Indian Multiplex Industry

Indian Multiplex Industry Entertainment Industry One of the fastest growing sectors of the economy is entertainmen t industry. Entertainment today dictates our lives, education, careers, earning money, all lead to the quest for higher and sophisticated entertainment. One seeks knowledge to improve the quality of life. The quality of life improves when the basic requirement of life are supplemented with entertainment in some form or other. Consider ing the current scenario, the entertainment industry is totally d ifferent from the past, as the modes of media used for providing services were d ifferent before the 20 century when compared with the present media. This can be th explained properly with the bifurcation below A Loo k at the Traditional live entertainment industry: Theater - Play writers, Actors and Theater directors Music Composers, Songwriters, Singers, Musicians and Orchestras. Publication Authors, Journalists, Publishers and Printers A Loo k at the 20 century mass media industry: th Film studios, Cinemas, Broadcasting, Record industry, Theme parks, Discothques et al. Indian Film Industry is a part and parcel of entertainment industry. It is most popular and affordable mass entertainment media in India. Almost 1000 movies are produced every year, so it is very critical to manage this industry, to manage its distribution, exhibition, etc.

THE INDIAN FILM INDUSTRY SCENARIO

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 analternative 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 the largest in the world in terms of the ticket sales and the number of films produced annually (877 feature films and 1177 short films were released in the year 2003 alone). Over 800 films are censored / released by IFI each year in over 15 languages.

Movie tickets in India are among the cheapest in the world India accounts for 73% of movie admissions in the Asia-Pacific region, and earnings are currently estimated at US$2.9 billion.

Fourteen million Indians go to the movies on a daily basis (about 1.4% of the population of 1 billion) and pay the equivalent to the average Indian's day's wages (US $1-3) to see a film. The Central Board of Film Certification of India cites on its website that every three months an audience as large as India's billion-strong population visits cinema halls.

The Indian film industry is highly regionalized with the largest language groups supporting major regional industries. The Telugu film industry produces the largest number of films every year in India, with about 245 films produced in 2006.

Regional Indian Film Industries

Bollywood: Hindi Film Industry Kollywood: Tamil Film Industry Bengali Film Industry Sandalwood: Kannada Film Industry Tollywood: Telugu Film Industry Marathi film industry Malayalam film industry

Indian Multiplex Industry Multiplex Multiplex is a medium that offers a person composite entertainment comprising of a one stop destination to shop, entertain, and dine and watch a Varity of movies under a common roof. Multiplex are one of the means of lifestyle that offer to viewers the choice of watching a movie in a five star or three star environment. The Multiplex model is based on concept of umbrella entertainment built around a primary anch or- movie. The revenue streams, however, do not necessarily centre on a single anchor. Typically, the possible income generating channels in a Multiplex can include. The box office collections Rent from d isplay system Food & beverage Product lunch rentals Promotions by companies to promote consumer goods. Presently there are approximately 13000 screens in India with equal number of space available for the same amount of theatres to be opened. The word multiplex has two meanings. Firstly it is a medium that often its consumers full entertainment including the pleasure of shopping, dining, enjoying and watching a wide range of movies under a common platform. Seco ndly it is a type of technology which is referred as Multiplexing with the help of this technology the same movie can be shown simultaneously in all the screens of the Multiplex with minor difference of 3 seconds between their screenings. 5

Indian Multiplex Industry Multiplexes in India are given benefits for their development as they form a major part of the entertainment industry. Benefits such as overall tax concession, reduction in entertainment tax and so on are pro vided by the govt. The Problems faced by the Multiplex Industry Indiscipline among filmmakers. This made the industry fragmented and disorgan ized. Piracy leading to massive losses for the industry. Lack of resources in terms of finance, human etc. Lack of corporatized management. Limited studio space and lack of security lending to an expensive foreign locales resulting in drain of resources. Reluctance of financial institutions to fund non asset based ventures Lack of expertise to handle latest equipments.

History Origins The lineage of multiplex movie theaters traces its roots back to the 1930s, although the concept truly did not begin to take root until the mid-1960s. In December 1947, Nat Taylor, the operator of the Elgin Theatre in Ottawa, Canada, opened a smaller second theater. It wasn't until 1957, however, that Taylor decided to run different movies

in each theater when he,became annoyed at having to replace films that were still making money with new releases. Taylor opened dual-screen theaters in1962 in Place Ville Marie in Montreal, Quebec, and at Yorkdale Plaza in Toronto, Ontario, in 1964. In 1937, James Edwards twinned his Alhambra Theater in the Los Angeles area by converting an adjacent storefront into a second "annex" screen. While both screens would show the same feature movie, one would also offer a double bill. In 1963, AMC Theatres opened the two-screen Parkway Twin in Kansas City, a concept which company president Stan Durwood later claimed to have come up with in 1962, realizing he could double the revenue of a single theater "by adding a second screen and still operate with the same size staff." Also, the shopping center structure where the Parkway was located could not support a large theater, so two small theaters were built to avoid that issue, and at first both theaters played the same film. AMC followed up on the Parkway Twin with a four-screen theatre in 1966 and a six-screen theatre in 1969.

