Multiplex Industry in India

Consulting fabrication Overview The Indian film industry is the largest film industry in the foundation in terms of the event of films produced and admissions each year. Revenue for 2004 was estimated at Rs. 59 jillion (US$1. 3 cardinal), which was less than 1% of global film industry revenue and a fraction of the U. S. flick industry revenue, which was US$9. 49 billion in 2003. (Source CII ) Film Industry Revenues 12% 4% 57% 9% 2% 2% 14% Domestic Theatrical Leakages piracy In movie theatre Ads Music Satellite / DTH / IPTV DVD / VCD / foreign Cable Overseas TheatricalNearly 80% of Indian Industry revenues come from Domestic and Overseas Theatrical. On the contrary US Film Industry earns only 35% from nook office sales and remaining 65% is derived from other revenue sources This distinctly planetary houseifies the onset and potential of multiplees in the Indian Film Exhibition Sector. Consulting Consulting The Film Exhibition Industry The Indian film exhibition sector had revenues of Rs. 34 billion in 2004. (SourceCII) The Film Exhibition Industry can be divided into two segments single and double-screen cinemas and multiple cinemas, i. e. hree screens or to a greater extent. As of environ 2005, there were well-nigh 12,000 cinemas in India of which 73 were multiplexes with a do of 276 screens. multiplees imprint only 0. 6 % of about 12,000 cinema halls in India, just identify for 28% to 34 % of the box office take for the Top 50 films in 2004. (Source Yes Bank) Consulting The Film Exhibition Industry Multiplex more than 60 additional multiplexes with more than 220 additional screens are slated to commence operations by the set aside of 2006, a harvest-tide rate of 80- deoxycytidine monophosphate% Average price of a ticket for a multiplex cinema is Rs. 5 85 but the number of screens in multiplexes represented only 2. 3% of total screens in India as of March 2005. (SourceIndustry Estimates) An gain in the number of Multiplex screen s should conduct in an increase in film exhibition revenues, so the opening of mod 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 140 120 deoxycytidine monophosphate 80 60 40 20 0 India UK Belgium Ger many Spain Italy Ir eland Denmar k Fr ance USA 117 77 52 30 12 43 45 46 53 61In India, the number of screens per zillion of race is just 12 whereas the average in western countries is 40. India needs 20,000 screens to r overthrower 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 North South einsteinium Delhi Kolkata Mumbai & Suburbs Ahmedabad Ghaziabad Gurgaon 42 3 5 West Geographic Distribution of Theatres Across India Ficci E&Y discover 2004Andhra Pradesh 24% 21% Kerala Karnataka Maharashtra Uttar Pradesh Tamil Nadu Others 10% 19% 8% 9% 9% form of Screens 3 Screens 4 Screens 5 Screens 6 Screens More than 6 Screens Number of Number of Number of Seats / Multiplexes Screens Seats 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 Majority of multiplexes eat up 3 screens. The bow enlists the number of multiplexes sub-divided by the number of screens and lay. Consulting Consulting depict playersCompany PVR Cinemas * Inox leisure time Limited Adlabs Films * Shringar Cinemas roll Cinemas E-City Cinemas aggregate % 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 mystify been co ns idered fo r this analys is So urce Bo llywo o d Emerging Trends & Gro wth Drivers Yes Bank Repo rt 2005 Kindly note that the No of Properties , Screens and Seats have been updated in the subsequent slides * from respective Company Web Sites as new properties have come up after report was published.Six largest multiplex operators of India tabulated supra operate 114 screens spread across 25 properties with a cumulative seating area capacity of 33,263. This constitutes 34%, 41% and 37% of Indias total multiplex properties, screens and sit down respectively. (Source Market Estimates) Consulting Key player Adlabs Films Adlabs Upcom ing Multiplexes Nam e City Screens Cineplex Adlabs Ansal Vaishali centre Metro Adlabs Mangal Adlabs gildedspot Adlabs Adlabs Palm Beach Himalaya Adlabs RDB Boulevard IMAX, Mani Square Ansal gist Gopalan legacy Adlabs Dattani essence 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, degree Celsius Adlabs Upcoming Multiplexes Name City Screens Seats Sangam Adlabs Mumbai 4 1250 R Town Fortune City shopping centre Ansal essence Maheshwari Parmeshwari Adlabs stripe, Borivali Rap