What is meant by multiplex ?

A multiplex is a movie theater complex with multiple screens, typically more than one screen within a single complex. They are usually housed in a specially designed building. Sometimes, an existing venue undergoes a renovation where the existing auditoriums are split into smaller ones, or more auditoriums are added in an extension or expansion of the building. The largest of these complexes can sit thousands of people and are sometimes referred to as a megaplex

2. State the major costs that occur in multiplex business.

But increasingly, theatre owners are realising that the culprit may lie closer home: High ticket prices. At a time when DVDs and home theatres are very affordable, how many families still consider the Rs 1,000-odd they spend for a weekend outing at any upmarket multiplex to be of good value? Very few, it seems.

Given the kind of investments they have pumped in, multiplex chains haven't been able to set cash registers ringing.

"If the phenomenon has to explode and multiplex owners sustain volumes across weekdays and weekends, then low-cost, no-frills options are the only way out,"says a Delhi-based multiplex operator.

It's a view echoed by former CEO of Inox Leisure, Shishir Baijal.

"It's only when you encompass the masses that the real multiplex revolution will happen. Large consumption centres, where ticket prices hover around Rs 40-50, hold tremendous potential,"he says.

But to cash in on that potential, multiplexes would need to bring down construction costs.

Today, it can take up to Rs 40-50 crores to set up a premium five-screen multiplex in a metro, while the same in a smaller town costs between Rs 10-15 crore, estimates GW Capital, a private equity firm.

But owners are now realising that if done right, a stripped down multiplex can be set up much cheaper. Typically, fit-out costs (cost of doing up the interiors) range anywhere between Rs 2 crore to Rs 2.75 crore per screen.

"Cutting down on the fancy stuff could bring down costs by half,"says Rajat Kumar, V-P (marketing) at DT Cinemas, which is toying with the idea of setting up low-cost variants in smaller cities, like or .

That is because a prominent location cannot be compromised. So, what is basic and what are the trimmings? Says Shravan Shroff, MD of Shringar Cinema, "You still need to pamper the customer.

A multiplex should be able to tell what adds value and what's superfluous."

PVR Cinemas is learnt to be exploring setting up air-cooled, budget multiplexes. Refusing to confirm this, PVR acknowledges the potential this segment holds.

"It's a big opportunity, given the huge appetite 's one billion population has for movies,"says Tushar Dhingra, PVR's V-P (marketing).

Despite the number of multiplexes, India still remains underscreened. Compare India's 12 screens per million to US's 112 screens per million people or Europe's 75 screens per million.

Which is probably why multiplexes, which have just opened up in smaller towns, continue to do roaring business.

Industry watchers say that like any other industry, as multiplexes evolve, coming years shall see segmentation or the emergence of multiple formats.

"In time, premium multiplexes, budget ones and even refurbished single-screen theatres will co-exist and cater to their own niche client-base,"says Vikram Nirula, who tracks media and entertainment at GW Capital.

For viewers, not only will it mean being able to pick the kind of movie they want to watch, but also the kind of theatre they want to watch it in. 3. Discuss the application of marketing mix concepts in service industry. The marketing mix is used to reach a target market and is often referred to as the "four Ps" of marketing: product, price, promotion, and place. Those selling a product must develop a product that meets the needs of the target market, set a price for the product, get it to a place where the consumers can buy it (distribute it), and inform the target market about it (promotion). A product is seen as an item that satisfies what a consumer in the target market needs or wants. It is a tangible good or an intangible service. The price is the amount a customer pays for the product. The price is very important as it determines the company's profit and hence, its survival. Promotion represents all of the methods of communication that a marketer may use to provide information to different parties about the product. Place refers to providing the product at a place which is convenient for consumers to access. Place is synonymous with distribution. After identifying a target market, your next step is developing and implementing amarketing program designed to reach it. This program involves a combination of tools called the marketing mix, often referred to as the "four Ps" of marketing: product, price, promotion, and place .

The Marketing Mix The 4 Ps of marketing. Product A product is seen as an item that satisfies what a consumer in the target market needs or wants. It is a tangible good or an intangible service. Intangible products are service-based like products in the tourism industry, the hotel industry and the financial industry. Tangible products are those that have an independent, physical existence. Typical examples of mass-produced, tangible objects are the car and the disposable razor. Every product is subject to a life-cycle including a growth phase, followed by a maturity phase, and finally an eventual period of decline as sales falls. Marketers must do careful research on how long the life-cycle of the product they are marketing is likely to be and focus their attention on different challenges that arise as the product moves through each stage. The marketer must also consider the product mix. Marketers can expand the current product mix by increasing a certain product line's depth or by increasing the number of product lines. Marketers should consider how to position the product, how to exploit the brand, how to exploit the company's resources, and how to configure the product mix so that each product complements others. The marketer must also consider product development strategies. Price The price is the amount a customer pays for the product. The price is very important as it determines the company's profit and hence, survival. Adjusting the price has a profound impact on the marketing strategy, as it will often affect the demand and sales as well. The marketer should set a price that complements the other elements of the marketing mix. When setting a price, the marketer must be aware of the customer's perceived value for the product. There are various strategies that can be applied when pricing a product like skimming and penetration pricing. Skimming means to price the product highly to increase profits. For example if you invent a new software which no one else has, you can skim the market because the customers are forced to buy from you until there is more competition. Penetration pricing can be applied when you want to enter a market and price your product lower than the perceived market price so that more people will buy it and this will increase your market share. Promotion Promotion represents all of the methods of communication that a marketer may use to provide information to different parties about the product. Promotion comprises elements such as advertising, public relations, personal selling and sales promotion. Advertising covers any communication that is paid for. This can be in the form of television commercials, radio and Internet advertisements or through print media and billboards. Public relations is where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Word-of-mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word-of-mouth momentum. Sales staff often play an important role in word-of- mouth and public relations. Place Place refers to providing the product at a place or places which is convenient for consumers to access it. Place is synonymous with distribution. Various strategies such as intensive distribution, selective distribution, exclusive distribution and franchising can be used by the marketer to complement the other aspects of the marketing mix.

