From Shot to Screen: Cinema Exhibition Business in India

Churning out nearly 1,000 films a year, the Indian film industry is the largest in the world. Now, aided by technological advancements, the industry is set to take a further leap - across production, exhibition and marketing. Adding momentum to the industry's growth, several film exhibition companies have launched their IPOs and have gained tremendous response too. The session on 'Cinema Exhibition Business in India' saw a spirited discussion on the general health of the cinema exhibition business in the country. .

Glenn Kennel, Director of Technology Development, Texas Instruments, spoke on worldwide trends in digital cinema. With so much growth happening in the entertainment sector - not just in India but in international markets as well - he stated that 2006 would be the year of digital cinema. .

"There are many prerequisites for the market to adopt digital cinema, like an agreement by studios to release digitally formatted movies, need of a business model that shares the costs between studios and exhibitors according to the benefits, and the need for systems to deliver great picture quality, reliability and security. And as a good start, major Hollywood studios have committed to release their movies worldwide in the digital format," said Kennel. .

However, there is a strong need for open and global standards that stress on distribution efficiency and security. To address the quality need, Texas Instruments has developed DLP cinema techniques and instruments. Kennel added, "Till March 2006, the count of DLP cinemas was 1,195, of which 274 were in the Asian region, 579 in the Americas, and 342 in Europe. Currently, there are over 70 exhibitors in 30 countries who are on this digital platform and over 150 titles released by major Hollywood studios are in the digital format. There is a strong commitment by Hollywood studios that by end of 2006, 100 per cent of their movies will be digitally released." .

However, it will take some time for India to get on the digital platform, but as Kennel said, the opportunity is huge. .

Product placement in films is an upcoming trend, and it is also a legitimate and profitable source of revenue for films. Every large Hollywood film has on an average 30 to 32 brands in it. With this as the basis, it is interesting to look at what advertisers expect from cinema exhibitors in facilitating product placements. .

Speaking on product placements, especially from the advertiser's perspective, Atul Phadnis, Chief Evangelist, Media e2e, said, "Studies indicate that consumers are likely to react differently to content depending on where they consume it. Increasingly, it can be seen that product placements work but do cinema exhibitors play a role in it? Well, the cinema exhibitor can definitely provide an opportunity; provide an additional trigger by providing better ambience, good cinema quality and so on." .

Substantiating with statistics, he added, "'Passive' placement in films, along with additional trigger, leads to 191 per cent increase in brand awareness. Likewise, 'Active' placement plus additional triggers lead to 17 per cent increase and hyperactive placement and additional trigger leads to 53 per cent increase in brand awareness. To measure the quality of placement, we have launched iTVX 'Q–Ratio' (or Quality Ratio), which measures the quality of the placement and hence, the value deserved by it. The iTVX 'Q-Ratio' is based on 50 key variables about the placement." .

The future lay in integrating the message in the content, he contended, reasoning that the consumer could not choose to escape the embedded messages. .

"A new digital system in place will allow the film marketer to change advertisers depending on where the film is played. For example, when the film is played in theatres it can show a different brand, and change the advertiser when the film is telecast on cable. Thus, there will be facilitation of digital postproduction product placement or virtual product placement. To give impetus to the entire format, the exhibitors should be kept informed and forewarned of the change on advertisers," said Phadnis. .

Fighting a rather lonely battle, Nestor D'souza, President, Cinematograph Exhibitors Association of India, spoke on 'Can single screen theatres be competitive in the present environment?' He said, "The single screens have always been in existence and will always be. We will fight the battle and we will rise out of the ashes like the Phoenix." .

Citing excellent locations as the single screen's USP, D'souza said that the exhibitor should leverage this. "The reason why single screens are in the position as they are today is because exhibitors did not look at cinema as a leisure industry and thus, now introspection is required. We can create these single screens into family entertainment centres (still keeping the prices low than multiplex prices) to leverage the value of the property. In other words, there is a serious need for reinvention and a need to look at the property in a new light. The mindset has to change, and strategic alliances should be looked at as they are the need of the hour." .

Rajnish Wahi, Chief Officer, Business Development, E-City Entertainment (India) Pvt Ltd, shared insights on the challenges in developing cinema complexes in India, and the points to look out for while selecting the cinema exhibition site. He also stressed on the need to maintain relationships with developers. .

In a relatively theoretical presentation, Mahesh Kumar Bhagchandka, Chairman, M2K Entertainment Pvt Ltd, made a presentation on multiplexes in malls versus stand alone entities, interaction between a mall and multiplex and retailer benefits, and how important mall management is to the multiplex. As the moderator of the session, Shravan Shroff, Director, Shringar Cinemas, reiterated that for digital cinemas to grow in the country - as they will - the exhibitor and the distributor would have to strike a middle path, and agree to each other's terms. .

The journey from shot to screen has never been as eventful as it is today.