Showing posts with label Economics of Entertainment. Show all posts
Showing posts with label Economics of Entertainment. Show all posts

February 3, 2015

Lessons from Single-Screen Theatre Not Learnt by PVR Multiplex

Recently I went to PVR Cinemas at Banjara Hills to see "Pataas". After paying Rs.150/- for executive class for the 11pm show, I felt cheated when the theatre management switched off the AC in a houseful hall packed with a movie-crazy audience. This is what PVR can do. I went with a friend from Mumbai and he was also feeling restless and said this is quite common for PVR to switch off AC especially for South Indian movies. He says they dare not do this for Hindi films, it happens only for South Indian films. South-Indian or North-Indian, I have never understood the rationale for cutting costs by switching off AC  - it is the most annoying way to control your costs. It does two things - it cuts your cinema experience as a viewer by 75 per cent and then, antagonises you against the multiplex. Want proof? Ask all the cinema hall owners maintaining single-screen theatres in Hyderabad and Secunderabad - they are all  abegging- waiting for the quality-conscious viewer who moved on to multiplexes. What happened to the halls which shut down? Many of them didn't have money to upgrade the single-screen theatres to multiplex because their occupancy fell, lease rentals got frozen in time and patronage from regular viewers dwindled. I remember Sangeet, Venkataramana, Sangam, Saptagiri, Deepak, Basant, Kumar - most of them used to cut corners with AC. 

The last time I went to Sangeet theatre was for "Lagaan". In the film, Bhuvan was learning cricket from the English Memsahib and a cute romance was building up in the air. But my mind  turned to the AC switched off. Years later, the owners of Sangeet approached me for a Rs.18 crore loan to build a multiplex in the same premises. They waited for nearly ten years before getting the funds to rebuild a world-class multiplex now. Your best source of funds and private equity is your customer - not the banker or the government. If you are the owner of the theatre, would you like your family members to sweat it out when they are watching a film in your own theatre? That experience at Sangeet hardened me; I vowed never to step inside Sangeet again. Likewise, I like to think, many would have given Sangeet a miss - reasons for an early shut down of an iconic theatre.  There are still arrogant single-screen owners who treat their customers( (viewers) shabbily. They will pay a price one day. The latest example is Venkataramana and Padmavathi theatres in Kachiguda. About a decade back, I went with my family to watch "The Legend of Bhagat Singh". It had a feverish screenplay, rousing performances and mesmerising music by AR Rahman. The climax song was playing on with extra sound "Mujhe Rangggg Deeeee Eeeeee Eeee Eeeee Eeeeee" and we were about to cry. But we didn't know where the tears were coming from - my family looked at each other as we wanted to empathise with the hanging of Bhagat Singh amidst Rahman's patriotic jingle. We were sweating actually. Those were false tears but for a good cause! I vowed to teach Venkataramana theatre management a hard lesson in customer experience - they cut the AC again after interval. I collected the ticket foils and dashed off a letter to "Times of India", after it got published. I attached a photocopy of the letter and dashed off a letter to The Commissioner of Police that most theatres especially in RTC X Roads and Kachiguda were not keeping the AC on. I was told, for the nth time that AC means air-cooled not air-conditioned. I told the representative in police HQ that I was paying for continuous supply of cool air. The Commissariat promised action. I went back with hope. Lo! and behold, the ensuing weekend saw simultaneous raids in all the theatres I complained against  - for errant AC supply.  I felt elated and satisfied that police listens and punishes the culprits. It gave me confidence to take on issues before an RTI Act came into being. But Venkataramana theatre management went back to old ways - with adhoc car parking and wishy-washy AC. After many years, they are facing the heat of competition that will eventually wipe them out - INOX Kachiguda is grabbing segments in Sec A and Sec B audiences in the most thickly-populated and film-crazy belt in the twin cities. Occupancy is down and dwindling. 