Indian Multiplex Industry Services offered by a Typical Multiplex 4 Screens: A normal multiplex has 4 screens with 8-10 movies running as per schedules and thus giving the audience variety of choices to choose the desired movie. Ticketing options: The ticketing options in multiplexes are very systematic as compared to a normal single screen theatre. There are lots of options available for booking the tickets such as advance booking, home delivery, internet booking, tele-booking and current booking. Thus, one doesnt has to spend a lot of time in booking a ticket as there are various options available. Cafeteria: The multiplexes also have cafeteria in their vicinity which gives the consumers limited options to satisfy their hunger and thirst as quickly as possible during the screening of the movies. Entertainment: Entertainment facilities are available for the children with in the multiplex arena in the form of games arcade, fun house etc. Also, special events such as Valent ines Day, Friendship Day and many more are organized which entertain the teenagers. Malls: The invent of malls within the multiplex and vice versa has made shopping easier as everything can be done under a common roof, from enjoying to shopping, dinning etc. Restaurants: They also form a part and parcel of the multiplex and satisfy the consumers with wide range of food and beverages. Imax Adlabs has Sarson Da Saag, Spice of Italy and various other restaurants under its roof.

Indian Multiplex Industry Players of Indian Multiplex Industry 1. PVR CINEM AS Strong operational performance Aggressive expansion plans Foray into co-production Leading Multiplex operator Entertainment tax burden to decline 2. INOX LEISURE Consistent performer Impressive capacity ramp-up over the last 4 yrs: Top 25 cites - compelling growth stories E-Tax exemptions 3. BIG CINEMAS Integrated Play on the Media & Entertainment Sector Exh ibition Segment - The largest player Expansion through acquisit ions Future Plans Film Processing - Leader controlling 70% of market Film Production & Distribution 8

Indian Multiplex Industry 4. CINEMAX Cinemax India (Cinemax) is one of the smallest multiplex exhibitors 56 screens across 19 properties Majority of the screens concentrated in the Mumbai territory. Predominant presence in the Western region The largest exhibitor in the Mumbai territory with a 35% share of the multiplex screens in Mumbai. Cinemax is now focused on expanding its presence across the rest of India and is seeking to aggressively add capacity across other regions 5. FUN CINEMAS Fun Cinemas is a cinema chain in India based in Mumbai owned by the Essel Group and promoted by E-City Ventures. The company operates with the brand name Fun Cinemas (the premium brand) and Talkie Town (the value brand) for all theatrical presence and cinema activity and Fun Gaming, for all game-based leisure options. Currently, the company has around 140 cinema screens: 45 premium screens under the Fun Cinemas brand and 90 digital screens. The company plans to have 300 Fun Cinemas screens, 250 Talkie To wn screens and 1,000 digital screens by the year 2011.Fun Cinemas caters to the premium segment and promises facilities such as service-on-seats, online booking, and a loyalty program. 9

Indian Multiplex Industry Marketing Mix of Multiplexes Marketing Mix is the set of marketing tools that the organization uses to pursue its marketing objectives in target market. Marketing mix decisions must be made for influencing the trading channels as well as the final customers. Multiplexes forming a part of service industry have their own marketing mix, which are: The 7ps actually differ a bit from company to company. The analysis done is on the basis of general considerations 10

Indian Multiplex Industry Product Services offered are the elements that make up the total service package and include both tangible and intangible co mponents. A typical product package offered by a multiplex includes the follo wing: Ticketing options: The ticketing options in multiplexes are very systematic. There are lots of options available for booking the tickets such as advance booking, home delivery, internet booking, tele booking and current booking. Entertainment: Entertainment facilities are available for the children with in the multiplex arena in the form of games arcade, fun house etc. Also, special events such as Valentines Day, Friendship Day and many more are organized which entertain the teenagers. Air conditioner : Multiplexes are fully air conditioned which add to the luxury. Cross word: Now days multiplexes have book libraries and cross words for book lovers. Food Courts and Restaurants: Now days multip lexes provide you with a variety of food in their food courts and multiplexes also have restaurants so that one can have a dinning cu m movie experience. IMAX BIG CINEMAS has Sarson Da Saag, Spice of Italy and various other restaurants under its roof. Parking Facility: Multiplexes no w days have huge parking area with proper parking facilities for the cinema lovers. Luxury Recl iner seats: Multiplexes are now equipped with elegant and comfortable recliner seats for a luxury comfort taking the movie experience to a new level 11

Indian Multiplex Industry Below the table are different product levels existing in multiplex and the expectations made by the consumers. Product level Expectations made by the consumer Generic (the basic benefit) Viewing space in the multiplex, view the movie with the latest technology. Cleanliness in the multiplex, punctuality Expected (the expected benefit) in start timings of the show, comfortable seating arrangements. Apart from the good quality of viewing, Augmented (in add ition to the expected one expects great ambience, helpful benefit) employees, sophisticated interiors. Potential (beyond the usual, pleasant Incentives provided by the multiplex, surprise) reward system. 12

Indian Multiplex Industry Price The art of effective pricing is to establish a price level that is low to represent good level to the buyers but yet it should be high enough to allo w the service provider to make h is profit. Thus, the price level of market ing mix is considered to be most critical component both from the economic as well the social point of view. Indian multiplex fo llow 2 methods of pricing: Cost based pricing It is also referred as cost p lus pricing. It determines cost of service delivery as well as predetermined rate of profit in order to arrive at a price. It is necessary to analyze all cost accurately and differentiate between fixed and variable costs in order to use the costs as a basis for pricing decisions. Competition based pricing In this method the price is determined on the basis of competitors price. Now the major competitors are single screen movie theatres and other multiplexes. For eg. The rates for single screen theatres are Rs. 100 whereas the rates in multiplexes are Rs. 250. Thus, there is a very high variation in prices in the multiplexes when compared to the single screen theatres. To cope up with the prices of the single screen movie theatres, nowadays multiplexes have priced Rs. 60 for its early morning shows that are screened regularly. The prices of tickets in multiplexes are quite high because of the ambience, comfort and the services provided by the multiplexes. The price of multiplex tickets varies according to the show timings and movies. The ticket prices are quite less for the morning shows. Nowadays multiplexes have priced Rs 50 - Rs60 for its early morning shows that are screened regularly. 13

