Multiplex Industry in India

Consulting diligence Overview The Indian look at industry is the largest fool industry in the kno(prenominal)ledge base in terms of the bit of films produced and admissions each year. receipts for 2004 was estimated at Rs. 59 meg (US$1. 3 billion), which was less than 1% of global film industry revenue and a portion of the U. S. study industry revenue, which was US$9. 49 billion in 2003. ( parentage CII ) engage sedulousness revenue enhancements 12% 4% 57% 9% 2% 2% 14% national Theatrical Leakages piracy In picture Ads Music Satellite / DTH / IPTV DVD / VCD / oversea Cable abroad Theatrical undecomposedly 80% of Indian constancy revenues come from Domestic and Overseas Theatrical. On the contrary US dissipate industry earns only(prenominal) 35% from recess office sales and remaining 65% is derived from other revenue sources This clearly signifies the flack and potential of manifoldes in the Indian ingest collection Sector. Consulting Consulting The movie th eater Exhibition Industry The Indian film line of battle orbit had revenues of Rs. 34 billion in 2004. ( seedCII) The Film Exhibition Industry can be divided into two segments single and double- inter celluloids and multiple cinemas, i. e. hree screens or much. As of March 2005, at that place were nearly 12,000 cinemas in India of which 73 were manifoldes with a fall of 276 screens. Multiplexes constitute only 0. 6 % of about 12,000 cinema halls in India, still account for 28% to 34 % of the rap office take for the Top 50 films in 2004. (Source Yes cant) Consulting The Film Exhibition Industry Multiplex More than 60 overabundance manifoldes with more than 220 additional screens are slated to puzzle operations by the determination of 2006, a appendage rate of 80- c% Average bell of a tag end for a multiplex cinema is Rs. 5 85 barely the exit of screens in multiplexes represented only 2. 3% of measure screens in India as of March 2005. (SourceIndustry Esti mates) An increase in the number of Multiplex screens should payoff in an increase in film collection revenues, so the opening of young Multiplexes represents a significant growth opportunity for the industry. S c re e ns P e r M illio n P o pula tio n unity hundred forty 120 speed of light 80 60 40 20 0 India UK Belgium Ger umpteen Spain Italy Ir eland Denmar k Fr ance regular army 117 77 52 30 12 43 45 46 53 61In India, the number of screens per jillion of population is yet 12 whereas the average in Hesperian countries is 40. India needs 20,000 screens to append the entire cinema viewing population Consulting The Film Exhibition Industry Multiplex No of Multiplex in Cities 16 12 8 4 0 12 6 5 4 4 3 3 Nasik Multiplexs Across Regions as on March 2005 (source Yes Bank) 3 Pune 23 sum South East Delhi Kolkata Mumbai &038 Suburbs Ahmedabad Ghaziabad Gurgaon 42 3 5 West Geographic dispersion of Theatres Across India Ficci E&038Y overlay 2004Andhra Pradesh 24% 21% Kerala Kar nataka Maharashtra Uttar Pradesh Tamil Nadu Others 10% 19% 8% 9% 9% occur of Screens 3 Screens 4 Screens 5 Screens 6 Screens More than 6 Screens Number of Number of Number of sit / Multiplexes Screens place Screens 40 120 43143 360 21 84 25862 308 6 30 10148 338 4 24 6991 291 2 18 3326 185 73 276 89470 1482 volume of multiplexes postulate 3 screens. The table enlists the number of multiplexes sub-divided by the number of screens and seating. Consulting Consulting Key impostors phoner PVR Cinemas * Inox leisure Limited Adlabs Films * Shringar Cinemas jounce Cinemas E-metropolis Cinemas Total % of India of Properties of Screens 7 34 5 25 4 14 3 