Inox to incur Capex of Rs 240 cr on adding new screens in FY20
MUMBAI: Multiplex chain Inox Leisure has a Capex plan of Rs 240 crore in FY20 to add new screens. The company plans to launch 80 screens this fiscal with an investment of Rs. 2.7-3 crore per screen.
“The investment being made is Rs. 2.7-3 crore a screen which implies give or take a capex of Rs. 240 crore for the current fiscal,” Inox Leisure CEO Alok Tandon told TelevisionPost.com. He further stated that Inox looks at a breakeven of anywhere between four to five years for new screens.
In the previous fiscal, the company had launched 85 screens. The aim is to open more screens and get to 1000 screens over three to four years. Currently, the number is slightly less than 600 screens.
“We just have eight screens per million and this includes single screens. But in multiplexes it only 2.5-3 multiplexes per million. So the growth opportunities are humongous,” Tandon added.
Inox, he said, is a pan-India player with a presence in 68 cities. “And we want to keep it that way and keep on growing whether it is a tier-one or a tier-two city. Last year we opened 85 screens which was a record. This year we are looking at 80 screens and are on target to get there.”
He said that the opportunity to grow exists everywhere whether it is Metro, non-Metro, tier three, all parts of India. But for him, the big challenge is that there are not enough malls.
“The development of malls is an issue. We are part of a mall. Malls and multiplexes complement each other. The sooner malls come up the better for us. Without a mall, you cannot have a cinema. For that you need roads, land,” he noted.
As part of its aggressive expansion plans, the company has launched ‘Megaplex’, which it said is the world’s first multiplex with the maximum number of movie viewing formats and experiences at Inorbit Mall Malad in Mumbai.
The 11-screen complex built over 60,000 Square Feet has a total seating capacity of 1586 seats. Inox said that this is Mumbai City’s largest multiplex. Megaplex, with six experiential cinema formats, and has the capability to screen 60 shows and entertain an audience size of 6000 guests every day.
He reiterated Inox’s focus on growing the three pillars of luxury, technology, and service. “Whether I am in a tier-one or a tier-three city it is aspirational. I will always use good material for amenities like seating. Every Inox property has to be aspirational for the guest who comes in regardless of the ticket price.”
He said that Inox operates at a price range of Rs. 50 – 1500. Its average ticket price is Rs. 200. “All the properties that we will open will be the best cinema experience that the place has seen. We show nearly 2000 titles a year. I don’t think that our ticket pricing is really that expensive. I think that it is pretty affordable for the kind of facilities that we provide. Ticket pricing depends on the cost of the property and the paying propensity of the people.”
He added that Inox passed on every reduction in GST to the consumer. The government had reduced GST on multiplexes from 28% to 18% for tickets over Rs. 100 and from 18% to 12% for tickets below Rs. 100.
For Inox, the South is a challenge due to price control on tickets. Therefore, some of the technological features that exist in Inox’s multiplexes in a city like Mumbai will not exist in Tamil Nadu. “There is no free pricing over there. Having more capital intensive formats is a challenge.”
Talking about technological formats like ScreenX, he said that it fits in with the company’s philosophy of giving something extra to guests. He said that most Hollywood movies come equipped with new technologies. He noted that local filmmakers would like to give more to consumers. “Indian filmmakers are familiar with these technologies. The way it works is that a technology company talks to movie producers about having a movie in a particular format.”
He added that Inox is aggressive about Imax and has five properties across the country. Enough releases are happening in that format.
In terms of revenue, he said that 60-65% comes from Hindi movies, 15-20% depending on the quarter is English and the rest is regional at 15-20%. This year the expectation is that over 35 Hindi films will make over Rs. 50 crore at the box office. Three years back the number was 22. “This tells you that people are coming to the cinema more often. The stories are being told in a very different way.“
When asked about the impact of the economic slowdown, he said that it boils down to the quality of content. “It has been amazingly good from ‘Avengers’ to ‘Joker’ to ‘Kabir Singh’ to ‘War’.” He said that people like being seen in an Inox and like watching movies at Inox due to the quality of the cinematic experience. “We talk about an overall outing. Today people eat food at Inox while watching a movie at Inox. Earlier the trend was just popcorn and Coke with people eating a meal before or after the movie. We changed that. Our menu is curated by Vicky Ratnani and there are 250 items on it.”
Reminiscing about the early days of Inox starting out in 2002 in Pune, Inox Group director Siddharth Jain said that the mall culture at that time was not present in the country. “We set up our own mall of 100,000 square feet. Now we are in 598 screens across 68 cities. We today do 3000 shows a day have over 70 million patrons annually and sell 140,000 seats out of 500,000. So we have a long way to go. Inox is about breaking barriers and building trust in the process. We have 10,000 employees. We work with several technological partners including Dolby, JBL, Samsung, GDC. The aim is to make Inox an experience-driven destination. We do experiential marketing initiatives with schools for films like ‘Super 30’ and ‘Mission Mangal’.”
He added that Inox has always focused on technology and back in 2011-2012 had spent Rs. 120 crore converting projectors to digital 2K which he said was the first leap of technology. It went 100% digital on 300 screens. “We are not driven by how much to spend. We are driven by what the audience asks for and what we want to offer. Money is not the thing that drives us. It depends on the format and guest satisfaction.”
He also said that partnering with single screen operators for many years to convert into multi-screens is also a focus area as long as the operator has the ability on the regulatory side and the financial muscle. He called this a win-win situation for everybody as the single screen people just now cannot afford to modernize their cinemas.
Talking about Megaplex, he said that the aim is to make a tourist attraction for anybody visiting the city. “We want to make it in the list of top 10 things to do in Mumbai. As the multiplex with the largest assortment of cinema formats in the world, Megaplex solidifies Inox’s position as a force in the global cinema business.”
He also said that the 11 screens will allow it to cast about 60 shows and entertain about 6000 guests in a day. “As a cornerstone of our ‘experience’ strategy, Megaplex would strengthen our bond with our patrons, while offering them grand and global formats, tantalizing dining options and above all, happy memories.”
Inspired by its brand proposition of ‘LIVE the MOVIE’, Inox created this experience-driven entertainment destination, which potentially will become the most popular multiplex in the country in the times to come. Designed to deliver lifestyle experiences, the Megaplex will stand as an epitome of ‘Luxury’, ‘Service’ and ‘Technology’, fulfilling the cinema needs of viewers of all age groups.