Multiplex operators such as PVR Cinemas, Inox Movies and Reliance Big Cinema are opening more and more screens in Tier 2 and 3 towns such as Latur, Rajkot, Siliguri, Darjeeling and Raipur.

Rising disposable income in these towns, cheaper real estate involving lower capital costs and the dearth of entertainment options is making these towns attractive for the multiplex owners.

A recent study by BP Equities Research indicates that despite having one of the largest film industries in the world, India is one of the most under-screened markets globally. “On an average there are less than 13 to 14 screens per million in the country as against 117 screens per million in the US,” the study said.

Metros saturated

Also, the metros are reaching saturation point in terms of number of multiplexes and screens, while the smaller towns are crying for more halls. According to Mr Anil Arjun, Chief Executive Officer, Reliance MediaWorks, there is a huge gap between the need and availability of screens in these towns. The average screen density per million in Tier 2 towns is 20 and in Tier 3 towns is as low as 10 screens, he said.

Cheaper halls

The cost of real estate in a smaller town is almost one-fourth of that in a metro or large city, says Mr Pramod Arora, group president and chief executive officer, PVR Ltd.

The investment per screen and hence the capital cost is also relatively lower. It is 25 per cent to 30 per cent cheaper to set up a multiplex in small towns, Mr Arora said.

“The ability to reach out to these cities also opens up another revenue source for the producers and distributors and once we are able to achieve the economies of scale then this revenue could be shared as well,” he said.

Many States are also encouraging the multiplex owners to invest in small towns by exempting them from levy of entertainment tax on tickets, he said.

Digital delivery

Digitisation of content has made it easier for multiplex operators to release more prints and reach far-flung markets.

The share of physical prints – which was almost 85 -90 per cent till some years ago – has now come down to 50 per cent while that of digital print has increased to more than 50 per cent.

The cost of digital print is almost one-fifth of the physical analog print. This helps producers and exhibitors to increase the number of prints at comparatively lower costs.

A movie can, therefore, be released simultaneously in metros and smaller cities and towns thus reducing potential losses caused due to delay in movie releases.

shobha@thehindu.co.in

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