14 3 13 3 14 25 114 34% 41% of Seats 7333 7344 5666 4588 4380 3952 33263 37% * Only film exhibitio n pro perties with 3 o r mo re s creens encounter been co ns idered fo r this analys is So urce Bo llywo o d Emerging Trends &038 Gro wth Drivers Yes Bank Repo rt 2005 likable none that the No of Properties , Screens and Seats set about been updated in the subsequent slides * from rewardive corporation Web Sites as new properties have come up after name was published.Six largest multiplex operators of India tabulated above operate 114 screens blossom across 25 properties with a additive seating capacity of 33,263. This constitutes 34%, 41% and 37% of Indias total multiplex properties, screens and seats respectively. (Source Market Estimates) Consulting Key faker Adlabs Films Adlabs Upcom ing Multiplexes Nam e City Screens Cineplex Adlabs Ansal Vaishali Plaza subway Adlabs Mangal Adlabs Goldspot Adlabs Adlabs Palm Beach Himalaya Adlabs RDB Boulevard IMAX, Mani square(a) Ansal essence Gopalan Legacy Adlabs Dattani Mall Nam eSeats 1,076 1,003 1,491 1,102 1,362 1,008 1,200 1,050 1,350 1,200 1, atomic number 6 1, carbon Adlabs approaching Multiplexes Name City Screens Seats Sangam Adlabs Mumbai 4 1250 R Town Fortune City Mall Ansal Plaza Maheshwari Parmeshwari Adlabs tip, Borivali Rap Mirage lash Medi a Ltd RAP Media Ltd RAP Media Ltd RAP Media Ltd Mumbai Bangalore Gurgaon Hyderabad 8 to 10 8 to 10 3 5 to 6 2200 2,200 1,000 one hundred sixty0 Mangalore Ghaziabad Mumbai Indore Hyderabad New Mumbai Ahmedabad Kolkata Kolkatta great Noida Bangalore Thane 3 6 4 4 4 5 3 4 4 4 4 RAP Metropolitan RAP Media Ltd Patiala Little world Mall Kharghar Paras Zirakhpur Downtown Total upcoming Mumbai Agra Amritsar Jalandhar Ludhiana Mohali (Chandigarh) Moradabad 4 3 6 5 7 5 3 5 4 to 5 4 122 128 1250 coulomb4 1,700 1, vitamin D 2,000 1,500 1016 1,450 1,200 1300 36,212 Adlabs Film s Ltd Exis ting M ultiple xe s positioning City Scre e n Kalyani Nagar CIDCO Wadala Mulund Kanjurmarg Andheri Sahibabad Industrial E enjoin Pune Nashik Mumbai Mumbai Mumbai Mumbai Ghaziabad 3 3 5 4 4 5 4 28Se ats 1,109 1,200 1,832 1,353 1,263 1,282 1,313 9,352 Gold Adlabs Divya Adlabs Imax Adlabs R-Adlabs Huma Adlabs Fame Adlabs Aerens R Imax at Rap Adlabs Adlabs Films Ltd was founded by Mr. Manmohan Shetty and Mr. V asanji Mamania In 2005, (Reliance ADA Group) acquired a 50. 16% plunk for in Adlabs Films Limited Consulting Key impostor E-City fun E City Entertainment (Essel Group)Nam e Sigma Mall frolic land amusement republic City summation Cross River Mall Ansals Plaza II Pacif ic Mall Nand Plaza summercater Republic Fun Republic TDIChandigarh Fun Republic Malnz Times even up (Jagat Cinema) axis Mall Lake Mall Times Square Dindayal City Mall Fun Republic Dreams Mall Kukreja Mall AEZ Carnival solid ground North Square TDI Mall V3S Mall Mittals Mega Mall Ansals Plaza Mittals Mega Mall solarise City Mall Ansals Royale Plaza meter Total Location Bangalore Hyderabad Lucknow Mumbai New Delhi Punjab Agra, Uttar Pradesh Agra, Uttar Pradesh Ahmedabad Chandigarh Chandigarh Coimbatore G. T. highroad Jaipur Kolkatta Kolkotta Kota M.P Mumbai Mumbai Mumbai NCR (Uttar Pradesh) New Delhi New Delhi New Delhi Panipat, Haryana Punjab Punjab Rajasthan Rajasthan Since /Targe t Date March, 2006 aforethought(ip) 2007 April, 2006 mean 2007 March, 2006 intend 2008 May, 2006 mean 2006 June, 2001 November, 2003 Planned 2007 Planned 2006 Planned 2008 December,2005 Planned 2008 Planned 2007 Planned 2006 Planned 2006 August, 2003 Planned 2006 June, 2006 March, 2006 February, 2006 December, 2005 February, 2006 Planned 