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Friday, October 27, 2006


The multiplex owners in India are following the path taken by hotels and airlines in the country by slashing down on the frills. PVR Ltd, the leader in films exhibition and one of the biggest competitors for Adlabs, expressed its clear intentions of setting up a string of budget multiplexes across the nation with tickets that would be priced between Rs.40 and Rs.60 called ‘PVR Talkies’. Not surprising though, these theatres are all set to mark their debut in non-metro towns to maintain the premium nature of the PVR brand in the big cities. The question is – will AFL follow suit?

Regarding AFL’s plans in non-metros, Manmohan Shetty, CMD, Adlabs reveals, “Since so many new players have come, it is not only a quality benchmark anymore; it is also a financial benchmark that comes into play. We are having a constraint to not do certain things because there is a constraint as to how much you can invest in one multiplex or on one show or per screen and it is also about what we call a commercial constraint.” AFL would be missing out on a massive opportunity though. With domestic theatrical revenues set to grow at 17% annually to touch Rs.86 billion in 2010 from the current Rs.34 billion according to KPMG analysts, AFL should focus heavily on their exhibition business. AFL’s move to tie up with renowned filmmakers like RGV, Ramesh Sippy, Prakash Jha and Vipul Shah for co-production is a step in the right direction. To this, Manmohan Shetty pronounces, “We thought of partnering with filmmakers who have their own ongoing projects and tie-ups...” AFL will be acquiring a majority 51% stake in Synergy Communications Pvt. Ltd. (announced on September 7, 2006), which is known for the popular Kaun Banega Crorepati. This move indicates its intentions for the TV content-production business, which is currently growing at 15% annually and contributed over 60% to total revenues of the Indian entertainment industry in 2005.

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Source :
IIPM Editorial, 2006

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