Indian Multiplex Industry The PVR rates begin at Rs.90 and go up to Rs.225 on weekends. Its new luxury multiplex has tickets priced at Rs.750, with fully reclining seats and personalized menu to boot. The Big Cinemas tickets usually vary from cities to cities and they are higher for good cities like Delhi and Mumbai. The Big Cinemas ticket pricing also depends upon the services offered and the amount of people who come here to watch the movie. Therefore the Big Cinemas ticket pricing is usually less during the weekdays but certainly mo suing the Sunday and the holidays. But though the Big Cinemas ticket price is high still people prefer it. The Big Cinemas ticket pricing also varies from place to place as the more developed places have greater facilities thus the prices are also high. Therefore you will come across some minor differences between the Big Cinemas ticket price. The Big Cinemas t ickets purchasing can be done through the online mode also. The online mod helps in saving a lot of time. The Big Cinemas ticket pricing is a combination of the price of the ticket and the tax added to it. Therefore one can see that the Big Cinemas tickets are more than the others just because of the comfort and the facilities that they offer. For the people price is not important but comfort is more important. 14

Indian Multiplex Industry Promotion One of the key and the most important elements to marketing mix is promotion which is used for the purpose of encouraging sales and also helps to convey the customer the position of the services offered by the multiplexes. Also promotion helps to create awareness among the customer. The tools used by multiplex industry for the marketing of services are advertisin g, sales promotion, direct marketing, news papers, postage and web. These tools are used to create favorable response from the target audience. The biggest advantage to the multiplex is that it has a very wider area of scope to carry out its promotional as well as day-to-day activities. Also, one of the important reasons is that it is located in the centre of the city which makes it easily accessible from all the sides. Due to large space, many companies and organizations market their own product and services within the multiplex as they are able to target their own set of target customers. Also, many of these organizatio ns give advertisements to be screened on the 4-screens. Out of the amount spent by the organizat ions for advertising 2% of it comes in the use for cinemas as a part of promotions, films, slides and signage. Every multiplex has its own set of objectives when it follows the promotional strategies. The most important strategies are: 1. Awareness: The multiplex takes full care that its objective of, making the multiplex familiar to one and all is accomplished. But now their main objective has been shifted to boost up sales with the help of many promot ional activities. 15

Indian Multiplex Industry 2. Brand Visibility: Branding should be done in such a way that the people have good recall value for it which helps to increase sales. The brand visibility is done by making the people aware about the logo of multiplex, its locat ion, accessibility and various such factors. 3. Induce Sales: Selling the services is one of the key issues of a multiplex. Their services include viewing of movies, cafeterias, entertainment arena and so on. The increase in sale is possible only due to the promotional activities. 4. Induce first time trial: This can be done for those individuals or those groups of people who are unaware about such concept of the multiplex and the benefits derived from it. Other Promotional Services 1. Loop Mobile Offer: Buy 1 movie ticket and get 1 Free for any movie, any show on Friday Loop Mobile has tied up wit h Cinemax multiplex chain and Sterling Cinema in a bid to captivate its subscribers with the magic of Movies every Friday. Loop Mob ile subscribers can now watch a new movie every Friday with Loop Mobile First Day, First Show. The association allows Loop Mobile subscribers to avail one free movie ticket on the purchase of one mo vie t icket. This is for any movie; an y show timing and every Friday. One can also purchase a combo pack of regular Popcorn & Coke at just Rs. 50. Through this tie-up with all 13 Cinemax theatres and Sterling Cinema in Mumbai, Loop Mobile subscribers located anywhere in the city will be at convenience. 16

Indian Multiplex Industry 2. Vodafone launches Vodafone Tuesdays (Buy one movie ticket and get one free on Tuesdays) Vodafone, one of Indias leading cellular service providers has introduced Vodafone Tuesdays wherein Vodafone customers can enjoy the exclusive scheme of getting two movie tickets for the price of one. The Vodafone Tuesdays offer is available at select movie theatres across Fame, Cinemax and single-screen theatres like Roxy, Premier, Premier Go ld, Sterling and Orama 4D. The coupons for a forthcoming Tuesday can be downloaded by any Vodafone subscriber on any day of the week. 17

Indian Multiplex Industry Physical Evidence In order to judge the quality of services, the customers rely on tangible cues. Physical evidence thus aims at enhancing the customers perception of the services offered. It also influences the employees performance at the time of service delivery process. Essential evidence and peripheral evidence are the two elements of physical facilities. Both these elements should be well coordinated in order to understand the potential impact and create the desired image of excellence in services. Essential evidence are dominant features like the building area of the multiplex, its parking area, signboards, etc. whereas the peripherals evidence are less dominant features such as the admission cards for its members (staff). Thus physical evidence of multiplex can be summarized into: Ambience factors Air Conditioning Excellent ventilation Clean floors, wash rooms and surrounding Design factors Uniform Appearance Extensive parking lot Spacious interiors Social Factors Well dressed employees Courteous Family atmosphere 18

