With out-of-the-box thinking, multiplexes are finally getting the bigger picture right

The multiplex ecosystem in India has undergone a remarkable transformation over the past few years, reflecting changes in consumer behaviour, technological advancements, and industry dynamics. In a deep dive into India’s multiplex ecosystem, Adgully seeks to understand the factors driving this industry in the post-pandemic times, how consumer preferences have changed, the potential as well as the challenges.

Part 1 of this report yesterday dwelled on the evolution of multiplexes in India, The great Pandemic disruption, Enhancements in the Multiplex ecosystem, how the PVR-INOX merger has been a game changer, and the impact of OTT platforms.

Also read:

Revisiting the Multiplex ecosystem – What will it take to revive the ent juggernaut?

Delving into consumer preferences

With the evolution of the multiplex ecosystem, the demands and preferences of consumers have also evolved.

Sanjeev Kumar Bijli, Executive Director, PVR INOX Ltd, elaborated, “The pandemic resulted in an easy access to abundant content available on digital platforms, encouraging viewers to explore a wider range of genres and languages. Movie audiences have become more language agnostic, leading to an increase in the production and promotion of pan-Indian films with dubbed versions and subtitles which are making a significant impact on a pan-India scale.”

A thriving economy, complemented by rising per capita income is leading people to seek enhanced out-of-home leisure activities and multiplexes with their diverse offerings, become an attractive destination for individuals to elevate their entertainment experiences. PVR INOX is looking at increasing the current 14% share of premium formats to 20% in the years to come. These include IMAX, 4DX, ScreenX, Director’s Cut, ICE, Insignia, MX4D, Onyx, LUXE or last row recliners that are being perceived as aspirational. Multiplexes are experiencing a notable rise in the consumption and spending on food and beverages. 

Another interesting consumer trend that is emerging is on the F&B front. PVR INOX’s F&B revenue in FY’23 was Rs 1,618 crore, making it the country’s fifth largest QSR brand. The spend per head in FY’23 grew to Rs 128 from Rs 124 in the previous year. This is attributed to the introduction of fresh concepts and appealing offerings on the menu, underscoring that consumers view movie-going as a comprehensive entertainment experience that includes food and beverages.

Devang Sampat, CEO, Cinépolis India, noted that Indian consumers are now preferring more quality content, proven by the success of small budget yet critically acclaimed movies like ‘The Kashmir Files’ and ‘The Kerala Stories’ in the recent years. “That said, the charm of big budget commercial movies still exists, which was proven by multiple successes in 2023 like ‘Pathaan’, ‘Gadar 2’, ‘Animal’ and ‘Jawan’. The frequency of visiting cinemas is gradually going back to pre-pandemic levels and people are spending on experiences provided by differentiated format like IMAX or 4DX,” Sampat pointed out.

According to Rahul Puri, Managing Director, MuktaA2 Cinemas, “Consumer preferences are evolving towards more immersive experiences, convenience, and value-added services like in-cinema dining, along with special celebration and customised services for special celebrations/ occasions. Also, consumers are price sensitive, so there is need to ensure that the pricing model for different films are planned in a way to have a pull factor to come to the cinemas to enjoy the movies.”

Ankur Roongta, MD, Roongta Cinemas, too, agreed that consumer preferences and behaviours within the Indian multiplex market have been evolving in response to various factors, including changing lifestyles, technological advancements, and shifts in content consumption habits.

Some insights into these evolving trends are preference for premium experiences, diversification of content preferences, shift towards digital ticketing and convenience, demand for family-friendly and social experiences, safety and hygiene considerations, embrace of cross-platform content consumption. Indian consumers are increasingly consuming content across multiple platforms, including theatres, streaming services, and television. Multiplexes are adapting to this trend by forming partnerships with streaming platforms, offering exclusive content, and exploring innovative distribution models such as simultaneous releases.

Roongta further said, “Multiplexes that are able to effectively respond to these evolving trends are likely to succeed in attracting and retaining customers in the competitive Indian cinema landscape.”

