After opening its first multiplex in Amritsar in 2009, the Mexican multiplex chain, Cinepolis, has embarked upon an aggressive expansion plan in India. At present, the chain operates 84 screens in the country across 13 cities. By 2017, it plans to raise the number to 400.
In the first phase of expansion, Cinelpolis will invest close to Rs 150 crore this year to add 60 new screens and bring the total to around 145 screens at the start of 2015. Come April, 14 of these screens will open in Thane’s Viviaana Mall, where Cinepolis’ latest expansion is to take shape.
The sprawling 14 screen multiplex will be home to India’s first 4DX screen apart from the usual 2D, 3D and IMAX screens. Cinepolis entered into a deal with South Korean company CJ Group to use its 4DX technology in Cinepolis properties. The multiplex chain promoter invested $25 million in the deal, and now has 17 4DX screens across Latin America.
4DX is a technology that allows movie goers sensory stimulation while watching a movie. This includes certain kinds of motion, effects like bubbles, mist, smoke and certain kinds of smell. Any movie that is available in 3D format can be converted to 4DX by incorporating a software onto the digital print of the movie in the post-production phase.
One has to pay more for watching a 4DX movie. But, Alejandro Ramirez, global CEO, Cinépolis, says his cinema chain will never be inaccessible to masses in terms of cost. The cost of MAX and 4DX screens will be 50 to 70 per cent higher than normal ticket rate (which is Rs 150-180) in order to compensate for the cost of the technology and service and the royalty Cinepolis pays to its technology partners IMAX and CJ Group.
“We find three reasons to be optimistic about India. First, it is an under-screened country, which means there is scope to add new screens. Second, the middle class is growing and will continue to grow. Third, it has a movie-going culture that is very encouraging,” he says.
According to him, popularity of local content and interest in Hollywood films make film exhibition a lucrative business in India. Cinepolis goes by the policy “big is better” and prefers to have multiplexes that are at least four-screen big, each screen having a capacity of 200 seats on an average.
The company believes it is important to have the space to provide variety of movies, given the varied tastes of the Indian public. At an average 40 per cent occupancy across its screens and an average ticket price range of Rs 150-180, in-cinema advertising and food and beverage (F&B) revenues, Ramirez believes 5 years is a realistic break-even period in India. The only impediment he feels is the heavy taxation in some states.
“F&B is a significant part of our plans. We do not outsource our food and beverage section and have the operations in-house. There is a great scope to ramp it up. If you compare it with a country like the US, a customer spends 50 per cent of the cost of a movie ticket on F&B, while in India, 30 per cent of the ticket cost is usually spent on F&B. In Mexico, the amount spent on movie tickets and F&B is almost equal,” says Ramirez.
Cinepolis focuses on providing the complete movie going experience. This includes stewards taking the order at your seat, valet parking, reclining seating among other things. According to Ramirez, this is the kind of service that will help ramp up the F&B revenues, though they may try it at a smaller scale in India.
While it has in the past looked at growing inorganically through acquisitions, Ramirez is convinced that it is better to focus on expanding organically. Currently, the multiplex chain leases real estate on a rent plus revenue-sharing model and is happy to continue doing so.