Inox's consolidation plays out at a Fame near you

The second-largest multiplex brand is integrating its last acquisition with a sweeping change. Will letting go of Fame's branding work for it?

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Don't be taken aback if you find an Inox in place of your neighbourhood Fame theatre the next time you go to the movies. Even though Inox had acquired the cinema chain three years back, the changes are only visible now to an external audience.

However, while PVR has opted for a staggered brand replacement of Cinemax theatres it had acquired, capitalising on the latter's brand, Inox has transformed Fame's footprint in one sweep. Inox, it seems has no use for any vestigial benefits from the Fame brand even though it has rights to it. Alok Tandon, CEO at Inox Leisure says, "It is easier to manage one brand and scale up its equity through a bigger national presence."

It could also be due to the reach Fame has brought to the parent brand. PVR and Cinemax's presence nearly mirrored each other, but differed in scale. However, for Inox, Fame promises a firm foothold in cities like Mumbai and New Delhi, the twin cities that claim a lion's share of the film exhibition market (revenue from theatre-screenings). Inox, had a sparse presence in these cities and has been strong in the east.

"Fame gave us access to about 102 screens. It had a strong presence in Mumbai, just as we had in Kolkata. The acquisition complements us," says Tandon.

But what are the chances of cannibalisation of the audience in areas where both were present? Tandon says India is highly under-penetrated by theatres, an advantage for every player operating in the segment. Trade estimates suggest India has 10 screens per million compared to 125 per million in the US, for example.

The company is developing 11 properties which would add about 50 more screens by the end of this fiscal, informs Tandon. Tandon claims, "On an average, we spend Rs 1.75 crore per screen and we want to add to our number of screens year on year."

Inox is present in 40 cities with 73 multiplexes and 284 screens. PVR outnumbers it with 398 screens across 37 cities in India.

Inox Leisure, a company owned by Gujarat Fluorochemicals, had bought 43.28 per cent of the promoter, Shroff family's stake in Fame India for Rs 66.48 crore. It was the second brand acquisition of the Mumbai-based multiplex brand.

In 2006, Inox had acquired Calcutta Cinema, which operated the '89 Cinemas' brand. The two acquisitions make Inox the second-biggest multiplex chain in the country.

Tandon says, "Fame has been a strong brand. The product is being upgraded at few of the properties."

While prices differ from city to city, an afternoon show of a popular movie in Kolkata at the erstwhile Fame would have cost Rs 200-250 per head while one in Inox costs Rs 150-180.

Inox is now ready to shed Fame's premium pricing as well. Tandon says, "A patron should feel comfortable and be able to relate to our brand."

Inox balances its growth in metros and in tier II and III towns with the help of differential pricing at its properties. "Our pricing varies from city to city and movie to movie because we feel that there is ample opportunity to grow in every city and town, cinema being a religion," says Tandon.

Amit Patil, analyst at Angel Broking says multiplex chains generally follow a revenue-sharing model with malls in smaller towns. "This helps both the mall promoters and multiplex chains," he adds.

To avoid piracy, Inox is gearing up to digitise all its theatres as digital prints reduce piracy and cost of prints, according to Tandon.

But will the erstwhile Fame's heft help it pip PVR to the top slot in multiplexes? The next few months will spell it out as both chains race to integrate their acquired brands.