Exhibitors in India are on an expansion spree with major players looking at smaller towns and cities for growth. There are five to six big players like Adlabs, Cinemax, Inox, Fame, PVR Cinemas etc and most of them are playing this strategy.
Some of the areas where forthcoming projects of Cinemax, an early player in the business are lined up are small cities like Malegaon, Nanded, Pathankot, Jalandhar, Jabalpur, Bhavnagar, Mehsana, Anand etc. Cinemax will add 62 new screens by March 2008, taking the total count to 100.
The investment for this expansion is close Rs 150 crore. “The plan is to have 400 more screens by March 2011” says Devang Sampat, Vice-President, Marketing and Programming Cinemax. “Of these 400, 120 to 125 screens will come up in Class B and Class C cities”, he adds.
Sampat divulges that on an average, while Class A cities cost Rs 75-80000 per feet, B and C class cities cost Rs 50-55000 per feet. Most of the new projects for Cinemax will happen through lease. Fame, of Shringar Cinemas is also looking to set up new properties at places like Vapi, Baroda, Vijayawada, Panchkula etc.
PVR, which will also pump in Rs 150 crore over the next two years for expansion, however is taking a cautious approach. Ajay Bijli, Chairman and Managing Director, PVR says, “We will be adding 150 screens to the existing 82 by 2009. Of these, 60 will be added this year.”
While it will set up new properties at Ludhiana, Jalandhar, Vishakhapatnam, Mysore and Chandigarh, Mumbai and Delhi will see strengthened presence. He also adds that location is a big factor that the chain considers before setting up a property. He divulges that the fit out cost for a screen in a metro would be Rs 2 crore and in smaller towns it may be lesser by Rs 60 lakhs. However, he says the metros offer better revenues from higher ticket prices.
As of now, PVR Talkies format is present in Aurangabad, Latur and Baroda. Some players are also adopting the strategy to buy out existing chains. Adlabs had recently bought out the chain Rave, which had 23 screens in NCR, UP, Punjab and Haryana.