rs 2 crore for each of the DT screens, "There is a need to delink from the idea that multiplexes are an elitist form of entertainment. It is nothing but three or four cinemas under one roof, optimising the multi-screen space to exploit a single product better than a single screen." Of course, there will be parity in pricing, she says, market dynamics will make sure that "unnaturally high priced ticketing practices" will go.
Both DT and Wave cinemas are going with `flexi-pricing', a structure, which allows theatres to adopt a sliding rate across shows and days. "We are looking at an average ticket price of Rs 100 a day," says Saurabh Varma, Head of programming and marketing at Wave, "which means we can give our consumers a range of morning shows at Rs 30, Rs 50 for an afternoon show, and Rs 150 for weekends, just like it happens in Mumbai. The idea is to let middle-class and the lower middle-class segments have access to top-of-the-line entertainment, instead of just the upper classes."
Despite the influx of spanking new multiplexes, there are those who still believe in the single-screen experience. The newly-refurbished Vishal cinema in West Delhi, which claims to be one of the biggest in the country with 1,400 seats, decided to stay a single-screen, after a market survey revealed that in the West, the glut of multiplexes in the last decade led to an all-round slump in the exhibition sector. "The lack of product, and quality, is leading to huge losses, and to exhibitors paying distributors out of their own pockets," says Girish Johar, the theatre's head of marketing, sales and communication.
"The key to success is pricing, and for most of our viewers, Rs 100 or Rs 150, is too much." Owned by Eros, one of the country's largest construction groups, Vishal has hit upon a winning pricing formula of Rs 80 (balcony) and Rs 60 (rear stall). If it's worked for one, there's no reason why it can't for other single-screens, fighting to keep afloat.
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