State the reasons for developing shopping centres. Didnt find

6.What are the sources of revenue in multiplex theatres ? place of rental agreements, mostly in small towns. The theatre chain owners will share 10-15% of net ticket sales with the mall developers, according to these arrangements. “We are looking at managing our P&L (profit and loss) in a better manner and the revenue-sharing deals with mall owners is one measure to reduce cost,” said Nitin Sood, chief financial officer at PVR Ltd, which has 173 screens in 40 cinema halls across 24 cities. This model will lower a multiplex operator’s cost by nearly 20%, he said. A multiplex typically spends 13-15% on rent, 10% on employees, 15-20% on overheads, 6-7% on food and beverage, and another 30% on hiring the movies to be screened and towards sharing the revenue with producers and distributors, according to industry executives. “In lean months, fixed liability in terms of rents hurt our pockets. Therefore, in our upcoming property in Gulbarga ( Karnataka), we have signed a revenue-sharing deal with the developer,” said Jitendra Mehta, chief financial officer, Cinemax India Ltd. “While we are going slow in our pan-India, tier 2 and 3 expansion, our focus is in smaller towns in south (India).” Cinemax is negotiating a similar deal for two existing cinemas in , he added. Ticket sales contribute about 70% to a multiplex’s revenue, food and beverages contribute 20-22% and in-cinema advertising nearly 7%, according to industry executives. Theatre chain owners typically pay a fixed rent of Rs 5-20 lakh a month to mall developers, depending on the size of the multiplex and the region. But steep increases in rents in small cities and towns began eating into their revenues, forcing some multiplex operators to even shut their operations in some of these places. -promoted Big Cinemas, a division of Reliance MediaWorks Ltd, closed its theatres in Dewas and Shivpur in Madhya Pradesh and Udgir in , among a few others, owing to recent increases in rents. “The rents of these cinema halls were unviable. They accounted for almost 60% of our top line in these markets,” said a person familiar with the development at Big Cinemas. Fun Multiplex Pvt. Ltd, which operates theatres under the brand name and is run by Subhash Chandra’s Essel Group, too shut screens in Goa and Ghaziabad in Uttar Pradesh, among a few others. Confirming the development, Atul Goel, managing director, E-City Ventures (the corporate brand representing the exhibition business of Essel Group—Fun Multiplex), said, “The challenge in expansion of screens in tier 2 and 3 towns is due to (the fact that) the markets are not deep and hence fixed rentals are unaffordable.” As a result, the revenue-sharing trend is picking up in markets such as Ghaziabad, Lucknow, Noida (Uttar Pradesh) and Mohali in Punjab, where there are too many movie screens, he said. Fun Multiplex pays a fixed minimum guarantee and a revenue share for its cinemas in Ambala, Panipat and Bathinda in Punjab. Inox Leisure Ltd has signed a revenue-sharing deal for one of its Bangalore properties and for its upcoming theater in Bhopal (Madhya Pradesh), a company executive said. And PVR has signed revenue-sharing deals with malls for its multiplexes in Ujjain and , and for upcoming ones in Bilaspur, Bhilai and Panipat, said CFO Nitin Sood. “The growth of multiplexes has been significantly dependent on mall development. And foraying into new markets, smaller towns has been an expensive proposition for multiplex owners,” said Rakesh Jariwala, partner, media and entertainment, Ernst and Young. “Taking in view the dynamics of smaller townships, the footfalls have not translated to impressive revenue from these regions. So, it makes sense for multiplex owners to consider relooking their rentals models for expansion in tier 2 and 3” cities. India is expected to double multiplex screens to more than 2,200 by 2016, driven by the south and east Indian markets, according to a media industry report by the Federation of Indian Chambers of Commerce and consulting firm KPMG.

7. Discuss the merits and demerits of multiplex business.

Advatages :- 1. There are lot more shows for a single movie, so you can catch the movie without waiting for much time. 2. Multiplex do have the restraunts where when can go along with the family(much better than the side shops in single-screen theatres). 3. Mutliplex have other facilites like games for children, where they can enjoy while the movie is yet to start. 4. Mutliplexes provide different options to you, you can choose the film from a variety of films(whereas in single screen theatre, you have only one option).

Disadvantage :- 1. The main disadvantage of multiplexes is that they are too expensive. Not only the films but the normal things are also very costly in the multiplexex when compared to the single screen theatres.

Discuss the success of PVR cinemas in India.