Reinvention of multiplexes

After complete shutdown during the pandemic period, multiplexes have been struggling to draw back cinegoers to the theatres in the post-pandemic times. This has led multiplexes to reinvent themselves to be viable businesses in a changed entertainment landscape.

PVR INOX’s Bijli disagreed that footfalls have decreased since the pandemic. He said, “It was an aberration which is well behind us.” While stating tha footfalls grew by 6% in 2023 as compared to 2022, Bijli admitted that they were marginally below the pre-pandemic level (2019). “However, Q2 FY’23 was the best every quarter of all time for PVR INOX and industry in terms of admissions on account of record-breaking performance of the Hindi box office – ‘Jawan’ and ‘Gadar 2’; ‘Oppenheimer’ and ‘Mission Impossible: Dead Reckoning Part 1’ in Hollywood; and regional successes of ‘Jailer’ (Tamil), ‘Baipan Bhaari Deva’ (Marathi) and ‘Carry on Jatta 3’ (Punjabi),” he pointed out.

As far as reinvention of multiplexes is concerned, Bijli noted, “Multiplexes are diversifying their content offerings beyond mainstream films. They now showcase independent and foreign language movies along with live events such as concerts and sporting spectacles. This diversification appeals to a broader audience, driving the demand for multiplex experiences. For instance, at PVR INOX to get newer audiences into cinemas, it re-releases retro films during festivals, conducts live screenings of ICC Cricket Tournaments, international music concerts, etc. We also screened events of national importance, such as the Ram Mandir inauguration and the Republic Day parade, making them accessible to a broad audience.”

Further sharing about PVR INOX’s newer initiatives, he said, “One massive footfall-focused initiative is the introduction of the Passport program. In October 2023, we launched our weekday cinema subscription plan, allowing subscribers to watch up to 10 movies per month for just Rs 699. It targeted three significant target groups – students, housewives and senior citizens, who have more leisure time on weekdays, to give them the opportunity to explore diverse genres and films.” 

PVR INOX also launched 30-minute trailers at Re 1 from April 7, 2023, for the first time in the world, to give movie buffs a feel of upcoming movies on the big screen and re-ignite their love for watching movies in theatres. “We saw footfalls increasing on account of this initiative,” claimed Bijli.

Speaking on how MuktaA2 Cinemas is reinventing since the pandemic, Rahul Puri said, “Firstly, the production houses are working closely with the exhibition industry to understand and analyse the content preferences of the movie goers. Content is king – if the movie is enjoyed by the guests, the footfalls and box office collections will be superlative. Secondly, having special celebrations like Cinema Lovers Day being celebrated on February 23, where attractive pricing for tickets and F&B is done, ensure that everyone celebrates their love for movies. Integration of online ticketing and contactless experiences have also contributed to attract and retain customers.”

Similarly, R Cinemas’ Roongta added here, “To attract footfalls that have decreased since the pandemic and retain audiences amidst increasing competition from alternative entertainment options, multiplexes are re-inventing themselves by prioritising safety, enhancing the overall customer experience, diversifying content offerings, embracing digital innovation, and fostering community engagement. Multiplexes are organising community engagement events, film festivals, and special screenings to foster a sense of community and attract audiences.”

Multiplex chains are also offering value-added services and loyalty programs to incentivise repeat visits and retain customers. This includes discounts on tickets and concessions, special offers for loyalty program members, birthday rewards, and exclusive access to screenings and events.

Pre-Covid Vs Post-Covid scenario

The Indian multiplex industry has evolved during three distinct periods: pre-pandemic, pandemic times, and the post-pandemic scenario. Roongta of R Cinemas shared his view on these three phases:

Pre-Pandemic Period (Before 2020): Before the pandemic, the Indian multiplex industry was experiencing steady growth and expansion. Major multiplex chains were expanding their presence across Tier 2 and Tier 3 cities, capitalising on the increasing demand for cinema entertainment.