Mirage RAP Media Ltd RAP Media Ltd RAP Media Ltd RAP Media Ltd Mumbai Banga lore Gurgaon Hyderabad 8 to 10 8 to 10 3 5 to 6 2200 2,200 1,000 1600 Mangalore Ghaziabad Mumbai Indore Hyderabad untried Mumbai Ahmedabad Kolkata Kolkatta Greater 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 correspond upcoming Mumbai Agra Amritsar Jalandhar Ludhiana Mohali (Chandigarh) Moradabad 4 3 6 5 7 5 3 5 4 to 5 4 122 128 1250 century4 1,700 1,500 2,000 1,500 1016 1,450 1,200 1300 36,212 Adlabs Film s Ltd Exis ting M ultiple xe s Location City Scre e n Kalyani Nagar CIDCO Wadala Mulund Kanjurmarg Andheri Sahibabad Industrial E put up 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. Vasanji Mamania In 2005, (Reliance ADA Group) acquired a 50. 16% stake in Ad labs Films Limited Consulting Key player E-City recreation E City Entertainment (Essel Group)Nam e Sigma Mall gaming res publica recreation majority rule City Centre Cross River Mall Ansals Plaza II Pacif ic Mall Nand Plaza Fun Republic Fun Republic TDIChandigarh Fun Republic Malnz Times Square (Jagat Cinema) Axis Mall Lake Mall Times Square Dindayal City Mall Fun Republic Dreams Mall Kukreja Mall AEZ Carnival Country North Square TDI Mall V3S Mall Mittals Mega Mall Ansals Plaza Mittals Mega Mall Sun City Mall Ansals Royale Plaza honey oil Total Location Bangalore Hyderabad Lucknow Mumbai bracing Delhi Punjab Agra, Uttar Pradesh Agra, Uttar Pradesh Ahmedabad Chandigarh Chandigarh Coimbatore G. T. channel 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 mean 2007 April, 2006 plan 2007 March, 2006 aforethought(ip) 2008 May, 2006 Planne d 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 line of business segment of the Essel Group. In Film Exhibition they have 2 Brands 1. Fun Republic Entertainment 2. Fun Multiplex. E City Entertainment has make a prominent appearance Metros across Regions like Mumbai and Delhi. And is seen to be targeting gradation 2 Tier 3 Cities like Coimbatore, Rajasthan, Punjab, Kolkata Consulting Key player Shringar CinemasShringar Cinemas Ltd lively Multiplexes Fame Adlabs 5 screens , 1342 seats Fame Malad 6 screens, 1571 seats Fame Nasik 3 Screens, 1407 Seats Fame Kandivali 4 Screens, 1275 Seats Fame Kolkata 4 Screens, 900 Seats Fame Pune 3 Screens coke9 Seats Grand Total 25 Screens 7504 Seats Shringar Cinemas, managed by promoters who have been one of the largest film distributors in Western India for Hindoo films. Company is focusing 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 grounds seats. 3 screens and approximately 900 seats 6 Screen 5 screens Consulting Key player Inox Leisure LtdInox Leisure Ltd alive Multiplexes No of screens City Location Mumbai Nariman Point 5 Bangalore Magrath Road 5 Vadodara Race Course Circle 4 Pune Bund Garden 4 Goa Panaji 4 Kolkatta Salt Lake 4 Kolkatta Elgin Road 4 Indore Sapna Sangeeta 3 Darjeeling soaked La road 3 Jaipur Vaibhav Nagar 2 Grand 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 Grand Total 4 4 4 5 4 3 3 6 5 4 7 7 56 1300 1250 grounds 1042 1200 750 750 1470 1156 1 c 1860 1720 14598 Inox Leisure plans to target very specifically cities in South India uniform Bangalore, Chennai, Hyderabad, Vishakhapatnam. Consulting Key player 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 gramme 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* Lucknow 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 TOTAL 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 1000 450 800 1050 1100 1000 Expected In financial 2006 monetary 2007 Fiscal 2007 Fiscal 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 first multiplex in 1997 at Delhi. The Company has been funded by ICICI Venture and is in final stages of resolution second round of equity funding for future expansion PVR Cinemas is focusing on developing multiplex properties in Northern, Western and Southern India (Bangalore & Hyderabad) Consulting Key player joggle Cinemas Wave Cinemas is a part 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 blue INDIA Raja Garden Delhi Consulting Consulting Summary Growth Drivers Growth drivers responsible for the evaluate increase in the number of multiplex cinemas are as follows An increase in disposable income in the hands of an ever expanding Indian pump class demographic changes value wellbeings for multiplex cinemas retail boom prosperous Organised Entertainment Increase in the number of uplifted regularize Hindi films. Consulting Favourable Demographics Demographics (source CIA fact sheet July 2005 Est) Current Populati on 1 billion+ (1,080,264,388) growing mingled with 1. 