Indian Multiplex Industry Place Place includes the surrounding, the actual location of the multiplex, accessib ility from various places, facilities available and other place related factors. The place decision of the multiplex depends on the locatio n and the distribution channel. The main problem for creation of channels for services is that they cannot be manufactured in one place and distributed all over. They can be offered from either single outlets or multiple outlets. FAME, CINEMAX and BIG CINEMAS are the best examples of an organization that has multiplex outlets situated at various places of the city and provides movie viewing services with latest technology. The Place factor plays a crucial role in case of multiplexes, this is because people are basically concerned with accessibility of the place, in case the place is out of the city then people wont prefer going there because of the time and cost involved in reaching the movie theatre. On the contrary if the Multiplex is located somewhere in the prime location or near railway stations then people can easily reach there and hence they prefer these multiplexes. Eg: Sion Cinemax Seco ndly, the place selected should be safe and clean viz. the locality and the crowd surround ing the place has to be decent and safe, this is a must because all the people come with their families and friends. Thirdly, there has to be abundant place for parking of vehicles, many people have their personal cars/b ikes hence parking space needs to be there in any cinema hall. Generally there is a pay and park system in the cinema halls but as a marketing strategy they can stop charging for parking so that more people prefer the place. 19

Indian Multiplex Industry People In case of multip lexes, for that matter any other service as well, the employees very often represent the company and are responsible for the image created in the mind of their customers. People i.e. the human resource is the most important factor of any company, be it service sector/ manufacturin g sector. The service provider must train and equip the frontline staff wit h the capabilities to perform the service, in order to deliver quality service to the customer. This causes the service firm to integrate appropriate human resource practices into its strategies. The working staff in a multiplex must be decent, soft spoken, cooperative and helpful; in case there is an emergency like health problems/fire problems then they should help the customers in whatever way possible. In case any female needs any kin d of help then there must be women attendants present in the premises. The security also needs to be strict and tight so that there is a sense of safety and security in the minds of the people. People have a direct link with the profits of the organization and thus the management strives hard in developing Customer Conscious Employees. It is the people, who play an important role in overall progress and development of the organization. The peoples way of dealing with its customers helps them to create a better image for the organization (multiplex) and this in turn help in creating good image in the minds of the people for the multiplex which in turn increases the profitability of the multiplex. 20

Indian Multiplex Industry Process The process of a service refers to ho w a service is provided and delivered to the customer. To design t he process of a service various f actors are involved such as Location facility Design and layout for effective workflow Procedures and job definitions for service providers Extent of customer involvement Measures to ensure service quality Equipment selection Adequate service capability. Every multiplex has a well defined and systematic process designed by their IT team. The process should be designed according to the ease of use and understanding of the staff that will be operating the system. For instance, in case of booking tickets, there are a lot of options which one has like advance booking, home delivery, internet booking, tele booking and current booking. So there must be proper record maintained of all these b ookings so that there is no confusion. If not done precisely then there can be incidents where two different persons can get the same seats for the same movie sho w which will create further issues. There has to be a systematic and elaborate process in all the departments like the Security Departmen t, Administration Department and the cleaning staff for proper coordination. 21

Indian Multiplex Industry Scope of Multiplex 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. Most of the multiplexes in India are anchor tenants in the large format malls making a favorite destination for the youngsters as well as the families. Multiplexes captured the market as complete family entertainment centers. The digital revolution has helped the Media and Entertainment industry to go digital. There are more than 100 digital cinemas in India today. They, along with the multiplexes have completely transformed the experience of the viewers. With an increase in the incomes of the people and increasing expenditure on the leisure activities, multiplexes are poised for high growth in India. Other than the sale of the movies tickets, Food & beverages is the major source of revenue for the multiplexes. Space economies and the optimal utilization of the capacities are the major advantages or benefits that the multiplexes enjoy over single screen theatres. India currently has 11500 existing screens, 95% are standalone, single screens. These single screen cinemas are poorly maintained as the owners find it difficult to upgrade and renovate their facilities, due to unavailab ility of organized finance. The deteriorating quality of these cinemas dissuaded viewers and they started using alternative viewing opt ions. 22

Indian Multiplex Industry Over the last few years, multiplexes have emerged as a trend in urban India. "Multiplexes" are essentially cinemas wit h 3 or more screens. They provide a quality viewing experience and are generally located around shopping malls to increase footfalls in these malls. Each screen in a mu ltiplex has small seating capacities in the range of 150-300 seats as compared to single screen cinemas which have capacities in the range of 800-1,200 seats. With around 11500 active screens, India is under screened. China, which produces far lesser films than India has 65,000 screens while the US has 36,000. Indias screen density stands low at 12 screens per million populations. There is a need of at least 20,000 screens as against the current 11500. This gives multiplex operators enough room to grow as the traditional single-screen theatres do not have the financial wherewithal nor do they enjoy tax incen tives. India's craze for films has not been fully exploited by the "Film Exhibit ion" 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. 23

Indian Multiplex Industry Risks and Concerns Slowdo wn in content supply As multiplexes are the consumers of content, they have no control over the supply quality and quantit y. Multiplexes thrive on rising footfalls which in turn depend on the better supply of films from producers. Hence, an y disrupt ion on the supply side will definitely have a negative impact on the multiplex players' growth. Alternative entertain ment avenues Movies compete for customer attention with other forms of entertainment viz. DVDs, TV, cricket, festivals etc. An increased acceptability of these avenues will divert footfalls away from multiplexes. Mall development delays Supply of quality real estate has been a problem in the past for multiplex players. Mall delays due to various reasons will hurt expansion plans of the companies. We are building in a 50% delay in mall handovers to the mult iplexes in our analysis. Any delay more than this will hurt future growth of multiplexes. Uncertainty over entertainment tax Entertainment tax in India is among the highest in the world leading to a much higher occupancy levels required for break even of multiplexes. Even though state go vernments have announced tax free windows for these players, uncertainty looms over the viability of multiplexes after the window expires. We believe that the levels entertainment tax will come down in the future, otherwise any increase will be passed on to the consumer to a large extent like it is done at present. Worsening economic environment The whole footfall growth story depends on rising prosperity in the country leading to higher discretionary consumer spends. If the economic environment starts worsening for a prolonged period, it will affect patronage levels negat ively pu lling down top line growths. 24

