FILM EXHIBITION

• Single Screens

• Multiplex Screens (apprx)

- PVR + Cinemax 408

- Inox + Fame 296

- Big Cinemas 258

- Cinepolis 84

- Fun Cinemas 78

- Satyam Cineplex 40

- Wave Cinemas 32

- Movie Time 35

- Others 647

Total 1800

Cinemas

State / Union Territory Single

screens

Andhra Pradesh 2809

Andaman & Nicobar 1

Arunachal Pradesh 1

Assam 82

Bihar 269

Chandigarh 6

Dadra & Nagar Haveli 2

Delhi/New Delhi 80

Goa, Daman & Diu 10

Gujarat 291

Haryana 106

Himachal Pradesh 10

Jammu & Kashmir 267

Jharkhand 90

Karnataka 950

Kerala 1015

Madhya Pradesh 201

State / Union Territory Single

screens

Manipur 10

Meghalaya 7

Mizoram 2

Nagaland 4

Orissa 116

Pondicherry (U.T.) 25

Punjab 175

Rajasthan 133

Sikkim 2

Tamil Nadu 1546

Tripura 1

Uttar Pradesh 970

Uttaranchal 46

Vidharbha (Maharashtra) 106

West Bengal 330

Maharashtra (except Vidarbha) 504

TOTAL 10167

Source:- Film Federation of India

Film Exhibition Facts

• Apprx. 1500 -1600 movies released per year in India

• 3.5 billion movie tickets sold annually

• Domestic theatrical window for a super hit film has reduced from 8-10 weeks to 5-6 weeks

• Apprx. 12 films struggle to get screen space every week

• Commercial success ratio for films is apprx. 15 -17 %

• 60-80 % of theatrical collections accrue in 1st week of release.

• India is under screened and under priced market

• Increase in no. of International films released every year

• Multiplexes are a boon for offbeat cinema for which multiplexes account for 50% of box-office revenue.

• Indian movies now distributed in new pockets of China,Taiwan, South-Korea, Israel,Western Eurpoe and Latin America.

• Peak period :- Festive season and extended holidays

• Off season :- Ramzan, exams, cricket matches

Screen density per million population

• India - 8

• USA - 117

• China - 31

• Europe - 81

Multiplex Screen density per million population

8

8

7

21

19

13

23

0 5 10 15 20 25

Kolkata

Chennai

Hyderabad

Bangalore

Ahmedabad

Delhi

Mumbai

Screen additions in 2013

Total Screens added -150-200

• PVR- 60

• Inox- 21

• Satyam Cineplex- 12

• 18-20 % screens in India are multiplexes compared to 85-90%

internationally.

• Industry is shifting from 1000 seater theatres to 150-200 seater.

Hindi15%

Tamil13%

Telugu13%

Kanada9%

Malayalam6%

Marathi7%

Bengali9%

Bhojpuri5%

Hollywood14%

Others9%

Share of film releases in India

*Others includes : Assameese,Oriya,Gujarati,Punjabi,etc

Avg. No. of screens for Hindi film theatrical release

Big Budget Medium Budget

Market 2010 2013 2010 2013

Domestic 1200 3000-3500 600 1500

Overseas 250 400-500 100-120 100-120

Note:- 90% prints are released in digital format and 10% are physical prints.

Increase in no. of screens for theatrical release

Movie Year of Release

No. of screens Growth

Hum AapkeHai Kaun

1994 500

3 Idiots 2009 1000 2x in 15 yrs

Ek Tha Tiger 2012 3000 3x in 3 yrs

Dhoom 3 2013 4500 1.5x in 1 yr

Data for top 3 films at BO

Year 2008 2009 2010 2011 2012 -13

Avg. domestic prints 1020 980 1330 3000 3500

Share of 1st week collections

54% 54% 58% 78% 80%

Top Bollywood World Wide Grossers(Source Box Office India)

Year FilmWorldwide

GrossNo. of days for 100 crs mark

2009 3 Idiots 392 11

2010Dabangg 215 10

My Name Is Khan 200 NA

2011

Bodyguard 253 7

Ra.One 240 10

Don 2 233 11

2012

Rowdy Rathore 201 11

Ek Tha Tiger 319 5

Jab Tak Hai Jaan 248 10

Dabangg 2 266 6

2013

Yeh Jawaani HaiDeewani

309 7

Chennai Express 395 3

Krrish 3 (all versions) 321 4

Dhoom 3 531 3

Note: Endhiran / Robot (2010) grossed apprx. 400+ crs worldwide

No. of bollywood films crossing 100 crs

Year No.