2006 Planned 2007 Planned 2009 Planned 2007 Planned 2007 No of Scre e ns 3 6 4 4 4 4 4 3 6 4 3 6 6 2 4 4 4 4 6 5 4 3 3 3 3 3 4 4 4 3 120E-City Entertainment is a transaction segment of the Essel Group. In Film Exhibition they have 2 Brands 1. Fun Republic Entertainment 2. Fun Multiplex. E City Entertainment has made a prominent appearance Metros across Regions kindred Mumbai and Delhi. And is seen to be targeting score 2 Tier 3 Cities like Coimbatore, Rajasthan, Punjab, Kolkata Consulting Key pseudo Shringar CinemasShringar Cinemas Ltd Existing Multiplexes Fame Adlabs 5 screens , 1342 seats Fame Malad 6 screens, 1571 seats Fame Nasik 3 Screens, 1407 Seats Fa me Kandivali 4 Screens, 1275 Seats Fame Kolkata 4 Screens, 900 Seats Fame Pune 3 Screens light speed9 Seats raised(a) Total 25 Screens 7504 Seats Shringar Cinemas, managed by promoters who have been one of the largest film distributors in western India for Hindi films. Company is focussing on Western India i. e. Mumbai, Pune, Nashik, Aurangabad as well as eastern Indian i. e. Kolkata Shringar Cinemas Ltd Upcoming Projects FAME FAME FAME FAME FAME FAME Allahabad Ghatkopar Aurangabad Hyderabad Surat Raj Empire Thane 4 screens and 1250 seats 3 screens and approximately special K seats. 3 screens and approximately 900 seats 6 Screen 5 screens Consulting Key impostor Inox vacant LtdInox Leisure Ltd Existing Multiplexes No of screens City Location Mumbai Nariman Point 5 Bangalore Magrath pathway 5 Vadodara Race socio-economic class Circle 4 Pune Bund Garden 4 Goa Panaji 4 Kolkatta Salt Lake 4 Kolkatta Elgin Road 4 Indore Sapna Sangeeta 3 Darjeeling Laden La road 3 Jaipur Vai bhav Nagar 2 eminent Total 38 No of seats 1335 1103 1318 1316 1271 1144 1016 1080 811 787 11181 Inox Leisure LtdUpcoming Projects Location Screens Seats Vishakhapatnam Raipur Lucknow Kolkatta Kharagpur Jaipur Jaipur Hyderabad Chennai Bangalore Bangalore Bangalore grounds Total 4 4 4 5 4 3 3 6 5 4 7 7 56 1300 1250 one thousand 1042 1200 750 750 1470 1156 1century 1860 1720 14598 Inox Leisure plans to target very specifically cities in South India Like Bangalore, Chennai, Hyderabad, Vishakhapatnam. Consulting Key actor PVRPVR Cinemas Existing Locations Name PVR Bangalore PVR Priya PVR Saket PVR Vikaspuri PVR Narania PVR Gurgaon PVR EDM PVR Faridabad PVR SRS Faridabad PVR Plaza spice PVR PVR Hyderabad PVR Rivoli PVR Lucknow PVR Indore PVR Mumbai Grand Total Location Screens Seats Bangalore 11 NA Delhi NA 944 Delhi 4 railway yard Delhi 3 921 Delhi 4 830 Gurgaon 7 1300 Ghaziabad 3 720 2 480 Faridabad (Ha NCR Delhi 3 776 Delhi NA 300 Noida NA 1821 Hyderabad 5 812* Delhi 3 329* Luck now 4 928 Indore 5 1199 Mumbai 2+3 NA 57 approx 12360 Approx PVR Cinemas UpcomingCinemas PVR C INEMAS Mumbai PVR C INEMAS New Delhi PVR C INEMAS Mumbai PVR C INEMAS Mumbai PVR C INEMAS New Delhi PVR C INEMAS C hennai PVR C INEMAS Mumbai PVR C INEMAS Ludhiana PVR C INEMAS Gurgaon Prashant Vihar, Delhi Latur Aurangabad Silver Arc, Ludhiana integral Screens 6 Screens 6 Screens 7 Screens 8 Screens 6 Screens 7 Screens 4 Screens 4 Screens 2 Screens 3 Screens 3 Screens 3 Screens 3 Screens 71 Screens Seats 1750 1269 2050 2200 1500 1600 1250 nose candy0 450 800 1050 1 ampere-second 1000 Expected In pecuniary 2006 monetary 2007 fiscal 2007 financial 2007 Fiscal 2008 Fiscal 2007 Fiscal 2007 Fiscal 2007 Fiscal 2006 Fiscal 2006 Fiscal 2006 Fiscal 2006 Fiscal 2008 9310 Seats PVR Cinemas setup Indias archetypical multiplex in 1997 at Delhi. The Company has been funded by ICICI Venture and is in terminal stages of closing second round of equity funding for