Indian Multiplex Industry SWOT Analysis Strengths: Entertainment is one of the most booming sectors in India due to its vast customer reach & a large customer base. Change in the lifestyle and spending patterns of the Indian masses on entertainment. Ind ian film industry is second largest in the world and the largest in terms of the films produced and t ickets sold. Weaknesses: The Entertainment sector in India is h ighly fragmented. The lack of efforts for media penetration in lower socio-economic classes, where the media penetration is low. Opportunities: The Indian film industry is the largest film industry in the world in terms of number of films produced and tickets sold each year expectin g growt h wi ll be continue in upco ming years in to producin g movies. The increasin g interest of the global investors in the sector. Opportunities for expansion in the rural areas (which is still untouched). THREATS: Piracy, violat ion of intellectual property rights and High Real Estate price is a huge barrier to profitab ility of this sector. Lack of quality content and increasin g competition from other entertainment sources like IPL has emerged as a major concern. 25

Indian Multiplex Industry Why is there a Multiplex Boom? In India there are about 20,000 theatres and there is a plenty of space and resources for an equivalent number of theatres to be started all over. Thus, there is a high growth rate for the multip lexes in the entertainment industry. Due to the high growth rate of the multiplex industry; various benefits are provided by the government such as overall tax concessions, reduction in entertainment tax and so on in order to motivate the industry person. Some of the other factors involved are given below: Aspirations: There is a huge group of people who are very ambitious and have a status symbol (premium or the top class) or desire to possess it. Thus, these groups of people prefer to have an edge over others (middle and lower class) by viewing movies in a multiplex rather than a single screen theatre as it is a matter of pride and honor for them. Attitudinal Change: Gone are the days when one used to think about saving the money by not going to the theatre along with the family to watch a movie and instead go out for a picnic to enjoy the whole day. Gradually, this concept has changed now because if a person plans to spend his whole day for enjoyment along with his family, then multiplexes are the best option as they have everythin g from shopping stores to restaurants, cafeteria, games corner and so on. Combination of various facilities: The concept of satisfying the consumer under one common roof is gro wing rapidly allover the world. Thus there are two types of combinations found; 26

Indian Multiplex Industry One is a Mall with a Multiplex . E.g. R Mall has a multiplex R Adlabs wit hin itself. Recently, Fame Adlabs too opened its new multiplex in Malad wit hin the mall named Inorbit. Seco nd is a Multiplex with shopping Facilities and vario us Amenities within its roof. E.g. Imax Adlabs is a multiplex having within its games arena, cafeteria and other such amenit ies. Also, a person can shop during the promotional activities carried out by various companies within the multiplex and take advantage of various benefits and offers provided by them. The relationship between the multiplexes and the malls is referred as the Synergy Effect. It thus helps in satisfying the consumer with the required amount of amen ities and facilities needed by bringing all the required resources under one common roof. This helps the consumer to enjoy his whole day at one common place instead of planning to go to var ious places in order to shop, dine and have fun with his family members. Provides employment facilities even for those who are not involved directly: This is one of the interesting cases found in the mult iplexes. There are many departments involved in the smooth functioning of the multiplex such as Human Resource, Marketing, Food & Beverages, Administration and so on. All these departments are employed directly as per the requirements. Now, there is also a lot of emplo yment scope for those people who are not involved directly in the multiplex industry. Many of the multiplexes that have huge space such as Imax Adlabs organize many events such as childrens day, teachers day, ch ild festival and so on. Thus, to organize such events many peo ple from outside are involved such as decorators, musicians, caterers who indirectly gets employed. 27

Indian Multiplex Industry More number of screens: This is one of the most important reasons for the multiplex boo m. These are more screens, roughly 3-5 , when compared to the normal movie theater (Single Screen). As there are many screens in the multiplex, people get a huge variety and range of movies to view. Also, the movie timings are flexible and thus a customer can view any movie of their choice as per their availability and convenience. Due to this the turnover of audiences as compared to the single screen theatres are relatively very high. Risk minimization: Also, the benefit that the multiplex has over the single screen movie theatre is the risk min imization factor. The mu ltiplex has various partners, various company collaborations, and thus they work together to achieve the goals set up by the organ ization. Also, the risk is minimized when the space is let out to various corporate organizations such as Reliance, Vodafone, HDFC, Citibank and so on for product launches and various promotional launches. 28

Indian Multiplex Industry

Why are Multiplexes preferred over the single screens? On the basis of our analysis, 94% of the people think that Multiplexes are better options than Single Screen (Cineplex) whereas; only 6% negate the fact. The reason behind this can simply be answered by pointing out the difference between single screen and multiplexes.

Multiplexes The multiplexes enjoys rebates and exemptions from the government.(Entertainment Tax)

Single Screens Single Screen doesnt enjoy such exemptions on part of government

They just dont offer movie but also offer Cineplex on the other hand offer only so called add-on facilities movies and no extra facilities. They offer customer with choice in different movies Single screens dont offer such facilities with no options to the customers

Talking of the ambience, multiplex offer Single screens on the other hand dont better sitting , Dolby digital sounds and offer such facilities to viewers. good graphics for viewers Multiplexes, by offering food courts, ATM Facility, shopping facilities can offer Add value to money to customers. Single Screen on the other hand doesnt offer add value to money to the customers income.