PDF OF PVR

14. Explain the major players in multiplex business in India. PAGE NO 156 Discuss the scope of multiplexes in India.

THE CURRENT INDUSTRY SCENARIO India's craze for films has not been fully exploited by the "Film Exhibition"industry due to the lack of screen density in the country coupled with thepoor quality of screens. "Multiplex Cinemas" offer an alternative to tap thisp o t e n t i a l b y p r o v i d i n g a q u a l i t y e x p e r i e n c e t o t h e v i e w e r a s w e l l a s economies to the multiplex operator."Films" has been one of the integral components of the Indian entertainmentindustry contributing nearly 27% of the total revenues of the entertainmenti n d u s t r y . B e s i d e s , f i l m s a l s o c o n t r i b u t e t o o t h e r c o m p o n e n t s o f t h e entertainment industry like music, television and live entertainment. TheIndian film industry is one of the most complex and fragmented national filmindustries in the world comprising of a number of regional film industries likeHindi, Tamil, Telugu, Kannada and others. The Hindi film industry is the mostpopular among them. Though India produces the largest number of films inthe world (Approximately 1000 per year), it accounts for only 1% of the global film industry revenues. In spite of being over 90 years old, the Indianfilm industry was accorded the status of industry only in 2000. Over the years, the Indian film industry has been highly unorganized as film financingwas dependant on private and individual financing at extremely high interestrates. Only recently, the industry has got access to organized finance. Withvertical integration taking place between producers, distributors, exhibitors,broadcasters and music company’s corporatization is now taking shape inthe Indian film industry. We believe, that corporatization, will bring abouttransparency, accountability and consolidation which will help to improve theoverall profitability of the Indian film industry as well as reduce piracy andl e a k a g e s w h i c h p r e s e n t l y a c c o u n t f o r 1 4 % o f t h e I n d i a n f i l m i n d u s t r y ' s revenues. FILM EXHIBITION BUSINESS IN INDIA-TREMENDOUS SCOPE Fil m exhib ition forms the most import ant co mpon ent of the Indian fil mi n d u s t r y. A c c o r d i n g t o t h e - KPMG r e p o r t d o m e s t i c t h e a t r i c a l r e v e n u e s contribute s 57% of the total Rs59bn film industry revenues and are expectedto grow at 17%. Overall, the Indian film industry is expected to grow at 16%CAGR it is expected to reach Rs143bn in 2010. The main pockets for film exhibition in India are Delhi, Mumbai and South India. Due to various regional language film industries in the South, it has become an important filmexhibition pocket. Hyderabad and Bangalore are 2 southern cities whereoccupancies are exceptionally high at around 70%-80%. MULTIPLEX India currentl y has 11500 exist ing screens, 95% are standalone, singlescreens. These single screen cinemas are poorly maintained as the ownersfind it difficult to upgrade and renovate their facilities, due to unavailabilityof organized finance. The deteriorating quality of these cinemas dissuadedviewers and they started using alternative viewing options.Over the last few years, multiplexes have emerged as a trend in urban India."Multiplexes" are essentially cinemas with 3 or more screens. They provide aquality viewing experience and are generally located around shopping mallsto increase footfalls in these malls. Each screen in a multiplex has smallseating cap acit ies in the range of 150-300 seats as compared to single screen cinemas which have capacities in the range of 800-1,200 seats.With around 11500 active screens, India is under screened. China, whichproduces far lesser films than India has 65,000 screens while the US has3 6 , 0 0 0 . I n d i a ’ s s c r e e n d e n s i t y s t a n d s l o w a t 1 2 s c r e e n s p e r m i l l i o n populations. There is a need of at least 20,000 screens as against the current11500. This gives multiplex operators enough room to grow as the traditionalsingle-screen theatres do not have the financial wherewithal nor do they enjoy tax incentives

Explain the structure of multiplex design. PAGE NO 41

13. State the roles of MNCs in establishing new multiplexes. Emergence: Trade between nations has existed since ancient times but its scope used to be limited. With the Industrial Revolution and the introduction of fast means of communication and transportation, transnational trade has expanded at great speed. Subsequently, the MNCs have emerged. Collaboration with Media: In recent times, the emergence of media giants with increasing power and influence over human minds, and their collaboration with other MNCs, driven by mutual interest of the two, has profoundly intensified MNCs’ influence. The process has evolved and developed with modern ways and means that have added to its significance as well as its speed, scope and quantum. Lobbying: Given their huge capital resources and production capacities, MNCs are able to dictate their own terms in economic dealings. For the sale of their enormous production, MNCs require access to large markets; tariff issues, access restrictions and similar “barriers to trade” are hurdles in this access. What MNCs need is a global system for the free flow of their goods. They therefore use their sheer economic weight to influence international trade rules. With their huge resources, they employ lobbyists with the highest expertise and influence at international trade organizations. In all, there are approximately 15,000 lobbyists based in Brussels, or roughly one for each staff member of the European Commission, the executive body that negotiates on the European Union’s behalf in the WTO. Some 70 percent of these lobbyists represent business interests. Their expenditures in Brussels alone are estimated to be between € 750 million and € 1 billion. Moreover, an estimated 17,000 lobbyists representing different MNCs are working in Washington, DC. The pharmaceutical industry alone spent US$ 1 billion on lobbying in the US in 2004. The rich North, influenced by such lobbying, makes decisions in favor of the MNCs, irrespective of the economic, social or cultural consequences for the poor of the world. Entry in Host Countries: Having poor economic infrastructure and little capital, developing countries very easily agree to host MNCs. At times, their weak regulatory positions are subsequently exploited by MNCs.