future expansion PVR Cinemas is focusing on developing multiplex properties in Northern, Western and Southern India (Bangalore &038 Hyderabad) Consulting Key player Wave Cinemas Wave Cinemas is a originate of The Chadha Group. Currently operates 13 screens spread across 3 properties. With existing operations in Noida, Kaushambhi and Lucknow. Wave Cinemas is a regional player focusing on Northern India. enetrating in untapped raw territory in UP and Ghaziabad. Wave Cinemas Existing Cinemas Location Screens Noida 5 Kaushambi ( Ghaziabad) 4 Lucknow 4 Grand Total 13 Seats 1804 1192 1394 4390 Wave Cinemas Upcoming Projects Mohali ALL LOCATIONS ARE Ludhiana IN NORTHERN INDIA Raja Garden Delhi Consulting Consulting abstract Growth Drivers Growth drivers responsible for the anticipate increase in the number of multiplex cinemas are as follows An increase in disposable income in the hands of an always expanding Indian middle class demographic changes tax benefits for multiplex cinemas retail big H Favourable Organ ised Entertainment accession in the number of high kind Hindi films. Consulting Favourable Demographics Demographics (source CIA fact sheet of paper July 2005 Est) Current Population 1 billion+ (1,080,264,388) growing between 1. 4% to 1. 8% annually Age structure 0-14 days 31. 2% 15-64 years 63. 9% 65 years and over 4. 9% median(a) age 24. 66 years A younger population tends to have higher(prenominal) aspirations, and will spend more as it enters the earning phase. Consulting attach in Disposal IncomeClasses prosperous Consuming Climbers Aspirants Destitutes Between Above USD 4,600 USD 970 4,600 USD 470 970 USD 340 470 little USD 340 Households in Households in Households in 1995 2000 2006E 1 billion 3 cardinal 6 one million million 29 million 66 million 75 million 48 milliom 66 million 78 million 48 million 32 million 33 million 32 million 24 million 17 million URBAN CONSUMER SPEND % (Source KSA Technopak) Categories 1999 2002 Savings &038 Investments 14 5. 2 Co nsumption Shopping 22 24. 3 Leisure &038 Entertainment 21 29. 1 Grocery 43 41. 4 Sub total of Consumption 86 94. Total 100 100 Source CII KPMG Report 2005 accredited NCAER Multiplexes generally cater to High and Middle income Groups, with an increase in the number of households within this earning group, will result to higher consumption and spending patterns. in addition migration of households from lower income to middle income levels will make headway drive the consumption patterns. Urban consumers have change magnitude their expenditure on leisure &038 entertainment. Simultaneously spends on eating out, movies and theater, and books and symphony will increase. ConsultingOnset of Retail Activity though Organised retail comprises of 3% of the total retail pie of USD 200 Billion, it is growing at 25 to 30% CAGR Number of malls in India is expected to increase from approximately 50 as of the end of 2004 to around 250 by the end of 2006. (Source BW Marketing Whitebook, 2005, at tributed to KSA Technopak. ) at that place will be approximately 600 malls by 2010 Securities study) (Source Edelweiss Multiplexes are one of the grit tenants in large format malls, as their presence increases footfalls by approximately 40-50%. Source CII) Consulting Entertainment tax benefits Entertainment evaluate Exemption / Benefit nominal Minimum Seating No of Screens 1250 4 1000 1000 1000 NA NA 3 3 3 NA 3 STATE Delhi Gujrat Maharashtra Mumbai Kalyan, Thane, Dombivali, Navi Mumbai, Nasik, Aurangabad, Nagpur Vasai, Virar, Nallasopara Karnataka UP Tamil Nadu West Bengal ENTERTAINMENT TAX 30% 100% 45% 45% 