2008 1

2009 1

2010 2

2011 5

2012 9

Top Bollywood Grossers Overseas

Movie USD Million

Dhoom 3 26.64

3 Idiots 25

My Name is Khan 23

Chennai Express 19

Jab Tak Hai Jaan 16

Don 2 15

Kabhi Alvida Na Kehna 12

Ek Tha Tiger 11

Yeh Jawani Hai Deewani 11

Om Shanti Om 10

Ra One 10

Overseas Revenue split for Bollywoodmovies (2012)

• UK- 20%

• USA- 20 %

• Middle East- 30%

• Australia & New Zealand- 28%

• Rest of the World- 2%

Note:

For top 10 Tamil Films - 75% of overseas revenues were generated from Malaysia alone in 2012.

Case Study –3 Idiots’spopularity in international markets

3 Idiots

- 29 weeks theatrical run in Taiwan collecting Rs 3 crores

- Released with sub-titles in 230 screens in South Korea

- Released in Mandarin in China across 900 screens

- Film had USD 1.5 million spend on print and publicity expenses in China which is equivalent to that of a Hollywood release.

Return on investmentMovie Year of

ReleaseBudget

(Crs)World Wide Theatrical

collection (Crs)

Return on investment

(ROI ) %

Bheja Fry 2007 1.5 12.6 739

Aashiqui 2 2013 15 109.4 629

Lage RahoMunna Bhai

2006 19 123.2 548

Vivah 2006 8 49.5 518

Vicky Donor 2012 10 61.3 513

MalamaalWeekly

2006 7 42.8 511

Taare ZameenPar

2007 15 87.6 484

3 Idiots 2009 69 349.7 472

Chak De India 2007 18 101.8 466

Jaane Tu YaJaane Na

2008 15 84.2 461

Top Hollywood Grossers in India (2012)

Film INR (Crs )

Amazing Spiderman (1236 screens)

80

The Avengers (1000 screens)

69

Skyfall 59

Life of Pi 56

The Dark Knight Rises 50

Mission Impossible 4 40

Harry Potter and the Deathly Hallows

36

Transformers Dark of the Moon 36

Pirates of the Carribean- On Stranger Tides

34

Fast Five 29

Top Hollywood Grossers in India (2013)

Film Screens GBO- INR (Crs )

Iron Man 3 1054 68

Fast & Furious 6 828 57

Man of Steel 706 37

Gravity 195 36

The Wolverine 710 28

G.I. Joe Retaliation 528 23

Thor 2- The Dark World 600 23

The Conjuring 128 22

World War Z 570 18

A Good Day to Die Hard 678 12

Source: FICCI Frames Report - 2014

Hollywood in Bollywood

• Share of Hollywood movies in Gross Indian BO collection was 8.5 % at Rs 950 crs

• English movies derive 35% of their revenues from dubbed versions

• Revenue split of Regional Market for Hollywood films:-

East India- 10%

West India-30%

South India- 35%

North India- 25%

• Revenue from 3D screens is 60% and 2D screens is 40%

Hollywood Studios performance in 2012

Studio No. of Releases Gross BO collection

Sony 12 217 crs

Disney 5 91 crs

Fox Star 11 165 crs

Warner Bros. 15 100 crs

Source: KPMG FICCI Report and Economic Times,Feb 2013

Regional Cinema Facts

• Tamil Blockbuster – ‘Thuppakki’ collected Rs 100 crs in 11 days

• Bengali Movie – ‘Challenge 2’ earned Rs 124 crs at Box Office

• Punjabi Blockbuster Jeene Mera Dil Luteya’s 45% revenue came from overseas market

• Punjabi Films Jatt and Juliet 2 grossed Rs 20 crs at Box Office

• 50% increase in releases of small budget movies in Tamil, Marathi and Bengali which are produced with a budget of less than Rs 2 crs

• Some movies are released in just 20-30 screens in 1st week and then grow to 60-70 screens in 2nd / 3rd week

• The growth of regional cinema is led by digitization, boost of multiplexes, emergence of new talent and organised funding

• The rise of regional channels has given boost to regional films for monetization of Cable & Satellite rights

• Regional films have longer theatrical windows and account for 1/3rd of multiplexes' box-office collection.

