Devang Sampat (DS): First, I would like to thank Team Box Office India for coming up with this novel concept for their sixth anniversary issue. Congratulations also on completing six successful years and for organising this session. Now let’s hear everyone’s point of view on how the exhibition sector will grow in the next few years.
Amit Sharma (AS): Exhibitors are largely dependent on good content. There is a lot of variety in the content being made nowadays. There’s definitely growth in the content and filmmakers are making movies keeping the evolving tastes of the audience in mind. That’s why we’ve see a growth in footfalls in the recent past as compared to last year. I’m not only talking about our own chain of cinemas but across multiplex chains, which is a good sign for India cinema.
Apart from rich content, there’s another reason for the apparent increase in footfalls as last year didn’t see many releases in the months of March, April and May. You will always have a hit or a flop, you will always have a Tanu Weds Manu Returns and a Bombay Velvet too but, most importantly, now every week, there is content coming in. Every Friday, the audience decides whether they want a particular movie to run or not but there has to be a flow of movies.
Of course, English films are now delivering good revenue and people are accepting Hollywood films, not only in metro cities but also in Tier II and Tier III cities. I also believe that regional films are now playing a major role. For instance, a film like Bahubali: The Beginning has done good business in North India. Moving away from globalisation, now Indianisation is happening. 10 years ago, things were very different. So, a Tamilian was comfortable working only in the Tamil film industry or a North Indian would be comfortable working within the North Indian space. But, now, people are relocating and there is a lot of diversification, leading to plenty of cross-traffic between North and South. This benefits exhibitors and, for instance, we have a lot of Telugu film bookings at our Ajmer property.
DS: Are you saying that regional films have increased their share in the revenue pie?
AS: Absolutely. Apart from that, with multiple multi-screen cinemas, you need content to cater to different screens. Five years ago, we did not have Punjabi and Bengali films playing a vital role but in the last five years, the same language films have made huge strides, and, in some cinemas, 30 to 40 per cent collections are coming from Bengali and Punjabi films alone.
Satwik Lele (SL): I am sure you would all agree that ours is a capital-intensive industry. With the saturation of screens in Tier I cities and metros, there is an opportunity to expand in Tier II and Tier III cities. That is where the market really is. The immediate opportunity in Tier II and Tier III cities is the conversion of single-screens into multi-screens. This is an extremely capital-intensive industry, yet there is no support from the government, even in the form of a tax holiday, for screens that are converted. So, there is an issue of saturation and there is also an issue with the capital required to expand to Tier II and Tier III cities. I think we must collectively approach the government for support.
DS: Basically, you’re saying that the exhibition sector has room to expand but only with the support of the government.
SL: Most definitely!
Alok Tandon (AT): I totally agree that the opportunity to grow is immense. Look at the Indian film industry and at the fundamentals. The fundamentals are absolutely in place. The Indian film industry has grown a lot over a period of time. In 2010, this was a `83 billion industry and the number was pegged at `136 billion this year. According to projections, this will touch `200 billion by 2019. That’s a growth of 10 to 12 per cent each year, and the fundamentals are strong. We have a lot of potential to grow and there are a couple of reasons for that.
I think we all are in the right business at the right time because we Indians love films. Whether it is watching a film or watching cricket, both of them are like religion in our country. Having said that, look at the number of films we release. We release the largest number of films in the world. Last year, we had around 1,600 titles releasing in the country. And we watch films, almost every week. Look at the numbers: we sold slightly less than 2 billion tickets last year, only slightly less than in China. At the same time, we have only 9,000 screens in our country. What does that mean? It means that for every million pocket, we have nine screens and this includes multiplexes and single-screens. But if you only look at multiplexes, which account for only 14 to 15 per cent of the screen share but 50 to 60 per cent of the box office collections, it is 1 to 1.2 screens per million people!
So there is immense scope to expand, whether in Tier I, Tier II or Tier III. We are short on screens all over the country. Barring a few parts of metro cities, we have only a handful of screens where people like to sit and watch films. And when I say ‘like to sit and watch’, I mean with great sound, good projection systems, great acoustics, clean toilets and the overall experience and ambience. Considering all this, we can all expand. There is opportunity out there for everyone – and look at the genres of films releasing nowadays!
Today, the storyteller is experimenting with stories, and the way films are being shot is absolutely world class. We have different genres, from total masala entertainers, to the ‘multiplex’ film, which gets a limited release but people come and watch it. So, storytelling has evolved, and the stories have gotten better. Direction, photography and technology has improved. Even for exhibitors, the way we have used technology in our cinemas, whether it is to show our movies or to sell food or to advertise, everything has changed. I believe there is growth for every multiplex chain in India.
DS: So we have one more vote in favour of expansion in the exhibition sector.
Kamal Gianchandani (KG): Continuing with what, Alok and my other colleagues have spoken about the incremental point, which is on top of my mind too. One aspect of the exhibition business in the country is that you have pocket cities, which are pretty much saturated. And then you have pockets and cities, and by ‘pockets’ I mean catchment areas, for instance Andheri (in Mumbai) or Gurgaon (in Haryana), where you have a cluster of multiplexes in a certain catchment area. And then you have a large number of catchment areas. For instance, Virar (in Thane, Maharashtra) still doesn’t have a multiplex. Isn’t that right? Do we have any multiplex there?
AS: Yes, that is right, Nalasopara (in Thane, Maharashtra) has one but not Virar.
KG: That is exactly the point I am trying to make. It is a paradox in the country’s exhibition business that you have these catchment cities which are saturated and then you have catchment and cities which are absolutely blank. I am echoing what Alok spoke about, per screen density. There is a big gap in terms of what we have done in India compared to other developing and emerging markets like China. I don’t think if China qualifies as a developing or emerging market any more but the quantum of growth, the pace and the velocity of growth in China is simply mind-numbing.
And I think, the film industry as a whole needs to ponder on the fundamental issues apart from the issues we consistently speak about, like high taxes and licencing issues. The entire fraternity needs to look at how we can increase the density of screens in this country. I think that is the single, biggest opportunity we have. Apart from that, we have other Hollywood trends like mega-complexes and I think one of you spoke about conversion of single screens into multiplexes, which is a real opportunity. But I will leave those trends for the rest of the discussion.