There was a gradual trend towards diversification of content offerings, with multiplexes showcasing a wide range of films, including Bollywood, regional language films, independent cinema, and international releases. Ticket prices were on the rise, especially for premium formats and experiences, reflecting the willingness of consumers to pay for enhanced cinematic experiences.

Pandemic Times (2020-2021): The COVID-19 pandemic led to the closure of theatres across the country as part of lockdown measures to curb the spread of the virus. This resulted in a significant decline in revenue for multiplex chains. With theatres closed, there was a surge in demand for content on streaming platforms as people turned to at-home entertainment options. Multiplex chains faced financial strain due to prolonged closures and fixed operational costs. Many were forced to implement cost-cutting measures, including layoffs and salary reductions, to mitigate losses.

Post-Pandemic Scenario (2021 onwards): With the gradual easing of restrictions, multiplexes began reopening their doors to the public. However, the recovery has been gradual, with consumer confidence and footfall taking time to return to pre-pandemic levels.

The pandemic accelerated the adoption of hybrid release models, with some films opting for simultaneous theatrical and digital releases. Multiplexes have had to negotiate terms with studios and distributors to navigate these changes.

Multiplexes continue to prioritise safety and hygiene measures to reassure customers and rebuild trust. This includes ongoing sanitisation efforts, mandatory mask-wearing policies, and enhanced ventilation systems.

Multiplexes are now exploring innovative strategies to attract customers and drive revenue, including loyalty programs, special promotions, and exclusive screenings. There is also a renewed focus on enhancing the overall customer experience to differentiate from at-home entertainment options.

Picture abhi baaki hai doston

“The emergence of pan-India regional films has given rise to a new audience segment beyond South India, and this trend appears to be permanent,” noted Bijli of PVR INOX, adding “High-budget event films are currently dominating the box office, surpassing pre-COVID numbers significantly. For instance, in 2023 four movies – ‘Pathaan’, ‘Gadar 2’, ‘Jawan’ and ‘Animal’ – joined this elite club with Rs 500 crore NBOC, which was earlier achieved only by ‘Baahubali 2’.”

“Anticipations include a shift in Hindi movies towards more mass-oriented storytelling, the integration of additional VFX to elevate the cinematic experience, and an expansion into Tier 2 and 3 cities,” he further said.

Agreeing with Bijli, Sampat of Cinepolis said, “There’s going to be an increased focus on engaging customers via a long-term loyalty membership via continued benefits versus a one-off transaction. For instance, Cinépolis India has recently revamped its loyalty program, enriching the cinema-going experience for its devoted customers with a suite of exclusive benefits and enticing discounts. Club Cinépolis members enjoy a range of rewards, from earning fully redeemable points to experiential privileges such as invitations to special screenings and exclusive celebrity meet-and-greet events.”

Moreover, multiplexes are eyeing an expansion into all parts of the country, including metros as well as smaller cities, to make the cinema experience accessible to all types of consumers. “For instance, Cinépolis India’s expansion plans for 2024 and beyond strategically target key cities, including Delhi, Mumbai, Bhopal, Vadodara, Hyderabad, Kannur, Ranchi, Chennai, etc.,” he added.

Sharing some upcoming trends, Puri of MuktaA2 Cinemas said, “The exhibition industry is always on the lookout to constantly improvise and deliver to the guests what they want to watch. It could be delivering a phenomenal culinary experience to the guests, to creating an atmosphere inside the cinemas which focuses more on the experience as a whole for the guests to enjoy an outing with their family/ friends rather than just going to watch a movie.”

While challenges persist, the multiplex industry remains resilient, poised for growth amidst changing consumer dynamics and technological advancements. By embracing innovation, adapting to shifting market trends, and fostering strategic collaborations, multiplexes can continue to captivate audiences and redefine the cinematic experience in India. As the entertainment landscape evolves, multiplexes must remain agile and proactive to stay relevant and sustain their position as key players in the Indian entertainment industry.