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Subcontinental multiplex operators’ luxury gamble may not pay off

Even as OTT platforms wage a war on traditional media consumption, multiplexes have largely remained unaffected, according to reports. In the September quarter of FY 2020, two of India’s top multiplexes, PVR Cinemas and INOX Leisure, reported footfalls of 2.93 crore and 1.90 crore, respectively — a 40% year-on-year growth in footfalls — according to a report by Emkay Research.

To leverage the growing footfalls, multiplexes are adding luxury and premium offerings to garner additional revenue. Ajay Shah, partner, EY, says while the regular screen formats bring in volumes for these players, luxury formats give them higher margins. “In a regular theatre, the average spend per head on food and beverage (F&B) is around `100; but in a luxury or premium setting, it is above `500.”

On average, most multiplexes earn 60% of their revenue from ticket prices, 25-30% from F&B and the rest from advertising.

On average, most multiplexes earn 60% of their revenue from ticket prices, 25-30% from F&B and the rest from advertising. In luxury formats though, the share of F&B is higher. PVR, for instance, gets 35% of its revenue from these properties, out of F&B. The average ticket price across these formats is also higher — in the range of `800-2,000.

Offering an experience
Multiplex players have launched luxury formats to tap a varied set of audiences. PVR Cinemas, for instance, currently has four screens under Director’s Cut, and 37 screens under PVR Gold, which also includes six screens under PVR Luxe launched in May last year. The company also has a members-only club PVR Home in Delhi.

“With the introduction of Luxe, we are reaching out to a wider segment of audiences who would love to watch cinema in a luxury setting. Director’s Cut is more of a uber-luxury cinema that offers a vast menu, hospitality, access to private dining, lounge, etc,” says Renuad Palliere, director, PVR Lanka.

INOX Leisure has a total of 52 luxury screens. Besides Insignia, it has opened a Megaplex in Mumbai, which houses luxury formats such as Kiddles, MX4D, ScreenX, IMAX and Samsung ONYX LED screen. Cinepolis has 11 luxury screens under Cinepolis VIP and has also introduced IMAX, 4DX, and Dolby ATMOS screens.
Aside from the top-notch technology and opulent setting, the other key attraction here is the food, with menus curated by celebrity chefs, butlers on call and
live kitchens.

“We have a menu crafted by masterchef Vicky Ratnani; we offer about 10-12 different cuisines with about 250 items on the menu,” says Alok Tandon, CEO, INOX Leisure…

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