SPI Cinemas’ Palazzo at the Forum Vijaya Mall
In the last month, 15 new screens have come up in Chennai, including the opening of SPI Cinemas’ Palazzo at the Forum Vijaya Mall in Vadapalani and PVR at The Grand Mall in Velachery. Very soon, AGS Cinemas will open its new four-screen standalone multiplex at G. N. Chetty Road in T. Nagar. Additionally, PVR will commission its Tirusulam property at a mall near the Chennai airport next year. Mexico-based Cinepolis, the third-biggest multiplex operator in the world, will also open shop in a mall on OMR by the end of 2016.
It is the biggest boom in the theatre business in Chennai since the 1970s, when complexes like Devi, Sathyam, Ega and Abirami came up. 90 per cent of the multiplexes in Tamil Nadu are in Chennai and its suburbs. Out of the 1,152 screens in Tamil Nadu, there are just 163 new-generation multiplex screens. Among the metros in the country, Chennai has the lowest number of multiplex screens. Archana Kalpathi, chief executive officer of AGS Cinemas, says, “Both our multiplexes at Villivakkam and OMR are doing well. We look forward to opening our new multiplex at G. N. Chetty Road which will have state-of-the-art 4K projection, with multi-level car parking.” A number of Chennai single-screen theatres, too, are converting to multi-screen units.
Gautam Dutta, chief executive officer, PVR Cinemas, says, “Chennai is one of our best markets. It has the highest per-screen occupancy in the world, between 80 to 85 per cent, while in the U.S. it is barely 25; Delhi and Mumbai’s hovers between 40 to 50 per cent. People in Chennai love films, and consume films across six different languages. Our newly-opened PVR at The Grand Mall in Velachery has had a flying start. Sometime next year, our property near Chennai airport too will be opened. We have signed up for as many as eight new multiplexes in and around Chennai. In a way, the low ticket rates have worked to get high occupancies.”
The growth of malls has often been linked to the rise of multiplexes. The association between multiplexes and malls is symbiotic in nature, as both feed off each other’s footfalls. If anything, it is the mall owners who are wooing the multiplex players in Chennai. Not only do the malls offer multiplexes the best locations, as anchor tenants, multiplexes too contribute heavily in generating footfalls for the mall. After Palazzo and PVR opened, the retailers in the respective malls have reported a 30-to-40-per cent increase in business. A prominent one-time prestigious mall in the heart of Chennai city which does not have a multiplex, now resembles a ghost town, as top retailers have shut shop.
However, a spokesperson of the multiplex operators association of India says, “A developed market like the United States has almost 40,000 multiplex screens. In a developing market like China, there are 25,000 screens. But India has only 2,150 multiplex screens.” One of the biggest grievances of the multiplex association is that in Tamil Nadu, there is a cap on ticket pricing, high entertainment tax and restriction on the number of shows. Plus, there is no multiplex policy or tax benefit that is being provided, like in other states. Today, Karnataka and Kerala are experiencing a multiplex boom due to flexibility in ticket pricing.”
The Chennai multiplexes are not assured of profits from ticket sales alone. Margins are constantly under pressure, as they have to share revenue with distributors and mall owners, and deal with high costs and taxes. They can get a maximum of only Rs. 42 lakh to Rs.48 per ticket sold at Rs. 120, after entertainment tax (30 per cent) and distributor share (depending on playing conditions).
How can Chennai multiplexes then make their money? In fact, they make more money out of non-ticketing activities, like food and beverage sales, and in-screen branding. A combo (cola+popcorn+puff) deal in a Chennai multiplex costs nearly double that of the ticket.
The multiplex industry is currently ‘sunrise sector’. But at the end of the day, be it a standalone cinema or a multiplex, theatres need hits to sustain. In short, you can have all the theatres you want, but only a good film will attract the audiences.
No comments:
Post a Comment