18 BLOCKBUSTER MAY 31, 2014

COLUMN

e have seen an interesting and eventful year at the movies in 2013. Clear success of multi-genres and high concept movies have contributed signifi cantly to the growth story. As unlike some other industries where growth is limited to ‘supply’ and to ‘installed capacity’, the sense of creative output and the range of such output in becoming more disruptive, more genre specifi c, more demographic specifi c. New benchmarks were set in domestic and International box offi ce. What made last year special was that audiences were appreciative of specialty genres, fi rst-time fi lmmakers and even new talent. We do think the growth story will hold..

Of the 9000 screens in India, only close to 1500 are multiplex screens with the higher average ticket price. Our national multiplex chains have the highest admissions per screen ratio as compared to leading chains world over. Though real estate prices are lopsided in large metros but that is balancing off and in smaller cities the rents are much lower and not in proportion to lower ticket prices - which means if the rent prices are 50 per cent less in smaller cities, the ticket prices are not 50 per cent less but more like 30 per cent less. We see the growth in locations and screens coming from tier two cities. Also organised retail is going through tough times and over 30 new malls in the top cities are near closure but that brings it more into focus - that the organised retail is now one of All Encompassing and in that model a theatre plex is getting to be indispensable. Malls and real estate will compromise in order to have plexes. Ticket prices will see a rise but not more than infl ation, probably lesser and the average might also be pushed higher for the 5-6 tentpole movies in their opening week.

Also, as we know the growth story

The future trends in

cinema, the growth curve and its many

logistics as explained by

Amrita Pandey in this exclusive

column

THE GROWTH STORY WILL HOLD

W on movies is not all being written at the theatres only. Every month, we see one new revenue stream and/or one new market is opening up in the world for Indian movies. Not all of these are scalable, however once you aggregate that, it really all adds up, you monetise your movie catalog that is great growth for these new markets or viewer base. Outside of movie theatres, we are mainly a B2B business, we see that changing for Indian movies as our audience gets connected on high speeds and the habit of paying for content grows across devices, services, apps and platforms. When our home video business declined, we did see an immediate translation to EST and VOD revenues, as other matured markets have seen. We see this changing. This is one business where inventory becomes more valuable with each growing year.

The International market is the next corner stone for Indian cinema - and it is not going to be an overnight wonder but it is moving in that direction. Over the past decade, international revenues on the right movies have grown by 100% and we see this trend continuing.

Amid these trends, what can slow down the growth is: a) disproportionate spend on marketing which can skew the economics and put undue pressure on the recovery of cost and profi t of each movie; b) the present skew in costs for most of our movies is very talent skewed and globally it is limited to 25% and in India it reaches 50% and sometimes more - and that can hurt the overall eco-system and not allow all players to withstand and in the maturing phase of the industry – and this may slow down growth. The success of high concept (not necessarily big star) movies and how they have engaged audiences last year has been an encouraging trend and we see it continuing this year too.

Amrita Pandey(VP and Head, Marketing & Distribution- Studios, Disney India)

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