• Share of regional films have increased from 77% to 83% from 2008 to 2011

Regional Cinema Facts• Telugu Movies are star centric where as small budget Tamil, Marathi

and Malayalam movies which are based on native content do well at the box-office.

• These movies release in fewer screens initially but positive word of mouth leads to increase in screens with a run of 50 days in some cases

• Vishwaroopam and Arrambam collected Rs 200 crs and Rs 100 crrespectively

• Telugu film Attarintiki Daredi collected Rs 187 crs across 1200 screens with 100% occupancy across several screens

• Duniya Dari is the first marathi film to collect Rs 25 crs at box-office

• Regional cinema is heavily dependent on theatrical revenues which contribute 95-97 % of monetisation

• Bengali movie Rangbaaz collected Rs 75 lakhs on day 1

Ticket Pricing

Average Ticket Prices:

• Multiplex- Rs 175/-

• Single Screen- Rs 60/-

Price Controls

• In Tamil Nadu single screens can charge maximum Rs 50/-and multiplexes Rs 120/- depending upon set of facilities/quality of infrastructure

• In AP ticket rates in single screens are capped at Rs 60/-

• Average ticket prices have grown from Rs 150-160 in 2011 to Rs 168-175 in 2013 for multiplexes

Avg. Ticket Prices by Theatre

• High-end Multiplex – Rs 239/-

• Regular Multiplex – Rs127/-

• Single Screen – Rs 95/-

• Low end single screen – Rs 56/-

State Entertainment Tax Exceptions

Maharashtra 45% for tickets upto Rs 25049.5% for ticket s from Rs 251-350 /-

51.75 % for tickets from Rs 351-500 /-54% for tickets above Rs 501 /-

Marathi films are tax free

Delhi 20% --

Gujarat 20% --

Chandigarh 50% --

Haryana 30% --

Chattisgarh 30% --

Karnataka 40% Kannada films are tax free

Kerala 30% --

Madhya Pradesh 20% --

Himachal Pradesh, J&K, Rajasthan, Punjab

Tax Free --

Jharkhand Tax Free upto March 2013 Earlier it was 110%

Andhra Pradesh 20% 15% for Telugu Films.

Assam 15% for tickets less than Rs 20 /-20% for tickets more than Rs 20/-

Tamilnadu 15% Tamil films are tax free

Orissa 25%

Uttar Pradesh 30% for tickets upto Rs 1035% for ticket s from Rs 10-30

40% for tickets exceeding Rs 30

West Bengal 30% 2% for Bengali,Santhali and Nepali language films

Bihar 50%

Terms used for box-office collection

Term Explanation

Amount

(Rs)

GROSS BOX-

OFFICE1 crore tickets X average price - Rs 100/- 100 crs

NETT OR

NETT GROSS

= Gross BO collection - Entertainment tax

(Avg. 40% in India)60 crs

DISTRIBUTOR

SHARE

From nett collections, theatre owners deduct

their rent/share/profit as per agreed terms and

pay the balance amount to the distributor.

30 to 40 crs

PRODUCER’S

SHARE

Distributors deduct their Profit margin OR

Minimum Guarantee amount OR share as per

agreed terms and pay the balance amount to

the producer

25 to 30 crs

Programming strategy adopted by Exhibitors.

• Increased no. of shows during the opening weekend

• Non-conventional timings to suit local area audience or target audience

• Multi pricing strategy based on time of shows, location, film, etc

• Maintaining a perfect balance of genre, language, time of show and no. of shows, etc

Ticket Sales - 70%

F&B- 20%

Space Rentals &

Advertising- 10%

Apprx. revenue break-up for a multiplex

2013 2008

Theatrical85%

F&B10%

Advertising5%

Digital Cinema Exhibition

• Apprx 90 % screens in India are now digitized.

• Digitization helps wider release of films on Day 1

• Helps maintain security, track piracy and timely release of films.

• Reduces logistical exercise of managing physical prints

• Offers better scheduling flexibility to single screens which can screen multiple films on same day

• Helps increase revenue from advertising spots

• Digital cinema exhibition technology providers: UFO,RealImage, Qube, Scrabble Entertainment.

• Digital Print costs Rs 10,000/- against analog print cost Rs 50,000/- per print.

