Multiplex-giants gain power in film releases

The phenomenon has spread to tier-2 cities, apart from being major players in metros, other urban centres

Movie producers and distributors are finding it more difficult to dictate the terms of film screenings. For, multiplexes are increasing their influence through expansion. With their increased reach, multiplex owners are now in a better position to decide revenue-share models and content costs. Earlier, movie producers had the upper hand.

With this, multiplexes have come a long way. PVR started with one property in Delhi 17 years ago. Now, it is a behemoth with 353 screens across India and controls almost a third of multiplex screens. The top three multiplex players — PVR, INOX Leisure (which also owns Fame Cinemas) and BIG Cinemas, control 75 per cent of screen space.

Acquisitions are driving this growth. Recently, PVR acquired promoters’ shares in rival multiplex chain Cinemax. INOX Leisure might also be evaluating options to buy out other multiplex chains. These developments indicate the shift of power to multiplex players.

POWER SHIFT

• With their increased reach, multiplex owners are now in a better position to decide revenue-share models and content costs
• The top three multiplex players — PVR, INOX Leisure (which also owns Fame Cinemas) and BIG Cinemas — control 75 per cent of screen space
• Acquisitions are driving this growth

“Studios can’t survive without multiplexes and this is very dangerous. Any kind of power corrupts and PVR is now the most powerful multiplex operator. Ultimately, they will be able to dictate the terms,” said Amod Mehra, senior trade analyst and film critic.

PVR and Inox have a strong pan-India presence, which could intimidate studio owners. “These two chains have the power to make or break any movie. Producers and distributors will have to listen to them,” said a senior investment banker.

There are already a few victims. A film producer who refuses to be identified says he had suffered in the past. “It is already difficult to plan a release with three-four films releasing every week. Small films rarely get good screens and if we don’t agree to a PVR or an INOX, they may kill the movie,” he said.

According to experts, the multiplex industry is coming of age. The expansion drive, which started in 2005 with Anil Ambani buying out Adlabs Films and acquiring screens with rapid speed, is now settling.

The phenomenon of multiplexes has already spread to tier-2 cities, apart from being major players in metros and other urban centres. According to a report by FICCI-KPMG, multiplexes will double over the next five years, taking the total tally to 2,200 screens by 2016.

“The big daddies of the cinema exhibition business are becoming bigger. The top two exhibitors will have a consolidated top line revenue of Rs 1,100 crore. What it means is they will pull down the distributors’ share. It is time for smaller chains to either get aligned with big chains or get marginalised,” said a senior executive with a multiplex chain. As the big two get bigger, trade pundits said, smaller multiplex owners will align with them or stay small.

However, these chains are not without their own problems. Their major challenge is non-availability of differentiated content.

As content is almost the same, a price war is imminent. It could go in the favour of consumers but can affect the health of the multiplexes if they chase volumes.