Imagine getting into the exhibition business at a time when COVID-19 had ravaged the world and there was a question mark on whether the audiences would return to cinema halls. But that’s what MovieMax did and the risk paid off. When they originally entered this sector, they opened theatres under the brand name Cinemax. Their first cinema hall in Goregaon West, Mumbai opened on December 18, 1997, and surprised the audience. Many of them, for the first time, saw popcorn/cold drink bottle holders. When they screened Titanic, a violinist was hired who was seated in the foyer and who played the tunes of the film!
EXCLUSIVE: MovieMax CEO Ashish Kanakia reveals why Nagpur property has higher ATP and F&B prices than Mumbai cinemas; reveals SHOCKING stats on under-screened Indian market; shares his views on Singham Again vs Bhool Bhulaiyaa 3: “It’s always better to avoid a clash as the viewers get divided”
Circumstances forced them to exit the business in 2012. But now they are back as MovieMax and thriving. Earlier this week, at the Big Cine Expo 2024, they were given the award for the Fastest Growing Cinema Chain of the Year. Bollywood Hungama exclusively spoke with Ashish Kanakia, the dynamic CEO of Cineline India Ltd, about their second innings, their unique strategies, plans for the future and the box office.
Can you please tell us how many cities have MovieMax theatres and how many screens are operational at present?
We are present in 13 cities. In 2012, when we took a call to exit the business, we were a 15-year-old company and we had around 130 screens operational. But in 2 years since we re-entered the market, we have achieved around 76 screens.
MovieMax entered the business at a time when there was an unfounded fear that audiences would stop coming to cinemas in the post-COVID world. In such a scenario, what made the multiplex chain come back into this field?
When we sold Cinemax in 2012, we never imagined that the exhibition business would grow the way it did. The box office literally has grown exponentially since then and we were constantly tracking this industry. Our lease period with PVR was ending in March 2022. You can call it destiny because when this lease period ended, COVID also ended! This was the period when films like RRR, KGF – Chapter 2, etc. arrived in cinemas. God was on our side (smiles). As a result, we were able to amicably part ways with PVR and restart the business. We had given 23 screens on lease to the multiplex chain, which were our own properties.
India is a highly under-screened market. It has the highest number of film releases and it has the lowest number of screens per million population in the world. While India has 3,000 multiplex screens, China has 75,000-80,000 multiplex screens. Even the USA and the UK have 30,000 and 20,000 screens respectively. Moreover, India also has the highest footfall per screen in the world compared to any other country. All these factors motivated us to come back.
Our decision has been proven right. Today, we are very fast growing and also very profitable. We have also achieved one of the highest EBITDA margins in the country. We don’t have any legacy issues. We haven’t signed any properties at unreasonable terms. We also have a great return on the capital employed. Now all we hope for is that the box office should be revived.
The ticket rates at MovieMax theatres are reasonably priced and are not too high. Is this an intentional move?
Our tickets are priced as per the market that we operate in. For example, the average ticket price (ATP) in our Noida property is around Rs. 400-500. We are opening a new theatre in NCR called MovieMax Edition, which is a luxury format theatre. The ticket prices in this cinema hall would go up to Rs. 1000. Such rates will also be charged for the tickets in the other luxury format cinemas that we plan to open in future. But the bulk of our properties are in the mid-market segment. This is because there are quality players in the high ATP market and they are providing premium cinema experience at high ticket rates. The majority of the players are operating at an ATP of Rs. 250. There’s a whole gamut below the ATP of Rs. 250 that is available, which we want to target.
Even the food prices are cheap. However, the audience continues to complain that popcorn is too expensive in cinemas. Can the price of the popcorn come further down?
I completely understand where people are coming from. If you are travelling in an aeroplane, you’ll get cashew nuts for Rs. 400. Now why is it so expensive? That’s because fuel is expensive. Similarly, the film hire cost, that is the cost of getting the film to the cinema hall, is 46%. If I am bearing such a cost to my distributor, the only area where I can earn is F&B (food and beverage). I need to spend on rent, electricity, manpower, housekeeping, security, engineering, etc, to keep a cinema operational. Hence, the best way to make the model sustainable is by marking up the F&B prices. A normal-sized fast food restaurant will operate in a 1000 sq. ft. or 2000 sq. ft. of space. But my smallest cinema hall is spread over 30,000 sq. ft. I have to maintain such a large premise and its back office, parking area and also spend on the maintenance of the projection system, sound system, etc.