Pushing Local Producers Out: MNCs either buy out the local companies of the host countries or push them out of the markets by offering cheaper and better quality goods for some time. Where aggressive marketing is needed, MNCs can, in the initial phase, even provide their products free of cost to coax the public into developing appropriate consumption habits. Inducing Buyers and Capturing the Market: MNCs capture the market using a variety of strategies and tools, including social and market research, opinion building, developing interest groups, lobbying, sponsorship, etc. The media plays an important role in this campaign. MNCs’ Impact on Host Societies MNCs carry out research to identify human needs, problems and lifestyles and come up with multidimensional responses, including the development of products and services. What causes them to conduct such researches and produce goods accordingly? Is it for the good of public or maximizing their own profits? This puts the whole process of globalization in question as its generally proclaimed goal is the good of common people. Before examining what happens when MNCs enter host societies to achieve their commercial objectives, it is pertinent to discuss the problems and strengths of the host societies. Weaknesses and Strengths of Host Societies When MNCs take their operations to the developing world, the host societies generally suffer from weak infrastructures, poor governance, widespread poverty, illiteracy, health care problems, and disparities in income distribution. Their strengths lie in their traditional and strong social structures where the family system provides strong bonds of relationship, a caring environment, a family-based social security system, simple living, and inherited traditional or conventional knowledge and wisdom. The host societies are mainly agricultural economies where food security has not been a problem in ordinary circumstances. The Positive Impact When MNCs enter host societies, there are some benefits, which are outlined below: Financial and Technological Resources and Expertise: MNCs provide immense resources and investments, technology, innovation and expertise to the host societies. A culture of research and development is encouraged and human resources are developed, at least within the organization. MNCs also contribute significantly to the national exchequer by paying taxes. Good Business Practices: Good governance, organizational transparency, clear command structures, and performance-based evaluation and incentives programs for employees encourage the merit system. MNCs introduce a professional working environment and culture for local organizations to emulate, thereby promoting sound management and business education.

Comforts of Life: In some cases, large-scale economies, quality control and a healthy competition lead to price cuts and other benefits for the end-user. People have more access to the comforts of life with a large variety of choices. Infrastructure Improvement: Many MNCs help in improving the infrastructure and provision of basic needs in their specific areas of operation.They either do so directly or provide funds for this purpose to civil society organizations. This also improves business conditions within and in the vicinity of the areas where they are operating. Pluralism: MNCs help boost cross-boundary interaction among people. Even education, particularly, business education, has taken on a global perspective. The global perspectives and opportunities for cross-cultural understanding increase the adaptability of students to alien environments. This leads to the mixing of cultures and practices and encourages pluralism as well as competition. The Challenges posed by MNCs Nevertheless, MNCs can also pose problems for host societies in the spheres of social and economic development and cultural diversity. How this happens is outlined below. Conflicts of Interest: MNCs are commercial organizations and their only interest is to gain maximum return on their invested capital, occupy market shares and ensure their long-term competitiveness. This leads to conflict of interests between the MNCs and host societies on issues like repatriation of profits, patents, and major operational decisions. Host countries would want MNCs to work in a manner that is harmonious with the social and political needs of their societies and communities, whereas the MNCs make their choices based purely on economic criteria. This conflict of interests leads to conflict within societies. Increasing Materialism and Consumerism: MNCs promote a culture of conspicuous consumption, in which presentation and cosmetic changes matter the most. The product models change very fast and the older ones lose relevance in a short span of time. Consumerism has an overwhelming impact on societies. For example, departmental stores and shopping malls/plazas are mushrooming everywhere both as an outcome of and an impetus to further consumerism. Eating habits are also changing, with increasing consumption of processed, instant, fast and junk food, especially products of international brands. The emphasis is on instant access and quick relief. Many products also glamorize life in the fast lane, leading to increased consumption of faster communication products, cars, as well as stimulants such as cigarettes, and alcohol. As outward looks become central in the vision of success, a vibrant fashion industry is changing the dress and outlook of ordinary people. Spending priorities have changed. Contrary to the conventional view, taking loans is now considered a status symbol. The availability of easy credit, consumer financing, credit cards and personal loans by the banks to the middle class is promoting a culture of people living beyond their means. Simplicity is losing currency and people strive to live in luxury. This trend makes the disparity of resources among people, groups and even regions look wider. Previously, education was aimed at developing a balanced personality and ethical and social values and character building were emphasized. Now, however, materialism has taken over. Corruption and Crime: In the race for maximum profit, the MNCs deem their ends to sometimes justify the means: they use their considerable buying power to corrupt people to capture markets. Healthcare Attitudes: Healthcare attitudes are changing and people expect better health services. The job is made easier by the new norm of “third party cashless payments,” where payment is made via credit cards or health insurance. The focus has now increased on preventive healthcare. Although it is good for those who can afford these facilities - and they are the targets of MNCs- yet it is extremely frustrating for those who cannot afford them. Hectic routines, targets and deadlines are resulting in stresses and pressures. A destructive lifestyle has led to a host of medical crises: sexual problems from over-performance at work, stress, mid-life crisis, ulcers, nervous disorders, hypertension, obesity, cardiac disease, diabetes, etc., are all lifestyle-related ailments that are on the rise. Brain Drain: The term “brain drain” is commonly used for the situation when talent goes out to other countries. The MNCs are involved in another kind of brain drain. Their lucrative salaries attract talent that might have contributed to the host society to work for their ‘multinational’ interests without leaving the country. Cultural Changes: MNCs use, develop and continually refine their marketing tactics to create consumers’ need for their products. They use social marketing and stars from the worlds of sports and show business to project their products, especially affecting the youth, women and children as they are generally attracted to glamour. Special events, festivals and campaigns are organized to create hype. In this atmosphere, ethical and moral considerations have no place, and corporate interests start determining what is to be celebrated and how. With the spread of MNCs’ operations in a society, the importance of foreign languages increases because these firms mostly operate among the classes equipped with foreign language skills and hire and promote the people from the same groups. Promotion of Non-Issues: Importantly, poor people are not the target of MNCs. They target the middle classes, who have the buying powers, and trying to change their priorities in everyday life, spending and consumption. MNCs establish close linkages with intellectuals, legislators, media and some non- government organizations (NGOs) to highlight specific issues that suit their business interests. Negative marketing: When introducing their products, MNCs exaggerate the qualities to the level of cheating and lying. Aggressive campaigns with false claims are launched. Local products are ridiculed. Children and youth are special targets, while women are treated as commodities to project the products, affecting the existing value framework of the societies. Business Promotion through Charity: Some MNCs are involved in charitable and welfare work in the host societies as well. However, the amount given by them in charity is not comparable to their profits. Moreover, the charitable work revolves around activities that directly or indirectly result in various kinds of gains for the corporations. Charity is given where the economies best suit their corporate interests. Violation of Human Rights: Exploitation of workers by large business corporations is a common phenomenon. Most workers are exposed to hazardous and inhuman conditions, overexertion and financial abuse. This happens despite the fact that many of the world’s largest business associations, including the International Chamber of Commerce, have endorsed the UN Secretary General’s “Global Compact,” a mechanism for self-regulation by business companies. Stresses on the Family: MNCs affect the host society’s family fabric in many ways. The new cultures and lifestyles introduced by MNCs are proving harmful to the family fabric in host societies. Overspending and living beyond means eventually creates economic pressures and develops tensions and stresses within families. Various indicators also prove that women working with MNCs and other big corporations undergo extra stress when entering into marriages and bearing children. Parents have little time for their families, particularly children. One out of six women in the world opts out of natural birth, according to the World Health Organization (WHO). Earlier, this trend was specific to the developed countries but it now prevails in the least developed world too.