The mushrooming of multiplexes has thrown up huge competition amongst multiplexes and is giving the stand-alone theatres a run for their money. However, multiplex owners are still upbeat about their business. But the road ahead for theatre owners is both exciting and challenging. The service industry is ever changing and you have to change proactively.

Indian Multiplex Industry Segmentation and Target Group Segmentation helps marketer to identif y Target market clearly and on the basis of that marketer plans strategies and attract the audience. Its done on the basis of Demographic, Psychographic and behavioural differences of the consumers. According to the research Multiplex owner has conducted, the come up with three categories signifies different groups of people and their behaviour which

plays a very important role in making decisions. They are 1. Groucho ( Age grp. 25 44 yr.) This group consist of 32% of Mumbai audience (Premium Group) They visit the cinema halls occasionally (Once in 3 month) Prefer to watch Hind i Thriller movies and also Regional movies. Come late to movies at least by 15 minutes and Prefer to watch with family. 2. Westerner ( Age group is 35 55 yr) This group consist of 5% of Mumbaikars residing in western part of the city. Visit cinema hall regularly (Once per week) Prefer to watch English movies as action, animation. Come 10 minute late to movie hall and prefer to watch movie with family and children. 3. Geeks ( Age group is of 1 5 24 yrs) This group consist of 27 % of the population from other part of the city. Visit cinema hall frequently (Once in a month) Prefer to watch hindi action, war Dubbed English movies either alone or with friends Enters 5 minutes late in the movie hall. 30

Indian Multiplex Industry Marketing Media Channels for Communication Print Print medias such as Newspaper, magazines, journals, pamphlets, poster etc.at he time of release of movie, these medias are used to advertise intensively. Eg. Bombay Times, Mid-day. Radio Second most used medium. Multiplexes attract customers by various contests on Radio. Leading Radio stations Radio Mirchi, Radio City etc Web Personal website for multiplex is used by firm to market the movie. Promotional activities and the new happenings along with new releases information been provide on website. Bookings also been done on website. SMS The database of numbers is collected from the customers who watch movies. And then promotional activities, new release movies, reminder to bookers is been done via sms. Hoardings This is used to recall customers about the movies being screened at multiplex. Hoardings are placed both at populated place and in multiplex. Tie-ups Multiplex has tie-ups only when it has promotional activities to be conducted within its premises. It works with the company that is promoting and markets both the companys product as well as officials of multiplex. Public relation Writing and giving any promotion and it take care of any misu nderstanding between consumer and multiplex. In-house Branding: This promotional activities been taken in the premises of multiplex. Different sections like, entertainment area, cafe area and dome area and so on. Every section tries their best to retain the viewer. 31

Indian Multiplex Industry Marketing Strategies Movie Marketing : this is one of the most important areas which is marketed & helps in creating a brand image for the company. The main focus is to market the movies that are big screened along with creating & making aware the people about the multiplex. Also during such premiers press & various media channels are invited to cover the whole premier event which has a positive effect on the multiplex. As stars are called for the premiers of special movies along with outside peop le, this act as s synergy effect and thus more & more number of people become aware about the multiplex and its day to day activities. All abo ve this with the help of various media channels, huge & extensive advertising is done for the movies which add to the recall value on the minds of the people. Caf Marketing : This is an altogether new concept started and undertaken by multiplexes for marketing its movies. It basically helps in promoting its mo vies wit h the help of eatables sold in the cafeteria within the premises of the multiplex. Here the eatab les are named after the movies & various film stars during the release of much hyped & successful movies. E.g. Fame Adlabs during the release of the movie Choker Bali arranged special Bengali dishes relating with the theme of the movie. The concept

became a huge success and now a separate section is being for the Bengali dishes. The caf situated within the given arena in multiplex. Special Events Marketing: the positive point that multiples gains o ver others is that along with the screening of various movies it also screens special event such as F1, cricket matches, various documentaries and social messages that are to be passed n community. Multiplex also organize celebration of religious festivals as 32

Indian Multiplex Industry well as special days such as valentine day, friendship day, Independence Day & republic day & events such child fest. Also, it arranges for many events & birthday parties as per the customers demands. Such activities give unique experience to its customers who feel the same home & personalized atmosphere present there. Tie up With Various Corporate: Multiplex has tie-up with many corporate associates as they help each other in their day to day activities. Both of these go hand in hand. Their relationship is of give & take type; it is like the corporates organize or the host the events that are conducted in the mu ltiplex & in turn the multiplex gives it sales indirectly. E.g. Womens Day Celebration on 8 March in IMAX by Citibank. It was th a huge success for both made their customers satisfied & also lot more loyal customers for them. Movie Shootings & Advertisements : Multiplex also allows shootings for movies & advertisements as it helps to publicize & create a brand name for itself. Movie shootings, advertisements take place here because of the ambient factors & also space the surroundin g. Also it acts as a business activity as t he movie makers are not given the premises free of cost. Special Screening of Ho llywood Movies : A new concept started by many multiplex is the screening of Hollywood movies at their theatres. These special

screenings are referred as Midnight Mat inees. Midnight Matinees is another innovative attempt on the part of multiplex to comb ine various elements of leisure & partying with cinema viewing.

