A STUDY ON IMPACT OF MULTIPLEX CINEMA”S IN INDIA

Ashwin B. Sonone*
Rajendra N. Pathak**

ABSTRACT

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. The study provides a snapshot of the
market including the two segments multiplexes and single screen cinemas. An overview gives
a quick picture of the market with estimated market size, growth rate and theater distribution
in India. Various business models adopted by Indian multiplex operators are presented along
with typical revenue streams and cost base. An analysis of drivers reveals that on the supply
side - growth in film industry, improving real estate supply, and favorable tax exemptions have
help in growth of this sector while on the demand side favorable demographics, rising income
levels and willingness of people to spend on entertainment are increasing footfalls. The key
challenges identified include slowdown in economy, alternate modes of entertainment,
development delays, piracy and uncertainty over entertainment tax exemptions. The industry
is characterized by seasonality, low screen density, increasing average ticket prices, and
reducing shelf life of movies. The key trends identified include producers bypassing
distributors, shift to digital cinema, and alternate content in multiplexes, retail partnerships,
and new single screen formats. 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 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. The Hindi film industry is the most popular among them. Though India produces
the largest number of films in the world (Approximately 1000 per year), it accounts for only 1%
of the global film industry revenues. In spite of being over 90 years old, the Indian film
industry was accorded the status of industry only in 2000. Over the years, the Indian film
industry has been highly unorganized as film financing was dependent on private and
individual financing at extremely high interest rates. Only recently, the industry has got access
to organized finance. With vertical integration taking place between producers, distributors,
exhibitors, broadcasters and music company’s corporatization is now taking shape in the
Indian film industry. We believe, that corporatization, will bring about transparency,
accountability and consolidation which will help to improve the overall profitability of the Indian
film industry as well as reduce piracy and leakages which presently account for 14% of the
Indian film industry's revenues.
Ashwin B. Sonone * Rajendra N Pathak **
Asst Prof: TV Production Management Asst Prof: TV Engineering
Film & Television Institute of India (TV wing) Film & Television Institute of India (TV wing)
Law College Road Law College Road
Pune – 411 004 Pune – 411 004
Tel Nos: 020 25433060/25431817 Tel Nos : 020 25433016/25431817
Email : ashwinsonone@hotmail.com Email :rnpathak@yahoo.com