12. What are the various services provided by the shopping malls ?

Customer Service Information on the mall and its services. Personalized attention for complaints and suggestions. Lockers For storing objects during opening hours. The proceeds are donated to the organization Aldeas Infantiles SOS. Anti-Child loss System Identification system to prevent children from getting lost from their parents. This free service is available at the Information Point. Car Rental Rent a car with all convenience. Infant Care Facilities A separate infant care room is located in the restroom area on the first floor. It is equipped with a microwave oven, table, seats, and a diaper changing table. Diaper Changing Tables Diaper changing tables are located in all of the mall’s restroom areas. Employment Opportunities Those interested in seeking employment in one of the establishments at L’illa Diagonal can leave their curriculum at the Information Point. Gift Wrap You can wrap your gifts at the Information Point. Rest Areas Take a break at L'illa Diagonal shopping mall. T-10 Public Transportation Tickets T-10 public transportation tickets are on sale at the Information Point. Wheelchairs Available for those requiring this service at the Information Point. Children's Services With everything made to measure of the smallest ones. Free Wi-Fi Free Internet connection in the whole commercial centre. Get parking time Many establishments offer incentives to those who park at L’illa Diagonal. Further information is available at the Information point. Taxi Call Free at the Information Point. Gift Card The best gift already exists. New service available at the Information Point. Styling Service Personalized styling and shopping advice free service. Check availability at the Information Point.

11. What is the need for design management to manage multiplexes ? Page no 50 to 55

9. State the operating models followed by multiplex operators. 10. How global economic meltdown affect the multiplex business ? Didnt find both

The bigger the mob the greater the thrill  Multiplexes offering tickets at around Rs 150 cannot call for large chunk of audience on account of high prices.  The Indian film industry is the world’s largest, churning out more than 1,000 films each year. There are an estimated 11500 cinemas in India. Of those, nearly 600 are multiplexes and around 10900 single screens  Single theatres would do well in smaller towns where multiplexes don’t go. They themselves have to look and explore their potential to serve better in therural or their expected market. Are the single screen theatres in India going to diesoon?  Multiplexes and distributors / producers starting conflicting onrevenue share. However, distributors / producers would argue thatcontent generation is more critical hence they should get an equal share if not more.  A couple of other issues like the multiplexes inability to clear hugeamount of out standings towards the distributors, not sharing the benefit of certain incentives given to them by the government with the distributor, led to the eventual deadlock.  The strike has also affected auxiliary industries like hoardings, publicrelations and advertising, as their work has come to a complete halt.  Apparently, this industry has suffered an estimated Rs 100 croreloss.This shows how the multiple dynamics act as very important factorin determining the industry growth and development. Strike Issue of Multiplexes