• Advertising revenue contributes close to 30% of total revenue of digital cinemas

Number of Digital Screens

• UFO Moviez - 3500

• Real Image - 2500

-Digital Cinema advertising market is close to Rs 140 crs.- Digital Cinema providers retain 70% revenue and 30% passed on to exhibitors

Multiplexes - Differentiation & Segmentation • Regular format (Multiplex)

4-6 screens

• Large Formats (Megaplex)

10-15 screens. Eg: Cinepolis

• Luxury Entertainment

VIP Screens & Lounge,180 degrees recliners, restaurant cum bar lounge, cafeteria,etc. Eg:- Big Cinema’s Ebony Lounge, PVR Dierector’s Cut

• Imax (Dome Format)

Differentiated cinema viewing experience

• Mass Entertainment (Value-Plexes)

Modern single screen cinemas targeting ‘Bottom of the Pyramid’ with value orientation Eg:- Nukkad Entertainment by United Media Works

Growth Drivers for Multiplexes:- Expansion to smaller cities- Increased releases of 3D films- Flexibility to program movies at different time slots- Innovative promotional & advertising strategies- Flexi-Pricing throughout the week and day .

Challenges for Multiplexes- Slowing mall market in big cities- Single screens offering better infra & services at affordable cost- Reduction of window from theatre to TV/ Home video- Increased cost of realty and operations.

Growth drivers for single screens- Regional cinema churning out good movies- Single screens converting into multiplexes or sprucing up their infrastructure, offering better picture quality, surround sound, parking space, better quality of food & beverages, etc- Re-emergence of mass action genre which is a crowd puller- Deployment of IT to ease billing , on- line booking ,etc- Digitisation of single screens which offers programming flexibility

Challenges for single screens

- Baggage of old staff which is not trained in customer service

- Regarded as non-transparent in their dealings (per show revenue is actually higher than that of multiplex screen)

- Regarded as hubs of piracy

- Competition from multiplexes offering low ticket rates for mid-week shows / morning shows

Key Trends• Multiplexes contribute 40-50% collections for most of the

movies.

• Consolidation happening in film exhibition space.

• Industry needs at least 30,000 more screens to be at par with other developed countries

• Entry of global players like Cinepolis

• Indian players foraying outside India- eg: Reliance setting up screens in US and Malaysia

• Regional expansion: Multiplex players are expanding to smaller cities like Latur, Madurai, Shimla, Bhiwadi, Surat, Bilaspur, Ujjain, etc with ticket prices between Rs 50-100/-

• No-frills modern cinemas in smaller towns- Eg NukkadEntertainment with ticket prices Rs 30 to 50/-.

• Hollywood and 3D content doing well in non-metros

Key trends

• Corporatisation is leading the industry to become prudent in producing movies. The pre-production of movies has become more structured with greater emphasis given to script, planning, budgeting and financing of movies.

• Many studios like YRF are moving away from ‘one man army’ to launching in house producers

• Production houses are forging alliances to co-produce and distribute movies. Eg: Dharma Production and Reliance Entertainment joined hands to market and distribute 4 films.

• Aamir Khan Productions also teamed up with Excel Entertainment to co-produce movies in future.

• 65 % audience in 1st week is youth under the age of 25. Family audiences walk in from 2nd week onwards based on word of mouth publicity

Key Trends• Consolidation in film exhibition space is leading to better

bargaining power of exhibitors

• Occupancy levels for multiplexes have risen fro 23-27 % in 2011 to 30% in 2013.

• Average ticket prices have grown from Rs 150-160 in 2011 to Rs 168-175 in 2013 for multiplexes

Case Study

• Nukkad Entertainment

Challenges for film exhibition:

a) seasonality

b) low screen density

c) low average ticket prices

d) reducing shelf life of movies

e) Obtaining a theatre operating license takes even six months in some cases

f) under reporting of ticket sales by single screens by 25-30%

Teams@work• Programming and Content

- content acquisition strategy, scheduling of shows ,pricing of tickets, payments to producer/distributor, etc

• Marketing & Sales

- advertising, sales promotion and publicity, events, combo packs,tie-ups,corporate sales,etc

• Operations

- day to day operational management of multiplex, ticketing operations, house keeping, vendor management,etc

• Business development

- opening new screens, expansion in new cities/towns, appointing franchisee partners,take-overs of single screens,etc