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| The big picture |
| Byravee Iyer / Mumbai Mar 16, 2010, 00:19 IST |
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For a crowded city, the location can appear desolate. Located deep in Goregaon in the Mumbai suburbs, it is spread over several acres of land. The road meanders here and there, and finally takes you to the main building, the headquarters of Reliance MediaWorks. It was here, nearly 35 years ago, that Manmohan Shetty started a processing laboratory for ad films; it was aptly called Adlabs Films. Over the years, Shetty expanded into film financing and production. In 2001, he entered the multiplex business. And then he sold the company to Anil Ambani’s Reliance Capital Group.
Since then, Adlabs has grown from a Rs 80-crore company to a Rs 215-crore one now. From a few hundred employees, it today employs over 5,000 people. Six months ago, the company was renamed Reliance MediaWorks. Though it came last, the multiplex business fetches as much as 55 per cent of the business for the company. Big Cinemas, the multiplex brand, saw a 50 per cent increase in footfalls the quarter ended December 2009 as compared to the year-ago quarter. It runs 500 screens in India and abroad.
Much of it is natural growth, says Reliance MediaWorks Chief Executive Anil Arjun. “The economy was growing at 9 per cent, the service sector at 15 per cent; and we’re a film-fanatic country, only the infrastructure was lacking,” says he. “A film like 3 Idiots notched up Rs 300 crore. That means 32 million people (given the average ticket price of a little below Rs 100) saw the film, out of the population of one billion,” he adds.
KPMG’s head of media & entertainment, Jehil Thakker, too says that India is a severely under-screened country with fewer screens per million than other countries. Also, the whole film exhibition business is moving fast in favour of multiplexes. Though there are about 10,000 single screens and about 850 multiplexes, the latter account for as much as 40 per cent of the business.
Aware of this shift, Reliance MediaWorks wants to build scale. It has about 250 screens in the country and wants to add another 100 by the end of the year. “In this business, the players that build scale will see the most success,” Thakker points out.
The real thrust happened in 2008 when the multiplex chain rebranded itself as Big Cinemas with the tagline ‘Ab Bada Mazza Ayega.’ On top of that, it signed up megaplexes comprising around 18 screens in various cities. Experts feel that is the way to go. “Vast real estate development is a footfall creator. In newer areas like New Bombay, Gurgaon and Noida, people want entertainment options within the vicinity,” says Thakker.
Keen attention is paid to the format of the theatre. For instance, Reliance MediaWorks is setting up Ebony lounges which will be launched only in signature Big Cinemas. These will have fully reclining seats, the best possible sound system and an attached lounge which offers an exclusive menu. Then there’s the diner cinema concept which provides customers a full three-course meal.
At the same time, aware that a large segment of its growth comes from smaller towns where pricing may be a constraint, Big Cinemas has tweaked its prices. Cities like Tirupathi, Vellore, Madurai, Sivakasi and Dindigul account for 20 per cent of the multiplex business. To tap this market, tickets are priced economically at anywhere between Rs 10 and Rs 50. This is considerably less than what is charged in metros like Mumbai and Delhi where tickets cost up to Rs 280. In a bid to stay cost-efficient, seating quality, air-conditioning, sound and light systems, washrooms, upholstery and flooring vary depending on the price and location. “But the overall look of the theatres is consistent,” Arjun says.
More than half of Big Cinemas screens are located in 40 cities outside India, covering the US, Malaysia and the Netherlands. According to Arjun, the US has a huge NRI population, which he pegs at about four million, while Malaysia has a massive Tamil population. So Reliance MediaWorks decided to acquire small theatres in New York, New Jersey, Washington DC, San Francisco and San Jose. The move seems to be paying off. 3 Idiots raked in $4.9 million in North America, compared to $1.9 million from Om Shanti Om in 2007. Not surprisingly, Reliance MediaWorks is hoping to do the same with European markets. It has partnered with Pathé Theatres to open three Big Cinemas screens in Amsterdam, Rotterdam and The Hague.
But even as all these initiatives are underway, there’s a battle raging with longtime rival Inox over the acquisition of Fame. Inox acquired 51 per cent in Fame India. But Reliance MediaWorks claims it offered a higher price. Now it has made a counter offer. Whatever the outcome, it is pretty clear, that the battle for the multiplex chain has only just begun.
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