 DLF, a leading real estate player in the country, plans to invest US$ 298.12 million forthe expansion of its multiplex business. The company has planned to add at least 500screens in the next four to five years across the country.  Entertainment conglomerate Adlabs Cinemas has drawn up a plan to build 12megaplexes in India where you can not only see movies but also cricket and soccermatches on screen.  Multiplex chain PVR Cinemas, which currently has 92 screens, is also planning to addover 150 screens across India, staggered over a period of three years from 2008-2010,with a total investment outlay of around US$ 71.55 million.  Cinemax India, the multiplex chain which currently has 55 screens over 17 propertiesacross the country is planning to scale up its presence to 299 screens across about 100properties by fiscal 2010 MULTIPLEX BUZZ!! Economics of multiplexes in India : A study of the PVR group

By: Shivani Sharma Drawing on a case study of the PVR Plaza and PVR Rivoli located at Connaught Place of , Shivani Sharma in this piece helps understand the revenue generation techniques of the multiplex cinema halls of India. Sharma is an alumnus of Centre for Culture, Media & Governance, Jamia Millia Islamia, New Delhi between 2009-2011. The revenue generation techniques of the cinema halls have been one of the least explored areas of the communication studies. This essay is an attempt to look at the revenue generation strategies of the PVR Group, specifically, two halls, PVR Plaza and PVR Rivoli, located at Connaught Place, New Delhi. The financial year 2008-09, that is in focus here for the purpose of study, was marked as a particularly slow year for the Indian film industry for various reasons. PVR Plaza and PVR Rivoli, represent the era of multiplexes which started in India with the advent of Priya Village Roadshow, (popularly known as PVR), in the market of cinema exhibition in 1997. A joint venture of Priya Exhibitors Private Limited and Village Roadshow Limited, an Australia based cinema exhibition company, PVR is now one of many corporate players that dominate the market. Before 1997, the single screen halls owned by small businesses and sole proprietors were the only players in the market.

The primary source of revenue for any cinema hall has always been the sale of admission tickets. Advertisement, Food and Beverages, Royalty income and Convenience fee, etc. are other sources of revenue for a cinema. There have been attempts to diversify into other revenue streams to provide more options for out of home entertainment for the audiences. However, this also primarily depends on the sale of tickets because this model would work only when there are more number of people coming to the exhibition spaces to watch the movies. Therefore, the strategy of revenue generation of any cinema exhibition company would in final analysis take into account the number of halls and the audience footfall. To explain further, higher the number of halls, higher will be the company’s earnings and the higher number of people coming into the cinema hall would once again translate into higher revenue for the company. Table 1 illustrates the case in point for PVR.

Table 1: Details of the PVR Group (2005-2009) Number Growth Number Revenue(i Growth Footfall(i Years of ratein of halls n million) rate n million) screens footfall 2005- 18 75 1074.3 52 8.78 78 2006 2006- 21 82 1719.6 60 14.74 68 2007 2007- 25 101 2447 42 17.97 22 2008 2008- 29 125 2787.1 14 18 7 2009 With the increase in the number of movie halls/screens every year, the footfall has increased tremedously, leading to a fair growth in the revenue per year. However a closer look at the data would show that the percentage rate of growth has decreased both in terms of revenue and footfall which means there is an increase, but at decreasing rate. (see Table 2)

Table 2: Decrease in the Revenue & Footfall of the PVR Group (2005-2009) Revenue (per Number of Number of Footfall (per Years screen)(in screens halls hall)(in million) million) 2005- 75 14.324 18 0.487 2006 2006- 82 20.970 21 0.701 2007 2007- 101 24.227 25 0.716 2008 2008- 125 22.296 29 0.62 2009 There has been an increase in the number of screens from 2005-2008 and the revenue per screen and footfall per hall has also increased till the year 2007-08, but the same decreased badly in the year 2008-09. This was explained in the Price Water Cooperhouse report[1] which says that this slowdown was due to the economic slowdown and rising development cost.The multiplex industry witnessed delays in new roll outs of screens as majority of their upcoming properties were delayed due to slower construction activity and delay in getting regulatory approvals. The developers too were going slowly on construction activity in the wake of working capital getting dearer and acute shortage of labour. Thus the expansion plans around which the growth story of the multiplex companies were built, had been slowed in the short term. REVENUE GENERATION TECHNIQUES OF THE PVR GROUP Technique 1: Segregating the Audiences to Maximize the Revenue PVR has different categories of cinema halls which cater to different sets of audiences:

• PVR Talkies are the low-cost multi-screen cinema. They offer superior ambience and high hygiene standards for viewers in Tier 2 cities. For example, the rate for a morning show in PVR Priya at Delhi is Rs. 75 as it largely caters to a student crowd. • PVR Premiere, the premium multiplexes, cater to evolved premium urban viewers and the Gold Class sub segment, and • PVR Heritage caters to the high end audiences. This segregated manner of catering to audiences’ needs has ensured the inclusion of higher number of people as part of the audience.