Is the strategy different when it comes to Tier 2 and 3 cities? Can a premium multiplex experience be expected in these centres?
Markets in tier 2 and 3 centres are highly under screened. The screen per million population is the lowest in all of these places as compared to tier 1 cities. Hence, our Nagpur cinema has a higher ATP than our theatres in Mumbai. Our Nagpur property’s food income is much higher than any of the cinemas in Mumbai because there’s very little competition and very few avenues for entertainment in these places. Hence, automatically there’s more demand than supply. As a result, they perform really well.
Can we expect a luxury format theatre in Mumbai as well?
Yes, of course. If there’s ever any opportunity available, we will also open a property. It depends on the market conditions.
Will MovieMax have an IMAX screen in future?
(Smiles) We may.
As per the press note, MovieMax plans to increase the number of screens to 100. Please tell us about your expansion plans.
We should have around 100 screens by next year. But at the same time, there’s no such target in our company. We have EBIDTA and profit targets more than the screen target. That’s our aim – to run a profitable company.
It’s disappointing when a single screen theatre gets shut permanently. Recently, Paradise cinema in Mahim, Mumbai had to down shutters. Will MovieMax like to acquire and run single screens or transform them into a multiplex?
Running a single screen has become even more challenging after COVID. It’s not a viable model in our opinion. Going ahead, you will see single screen theatres shutting down as the overhead costs are very high. You need multiple screens in order to increase the footfalls. Hence, we don’t intend to operate single screens. But we are engaged with the owners to convert their single screens into multiplexes.
While the national chains are strict about not showing films which arrive on an OTT platform before completing 8 weeks in cinemas, MovieMax has proved to be an exception. Your multiplex chain is one of the few ones that play South films and due to limited release, these movies work well in your properties…
We do believe that the eight-week window between theatrical and digital release is very important for the industry. We are in talks with the distributors and are asking them to honour the same. We are hopeful that we’ll gradually move towards it as it’s very important for the industry. At the end of the day, we – distributors, producers, exhibitors – all are partners to keep the cinema industry thriving. Hence, we are always in talks with the distributors on this aspect.
How do you look at the box office scenario this year?
The business in 2024 is roughly 10-15% lower than in 2023. The year has been challenging as we had the overhang of the elections while the slate of Hollywood was affected due to the writers’ strike. The producers and distributors are still figuring out what sort of content connects with the consumers. Until 2023, the pre-COVID content that was piled up got released. But now things are getting better. 2026, I believe, will be full of content planned properly for a post-COVID consumer.
Having said that, the bulk of exciting content is now being released in the next 5 months starting with Devara, Bhool Bhulaiyaa 3, Singham Again, Pushpa 2, Lahore 1947, etc.
Bhool Bhulaiyaa 3 will clash with Singham Again on Diwali. Single screens suffer the most in such collisions. MovieMax also runs certain single screens like the one in Goregaon West and Andheri East along with multiplexes. What are your views on clashes?
It’s always better to avoid a clash as the viewers get divided. The viewer has limited time to watch a film. As a result, he/she selects one film out of the two. However, the decision to clash or not to clash is with the distributor and producer. We have to respect their terms. Having said that, our wish would always be that there would be an amicable understanding with respect to the single screens for show division. It shouldn’t happen at the last minute, that is on the day of release or a day before release. It should be resolved earlier. Both parties should cooperate with each other in this regard.
The industry is divided over the Buy One Get One (BOGO) ticket-free offer. As a major exhibition player, what is your opinion on this scheme?
It gets a customer excited. Hence, it is a great strategy by the distributors, especially if it’s implemented after the film completes 4 or 5 weeks in cinemas.
More Pages: Bhool Bhulaiyaa 3 Box Office Collection
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