Indian Multiplex Industry Are the single screen theatres in India going to die soon? With the boom in the multiplexes and the trend of multiplexes wh ich can be seen in India, a question has been raised that, are single screens going to d ie soon. The perfect answer to this will be a big NO. Our analysis shows that more than 70% of people prefer go ing to multiplexes as compared to Single Screen, but The bigger the mob the greater the thrill is an old saying. In a country like India where people still say that a movie should have to a PAISA VASOOL, it shows that the expenditure on movie or price of movie tickets has always been a question. Multiplexes offering tickets at around Rs 150 cannot call for large chunk of audience on account of high prices. On the other hand, if a common middle class family-- comprisin g a man, his wife and two thinks of venturing out into a

multiplex on a Saturday evening, the idea doesnt seem too pleasing, if you count the costs! The Indian film industry is the worlds largest, churning out more than 1,000 films each year. There are an estimated 11500 cinemas in India. Of those, nearly 600 are mu ltiplexes and around 10900 single screens. No doubt the road ahead for single screens is very challenging and exciting. Single theatres would do well in smaller towns where multiplexes dont go. They can price themselves on par or maybe slightly above the nu merous video parlors that are thriving in the rural areas. They themselves have to loo k and explore their potential to serve better in the rural or their ex pected market. 34

Indian Multiplex Industry Strike Issue of Multiplexes What was This Multiplex Strike All About With the emergence of phenomenon like liberalization and globalization, society and culture of every country has taken a leap. We can see transmission of ideas, trends, culture and behavior across the global. One of the trends that have caught the momentum in the past decade is the ERA OF MULTIPLEX . The reasons for the same can be attributed the fact that over the past couple of years, the dynamics of movie making has changed dramat ically. Not only has the craft of story telling changed, the audiences have as well. Case in point a film like Chak De or even Dev D. Till a coup le of years back you wouldn't have imagined these films gaining acceptance, forget becoming hits. This has largely been possible due to a growing section of aud iences collectively and colloquially defined as the "multiplex audiences". These are the upwardly mobile section of the audience which don't mind paying for a story well told, no matter how uncon ventional it is. This in turn has given rise to the multiplexes swish, clean, popcorn-smelling environments which woo you with combo meals and a great film. Producers were quick to spot this trend and starting creating cinema which was largely aimed at the "multiplex audience". What they didn't realise was that in the bargain they were creating a goliath that would in turn start dictating terms to them and that's where the seeds of this conflict were sown. Multiplexes and distributors / producers starting conflicting 35

Indian Multiplex Industry on revenue share. Wit h each movie would start a new bout of conflict over who gets how much , with each party expecting more, Multiplexes wanted a larger share in the pie as according to them, they get the audiences to see the movies. However, distributors / producers would argue that content generation is more critical hence they should get an equal share if not more. A couple of other issues like the multiplexes inability to clear huge amount of out standings towards the distributors, not sharing the benefit of certain incentives given t o them b y the government with the distributor, led to the eventual deadlock. Bollywood producers incurred losses running into hundred of crores due to the strike over revenue-sharing between producers, distributors and multiplex owners. This ended when the multiplexes have agreed on sharing revenue of all movie ticket sales for the : For First Week 50-50 basis For Second Week 47-53 basis For Third Week 40-60 basis For Following Week 38-62 basis On account of negotiations between the actors and the producers they have come up to this percentage distribution as per film. This is classic example of how any business or industry gets affected by the important development in it. The strike has also affected auxiliary industries like hoardings, public relations and advertising, as their work has come to a complete halt. 36

Indian Multiplex Industry Apparently, this industry has suffered an estimated Rs 100 crore loss. This shows how the multiple dynamics act as very important factor in determining the industry growth and develop ment. MULTIPLEX BUZZ!! The nation's multip lex industry is all set for an unprecedented boom buoyed by posit ive regulatory changes and booming consumerism. Multip lexes /megaplexes have been instrumental in contributing 28 percent of the total theatrical sales for the film industry accordin g to a report by Systematix Institutional Research. Industry experts estimate that top six multiplex chains have p lans of 300-500 screens each by FY-10. DLF, a leading real estate player in the country, plans to invest US$ 298.12 million for the expansion of its multiplex business. The company has planned to add at least 500 screens in the next four to five years across the country. Entertainment conglomerate Adlabs Cinemas has drawn up a plan to build 12 megaplexes in India where you can not only see movies but also cricket and soccer matches on screen. Multiplex chain PVR Cinemas, which currently has 92 screens, is also planning to add over 150 screens across India, staggered over a period of three years from 2008-2010, with a total investment outlay of around US$ 71.55 million. Cinemax India, the multiplex chain which currently has 55 screens over 17 properties across the country is planning to scale up its presence to 299 screens across about 100 properties by fiscal 2010 37

Indian Multiplex Industry References and Sources www.magportal.com/c/ent/movie www.dreamznetsolutions.com/articles/ media-option-website-designing.html www.legalserviceindia.com/articles/fban.htm www.ankurb.info/2007/03/16/300-movie-review/ www.exchange4media.com/e4m/izone1/izone_fullstory.asp?section_id=4&news _id=17336&tag=12066 www.techtribe.com/viewBlogEntry.html?blogEntryId=8413080e-5d38-102ba627-000f1f68a9bf http://economictimes.indiatimes.com/features/brand-equit y/Why-Indian-youthprefer-multiplexes/articleshow/6192272.cms http://www.naachgaana.com/ 2010/06/26/multiplex-and-single-screen-business/ http://mybigmedia.wordpress.com/2008/09/12/emergence-of-multiplex-in-india/ http://www.newsofap.com/newsofap-4988-25-inox-beco mes-second-largestmultiplex-chain-in-india-newsofap.html http://www.realty-firms.com/multiplex.html http://www.vnrao.net/business/9331-multiplex-and-single-screen-cinemas-inindia-2010.html http://www.dancewithshadows.com/business/cinepolis-multiplexes-in-indiasoon-40-new-screens-in-12-months/ http://www.indian muslims.info/news/2007/ nov/25/multiplexes_fast_gobbling_in dias_single_hall_theatres.html

Example Fame India Ltd.