Technique 2: Revenue Sharing with the Developers The cinema exhibition company also earns revenue from multiplex properties that it runs under a revenue share arrangement with the developers. The developer is the one who develops and owns the other parts of the multiplex. The revenue from ticket sales at these cinemas is paid in lieu of the rent on the basis of a revenue share with the developer. Multiplex properties at Ghaziabad, Mulund-Mumbai, Lucknow, Ludhiana and are examples of this arrangement. In the case of halls at other locations either the company owns the place or pays regular rent for the place they are operating in.

Technique 3: Convenience fee Convenience fee is the amount that the customers are charged for booking tickets through means which are largely telecommunications enabled such as internet, mobile etc which helps the audience avoid the hassle of waiting in a queue. Revenues from Convenience fee for the year ended March 2009 increased to Rs.21.7 million from Rs 14.9millionregistering a growth of 46%. It suggests an increase in tickets sales online and allied channels like, Mobile Ticketing etc. This surge can be understood in terms of the growing penetration of facilities like the internet to the public. Technique 3: Food and Beverages revenue Revenue from sale of food and beverages is the total amount paid by patrons at in-cinema concession stands for food and beverages and is net of sales tax / value added tax. This revenue source is planned very carefully to increase the number of transactions within the limited time audience have i.e, prior to the start of a film and during intervals. This is done by increasing the options available like providing service at the seat, adequate number of sale counters, attracting customers through offers like meal combos and tying up with well branded franchisees to provide food items not available under PVR’s candy bar model through direct rent or profit share models that yield well in a non-cannibalizing way. This helps to cater to local tastes and preferences in different ways, while keeping the core PVR candy bar model intact.

Techniques 4 & 5: Advertisement and royalty income Advertisement revenue includes revenue from onscreen advertisements, off-screen advertisements and cinema association. The increase in the number of halls will lead to a rise in the number of eyeballs that the location would guarantee. This in turn would be attractive for the advertisers. A look at the data of years from 2005-2009 also shows that the growth rate had been steadily on the rise till 2008. The year 2008-09 registered a slump in this growth.

Table 3: Advertisement and Royalty Income of the PVR Group (2005-2009) Income (in Years Number of halls Rate of growth million) 2005-2006 18 106.1 9% 2006-2007 21 196.9 86% 2007-2008 25 293.4 49% 2008-2009 30 382.5 30% Royalty income is the sum paid by certain suppliers so that PVR agrees not to sell directly competing products. For example, Pepsi pays a huge sum as Royalty Income aka Pouring rights to PVR for not selling any other soft drinks. Technique 6: Management fee Management fee includes • Basic revenue share fee/ management fee for services provided by the company generally to the property developer in relation to the multiplex, which is usually a percentage of turnovers.

• Incentive fee calculated as a percentage of gross operating profit (before interest, depreciation and management fee).

Other income earned, include rent from spaces that are leased out to third parties, returns from different investments, etc.

THE CASE OF IPL SCREENINGS IN THE PVR PLAZA AND RIVOLI Connaught Place, where PVR Plaza and PVR Rivoli are located, sits right in the heart of New Delhi. It is one of the prominent landmarks in the city, especially with the colonial buildings that surround the place. PVR Plaza is located in the inner circle whereas PVR Rivoli is located in the outer circle with a distance of barely 500 meters between the two. Since the two halls are so closely located, it is interesting to observe how they respond to competition with each other and with other cinema halls as well. PVR has rented heritage buildings situated in CP for both the halls where a monthly rent of Rs. 2 million and 1.5 million is paid for Plaza and Rivoli respectively. The pricing of tickets also reflects this difference between the two halls. While the former has a two tiered pricing with a segregation of Rs. 275 and Rs. 225, Rivoli has a three tiered pricing with a segregation of Rs.250, Rs.225 and Rs. 180. As the statistics earlier mentioned, both the halls, in line with the revenue pattern of the PVR Group, earn the maximum through sale of tickets and food and beverages. Also Plaza with its location in the inner circle is more attractive to the advertisers.

It would be useful to understand how PVR responds to competition to get a perspective on the significance of the proximity of the two halls. This was most visible in the case of Indian Premier League [2] (IPL) screenings. According to some internal sources, PVR has entered into an agreement with IPL where they had agreed to screen IPL matches in specific number of halls. Therefore in spite of the low revenue generation from IPL it had to be screened. In 2007-08 the IPL screenings were held in Plaza but in the year 2008-09 this was shifted to Rivoli to offset the losses that were caused due to the fall in the footfall in the hall. Therefore in this case, the two halls Plaza and Rivoli functioned in tandem where the IPL screenings were conducted in the latter while the regular movie screenings were held in the former. Such a revenue strategy to offset its losses was not available to Odeon Big Cinemas, also situated in Connaught Place. A joint venture of the Odeon Theatre (opened in 1939) and Anil Group (ADAG)-owned the Big Cinemas, Odeon Big Cinemas is the nearest competitor multiplex of the PVR Group in Connaught Place. It had to continue its IPL screenings despite the losses it incurred as it too like the PVR Group had an agreement with the IPL to show its matches.