4% to 1. 8% annually shape up structure 0-14 long time 31. 2% 15-64 years 63. 9% 65 years and over 4. 9% Median age 24. 66 years A younger population tends to have higher aspirations, and provide spend more as it enters the earning phase. Consulting Increase in Disposal IncomeClasses Rich Consuming Climbers Aspirants Destitutes amidst Above USD 4,600 USD 970 4,600 USD 470 970 USD 340 470 Less USD 340 Households in Households in Households in 1995 2000 2006E 1 meg 3 million 6 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 & Investments 14 5. 2 Consumption Shopping 22 24. 3 Leisure & 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 racy and Mid dle income Groups, with an increase in the number of households within this earning group, exit result to higher consumption and spending patterns. Similarly migration of households from lower income to middle income levels testament further drive the consumption patterns. Urban consumers have increased their using up on leisure & entertainment. Simultaneously spends on eating out, movies and theater, and books and music 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, attributed to KSA Technopak. ) thither will be approximately 600 malls by 2010 Securities study) (Source Edelweiss Multiplexes are one of the moxie tenants in large format malls, as their presence increases footfalls by approximately 40-50%. Source CII) Consulting Entertainment tax benefits Entertainment Tax Exemption / arrive at Minimum 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 evaluate 30% 100% 45% 45% 40% City Mumbai peacefulness 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 state governments have announced policies offering entertainment tax benefits. This has encouraged the growth of Multiplex Cinemas and also encouraged singlescreen theaters to convert into Multiplexes. Quantum of entertainme nt tax benefit would be dependant on compliance with certain conditions specified by the relevant state. Consulting Increase in Hindi Movies 001 Average number of high grade Hindi films released per week 1. 15 2002 1. 46 2003 1. 58 2004 1. 71 Source Bollywood Emerging Trends & Growth Drivers Yes Bank Report 2005 The number of Hindi movies has increased from year 2001 to 2004. This signifies immense potential and is definitely a sign of being a crowd puller and generating more revenue. Consulting Regulatory The Indian film exhibition sector is highly regulated and changes in regulations may have an adverse effect on business. Regulations by both the substitution and the state governments.Policies extend to aspects of building and safety requirements, licensing requirements, tax and entertainment tax registrations and grant of exemptions from the payment of entertainment tax. Provisions of laws include Requiring a marginal distance between the screen and the front row seats, w hich distances were set found on large screens apply in singlescreen cinemas and not the smaller screens used at most Multiplex Cinemas. The permissible pressure at which the galvanising current may be supplied to a projector, which provision does not recoil the technological advances in respect of Multiplex Cinemas. The reservation of playing times for a scientific film, educational film, news reel or documentary. , Restrictions on ticket prices in certain states. Consulting Break-Up of Revenues REVENUE Patrons overleap Ticket Revenue Advertising F&B Revenues Conducting Fee pose Charges Management Fee Consulting Break-Up of Cost Cost Direct Cost Distributors parcel Entertainment Tax F&B 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 Interest Consulting Way Forward Over the nigh 18-24 months, 6 of the largest multiplex operators in India mentioned earlier are likely to exploit approximately 200-240 screens spread across 50- 60 new multiplexes. These multiplexes will have a cumulative 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 operating 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 orchestrate positive impact on the business economics of film production, financing, distribution and exhibition and indirectly on other ancillary markets. (Source Yes bank) Consulting D union 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 emailprotected com emailprotected com