Background In the late 1990s, we saw an opportunity in providing an outstanding movie viewing experience to the Indian audience. Combined with the availability of high quality retail space in India, the avid movie going habits of Indians and the paucity of good quality theaters in the country, we felt this was a viable opportunity for a successful business. We, therefore, reoriented our business model to increase our focus on the nascent Film Exhibition business, by leveraging on our strong Film Distribution experience. We benchmark ourselves with global multiplexes, and strive to enhance our service offering in line with the emerging trends globally. To provide exceptional consumer experience, we have introduced the Gold Class screens which feature natural leather recliners, where each recliner stretches to 150 degrees, super size screens, state of the art projection and sound systems. Apart from popcorn and soda, we also offer specialty food, which can be ordered and delivered on ones seat!. Evolution: We were incorporated in 1999 and commenced operations in the same year. We were formed with the core objective of providing cinema goers a unique movie viewing experience. In 2001 in order to encourage investment in the sector, the Maharashtra government announced significant tax benefits for multiplex operators, which made investments in this sector more attractive. Sensing this opportunity, we decided to invest further capital into the Multiplex business. We raised fresh equity capital from GW Capital (one of the leading venture capital funds, and now know as India Value Fund) and commenced operations. Currently, FAME operates 102 Screens and 28,518 seats across 13 cities in India in sates of Maharashtra, Gujarat, Haryana, West Bengal, Jharkhand, Karnataka and Tamilnadu. No of screens No of seats Properties under Fame India Limited Mumbai Pune Nashik Aurangabad Kolkata Anand 32 6 3 3 10 3 8951 2024 1318 1012 2405 624

Bengaluru Dhanbad Bharuch Panchkula Baroda Chennai Properties under Joint Venture Mumbai

10 4 3 3 4 5

2386 996 890 652 1116 1327

1282

Properties under management model Kolkata Surat Baroda Total 2 6 3 102 701 1840 994 28,518

STRENGTHS Market Reputation: The FAME brand has been identified with professionalism and transparency in business practices. This is the core strength on which all our businesses are built. Ability To Identify Locations: One of the biggest factors for the success of any multiplex is the location. We believe that our skill in identifying locations is one of our key strengths. We have a professional team with many years of experience in evaluating various locations in terms of catchment area, competing alternatives, expenditure patterns and demographic trends. Proven Project Management Skills: We have an in-house professional team for project implementation supported by project management consultants. This model of implementing projects has enabled us to complete properties within budgets and time. Capital-Efficient Project Design And Execution: Our projects are planned and conceived in a manner that each property is profitable on a standalone basis. We use our internal skills to assess the location and demographics and decide on capital expenditure accordingly. The properties on which we operate are not owned by us. We manage these properties pursuant to agreements entered into with the respective owners of the properties. Apart from stand-alone profitability of each site, it also ensures an efficient use of capital. Selection of content: Due to our experience in content selection and programming for many theaters and a deep understanding of different film genres (developed in our distribution business), we are well-placed to exploit each film available in the market. Marketing strength: The brand Fame has been established in the consumers mind due to marketing through newspaper ads, radio spots, direct mailers, internet mailers, Purple Ribbon (our social initiative) and the use of promotions like paid previews, contests, movies merchandise, DJ in the lobby over the weekend etc. Premieres of films are also used as an important marketing tool. Customer Orientation:

Fame has built a clear focus on customer orientation, by providing services such as, tele-bookings, home delivery of tickets, internet bookings, IVR and kiosk bookings. Long-standing experience in Film Distribution: Apart from the experience in areas of exhibition i.e. programming, theater management and running multiplexes, we have experience of over 25 years in film distribution. This distribution experience is particularly useful for the exhibition business in the following way: Ability to identify under serviced areas and/or untapped locations, where unmet demand for a movie theater exists. This helps us in selecting locations. Relationship with producers/distributors in getting access to content. Relationship with theater-owners enables us to have access to locations for retrofits properties. Understanding of different film genres and their box-office potential. This is important for content selection. Integrated Technology Backbone: We have laid a lot of emphasis on a technology and systems. We use different softwares, which provide us a regularly updated MIS. This assists us in our day to day operations. Vista Vista is ERP software made by a developer in New Zealand and used internationally; which covers all aspects of managing and operating cinemas. The product line is scalable so as to be suitable to exhibitors who run from one cinema to hundreds of cinemas. Apart from Box Office and F & B sales, the Vista suite is used for web ticketing, kiosks, employee scheduling etc. Boss The Back Office Software System (BOSS) is a specialized Accounting System for the hospitality Industry / Service Oriented Companies. This software is integrated completely with Vista, thus enabling accounting to remain online on a daily basis. This helps in closure of books every month and preparation of MIS reports within 5 days of the month end. GROWTH STRATEGY Our growth strategy is to increase number of patrons is through a pull innovative programming and push block booking and build a pan India presence is a cost effective manner, and furthering Fame as an experiential multiplex brand through a mix of multiplexes, retrofits and some standalone propertie