2. SALES QUOTAS INTERMEDIARIES:- As electronic commerce becomes increasingly popular, new intermediaries are emerging and transforming marketing and distribution channels. Intermediaries in electronic marketplaces provide the IT and business infrastructure to facilitate the completion of commercial transaction over interorganizational computer networks. If electronic intermediary services are introduced to wholesale markets where qualities vary, the provision of IT alone cannot create reliable electronic marketplaces for traders who have no pre-established relationships. To build trust among market participants, electronic intermediaries should establish policies and processes that regulate responsibilities and duties of market participants and legitimate transactions. Institutional policies and processes reduce risks and help establish trust among market participants. This paper provides empirical evidence that trust building processes by electronic intermediaries can lead to concentration of electronic transactions on high quality products, thus differentiating electronic and traditional markets.

Social influence occurs when one's emotions, opinions, or behaviors are affected by others.[1] Social influence takes many forms and can be seen in conformity,socialization, peer pressure, obedience, leadership, persuasion, sales and marketing. In 1958, Harvard psychologist, Herbert Ke l man identified three broad varieties of social influence.[2]

1. Compliance is when people appear to agree with others, but actually keep their dissenting opinions private.

2. Identification is when people are influenced by someone who is liked and respected, such as a famous celebrity.

3. Internalization is when people accept a belief or behavior and agree both publicly and privately. Sales management From Wikipedia, the free encyclopedia Sales management is a business discipline which is focused on the practical application of sales techniques and the management of a firm's sales operations. It is an important business function as net sales through the sale of products and services and resulting profit drive most commercial business. These are also typically the goals and performance indicators of sales management. Sales manager is the typical title of someone whose role is sales management. The role typically involves talent development and leadership. Design management From Wikipedia, the free encyclopedia

Design management is the business side of design. Design managers need to speak the language of the business and the language of design. Design management is a business discipline that uses project management, design, strategy, and supply chain techniques to control a creative process, support a culture of creativity, and build a structure and organisation for design. The objective of design management is to develop and maintain a business environment in which an organisation can achieve its strategicand mission goals through design, and by establishing and managing an efficient and effective system. Design management is a comprehensive activity at all levels of business (operational to strategic), from the discovery phase to the execution phase. "Simply put, design management is the business side of design. Design management encompasses the ongoingprocesses, business decisions, and strategies that enable innovation and create effectively- designed products, services,communications, environments, and brands that enhance our quality of life and provide organisational success."[1] The discipline of design management overlaps with marketing management, operations management, and strategic management

Traditionally, design management was seen as limited to the management of design projects, but over time, it evolved to include other aspects of an organisation at the functional and strategic level. A more recent debate concerns the integration of design thinking into strategic management as a cross-disciplinary and human-centred approach to management. This paradigm also focuses on a collaborative and iterative style of work and an abductive mode of thinking, compared to practices associated with the more traditional management paradigm.[2]

Over recent years, design has become a strategic asset in brand equity, differentiation, and product quality for many companies. More and more organisations apply design management to improve design-relevant activities and to better connect design with corporate processes. Value-added service From Wikipedia, the free encyclopedia A value-added service (VAS) is a popular telecommunications industry[1] term for non-core services, or in short, all services beyond standard voice calls and fax transmissions. However, it can be used in any service industry, for services available at little or no cost,[citation needed] to promote their primary business. In the telecommunication industry, on a conceptual level, value-added services add value to the standard service offering, spurring the subscriber to use their phone more and allowing the operator to drive up their ARPU. For mobile phones, technologies like SMS, MMS and data access were historically usually considered value-added services, but in recent years SMS, MMS and data access have more and more become core services, and VAS therefore has begun to exclude those services.

Mobile VAS services can be mainly categorized into 3.

1. Consumer VAS

2. Network VAS

3. Enterprise VAS A distinction may also be made between standard (peer-to-peer) content and premium-charged content. These are called mobile value-added services (MVAS) which are often simply referred as VAS.

Value-added services are supplied either in-house by the mobile network operator themselves or by a third-party value-added service provider (VASP), also known as a content provider (CP) such as All Headline News or Reuters.

VASPs typically connect to the operator using protocols like Short message peer-to-peer protocol (SMPP), connecting either directly to the short message service centre (SMSC) or, increasingly, to a messaging gateway that gives the operator better control of the content.

The term "value added services" is used to refer to options that complement but a core service offering from a company but are not as vital, necessary or important. This term is used in many industries, most notably the telecommunications industry. Value added services are often introduced to customers after they have purchased the core services around which these ancillary offerings are built.

Costs

pricing strategy ( for a multiplex)

Posted on September 4, 2011 by aayu11

In order to get a turnover in the very 1st week( actually mostly the 1st 3 days) of the release of a movie, the producers normally release their movies on a friday, as people normally during weekends,would watch a movie for entertainment, irrespective of the price. This shows us that the demand is inelastic. Nowadays due to the increasing amount of rush, traffic and parking problems many people prefer watching movies rather than going to other places, which has increased the demand. The price is around 150-200 on friday morning show, at most of the big multiplexes. While on friday night the price is around 250-300, because many people would finish their work and then go for a night show, as the next day would be a off. Saturday and sunday the morning shows would not be very expensive . While the price does rise to around 250-300 for the rest of the days. These prices are normally aimed at high income level people, whose demand is inelastic. While if not a multiplex, with not many screens, the prices of the tickets are normally low comparatively, but even they increase their prices to an extent, during the weekends, as they aim at low income level consumers.