Do I need to drum up more examples of why being stingy with facets of customer experience  never helped? On the other hand, look at the success examples which never took its audience for granted. They grew and retained loyalty, and with help from sound Financial Management  either reinvented their models or turned profitable. Examples, Tivoli, Shanti, Sudarshan 70mm. It doesn't take long for a crappy-valued promoter like PVR Cinema to go the way of those who shut shop because of giving sub-optimal experience to their patrons. Love your patrons or be prepared to shit bricks one day, PVR.

#Single-screen #Multiplexes #Entertainment #PVRMultiplex #AirConditioninginCinema #MovieReviews #TheatresinHyderabad #TheatresinTwinCities 

February 19, 2012

The Economics of Movie Industry

Lets be honest about it. Even though "Businessman" is a hit, it is helpful to understand the context and the scenario emerging in Tollywood. I am no blind fan of any superstar or megastar but would like to take facts headlong and not have sentimental leanings. What is an industry hit? What is a superhit? These definitions easily get smudged. An industry hit means a movie that has made money for the producers and the distributtors but not liked overall by the public. If the public like the movie unanimously, then its a superhit. By all counts, "Businessman" is an industry hit but whether it is a superhit - it is yet to prove. Which is why, despite liking the movie, what I am surprised is when Film heroes give interviews on every channel and every day more regularly than newsreaders in order to make the public believe that it is a superhit. That, I am telling, is an unhealthy trend.


Something similar to what Superstar Krishna did many years ago. When it is becoming clear that Natasekhara Krishna was not likely to get a best actor award in any awards, and there was a title "Superstar" poll in a filmy magazine called "Jyotichitra" (now defunct), all the fans of the matinee idol - about five lakh copies of the magazine - were bought and everybody unanimously voted for Krishna as the only Superstar. I remember this distinctly as it happened during the time I was growing up on movies. Consequently, Krishna was voted "Superstar" and the title became a permanent prefix to an actor who despite his goodness and discipline may have never won an award for best actor. The ongoing saga of superstars vying for the next top slot is similar to that in scale and influence. By drumming up that a movie is a hit, nigh, superhit, they are trying to influence similar type of verdicts- by painting the town red with records, getting guys like RGV to drool over the movie etc. This is not a healthy trend.

Now lets come to the topic of number of prints and collections commensurate with them - are they enough? This is the question everybody is asking. Here I have a diferent take. Yes, collections have definitely undergone a sea change. It is not enough for a movie to run for 50 days or even a month to make money. This is because, cinema prints have also got the benefit of technology. Today, there are broadly, two types of cinema prints - UFO Cube format and the regular print. One format which runs on hard-disk equipment (like a CD Player projector) which is aired on both old-world theatres and multiplexes like Prasads at a cost of Rs.10,000 per week. That means, the same equipment can be used around RTC theaters, Kukatpaly theaters, etc. at a staggeringly low cost. The other format of the print costs less than Rs.50,000. So, gone are the days when a single print used to cost Rs.5 lacs or even Rs.3 or 2 lacs apiece. So, technically, if a film is released with 2000 prints, it is correct to assume that the cost of prints are Rs.12 crores. (2000 *6 lacs each). So, let it be abundantly clear that a film print is no longer exorbitantly higher which can deter a distributor from making more available to an area. Now, I come to the point of the movie's economics and the costs of distrbuting versus bidding costs. You can make helluva money on a movie with more prints and it is not necessary to make it run for 50 days or so. So collections do matter because film print costs have more or less become a lower notional almost variable cost. The only point I want to make is dont chase records and dont tom-tom about the collections in the same breadthy. Agreed, by tomorrow Republic Day, most of the distributors in some areas will make 100% of their bidding amounts from "Businessman" but think everybody has made money. The higher you bid, the more you stand to lose if you dont work out the economics well. The trick in distribution lies in bidding well and not get carried away. Once you bid well, you have the technology to recover the money faster. For example, Kukatpally and Dislukhanagar distributors have made their money almost but UK distributors have lost money in "Businessman" because of over-the-board bidding. But I hope you appreciate the nuances of distribution and the follies of records.

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