How multiplex chains are looking at newer sources of revenue

The last financial year has been one of the best for the Indian film industry. The domestic box office collections, according to the recent KPMG media and entertainment report, grew by 14.7 per cent (Rs 129.4 billion), while the collections from the overseas market jumped by 16.1 per cent in financial year 2018/19.

As many as 191 million people visited multiplex chains of Inox, PVR and Cinepolis in FY19. The number continues to grow this year too. Alok Tandon, CEO, Inox Leisure, says that ad revenues in FY19 jumped to 10 per cent from the earlier 6 per cent. "The advertiser is getting a captive audience of his choice who do not have a remote in their hands. He is able to get their full attention."

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Devang Sampat, Deputy CEO, Cinepolis says that brands have started signing long-term deals with them. "Earlier brands used to do weekly deals and depending on the success of the film they used to extend, but now they are open to doing 12-week deals." Also, cinema advertising, as opposed to TV, is much cheaper. While a cinema ad is in the region of Rs 400 per show, a 10-second ad spot on a leading Hindi general entertainment channels costs in lakhs.

While the duration of cinema advertising hasn't increased (17-20 minutes per show), cinema advertising has become experiential. Tandon of Inox talks about Asian Paints, which apart from doing on-screen ads, recently displayed its shade card on the walls of Inox multiplexes. "We no longer have plain Jane activities on the screen. If there is an ad of a real estate company on the screen, we could have a model inside of the project. We are using a lot of interactive ways of showing the same product to the guest, making it more interesting for the guest."

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Along with advertising, the other big revenue churner for multiplexes have been events. With most of them offering luxury services, multiplexes have become a sought after destination for wine and dine parties, franchise meets, product launches and kids birthday parties. All multiplex chains have kids' theatres, which are often hired for birthday parties. The event business for Cinepolis, for example, has grown by over 20 per cent, says Sampat.

Most multiplex chains today, have an event management arm.

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