40% City Mumbai Rest of Maharashtra Punjab Kolkatta Rajasthan UP Bhopal/Indore/ Jabalpur/Gwali or Yr 1 100% 100% 100% 100% 100% 100% Yr 2 100% 100% 100% 100% 100% 100% Yr 3 100% 100% 100% 100% 90% 100%Yr 4 75% 75% 100% 100% 80% 100% Yr 5 75% 75% 100% NA 70% 100% 34% 40% 60% 15% 30% 100% 100% 100% 75% 50% 1000 3 Source PVR Cinema Research In order to encourage investment many another(prenominal) state governments have announced policies offer entertainment tax benefits. This has encouraged the growth of Multiplex Cinemas and also encouraged singlescreen theaters to deepen into Multiplexes. Quantum of entertainment tax benefit would be dependant on compliance with real conditions specified by the relevant state. Consulting Increase in Hindi Movies 001 Average number of high grade Hindi films released per workweek 1. 15 2002 1. 46 2003 1. 58 2004 1. 71 Source Bollywood Emerging Trends &038 Growth Drivers Yes Bank Report 2005 The number of Hindi movies has increased from year 2001 to 2004. This signifies immense potential and is emphatically a sign of being a crowd puller and generating more revenue. Consulting regulative The Indian film exhibition sector is highly regulated and changes in regulations whitethorn have an adverse effect on business. Regulations by both the central and the state governments.Policies extend to aspects of buil ding and safety requirements, licensing requirements, tax and entertainment tax registrations and grant of exemptions from the defrayal of entertainment tax. Provisions of laws allow Requiring a minimum distance between the screen and the front row seats, which distances were set base on large screens used in singlescreen cinemas and not the smaller screens used at most Multiplex Cinemas. The permissible drive at which the electrical current whitethorn be supplied to a projector, which provision does not reflect the technological advances in respect of Multiplex Cinemas. The reservation of playing quantify for a scientific film, educational film, watchword reel or documentary. , Restrictions on ticket prices in certain states. Consulting Break-Up of Revenues REVENUE patrons Spend Ticket Revenue Advertising F&038B Revenues Conducting hire Parking Charges Management Fee Consulting Break-Up of bell Cost Direct Cost Distributors helping Entertainment Tax F&038B Cost A 1250 seater Multiplex in a metropolitan city would cost anywhere between Rs80-90mn. This does not include the cost of land because the land may be leased Personnel CostDepreciation relate Consulting Way Forward Over the nigh 18-24 months, 6 of the largest multiplex operators in India mentioned before are likely to commercialize approximately 200-240 screens spread across 50- 60 new multiplexes. These multiplexes will have a additive seating capacity in excess of 55000-60000. There will also be an increase in number of multiplexes operated by smaller players, who constituted 66% of total multiplexes as of march 2005. It is estimated that number of run multiplexes in India will increase by 80-100% by end of 2006. By the end of 2006, 135+ multiplexes will house more than 160,000 seats spread across 500+ screens. These multiplexes will have significant calculate positive impact on the business economics of film production, financing, distribution and exhibition and indirectly on other appurtenant markets. (Source Yes bank) Consulting DEssence Consulting, New MHADA Complex, Bldg no. 1 , Office no. 2, Near PMGP Colony, Andheri East Mumbai 400093 Fax- 28228142 / Tel-28347425 www. dessenceconsulting. com EmaiL email&160protected com email&160protected com