At a time when top multiplex players had put a pause on or slowed down their screen expansion plans, Miraj Cinemas defied reason by moving into expansion mode and launching a slew of new properties.
The Covid-19 scare does not seem to have put the brakes on Raichur’s Miraj Cinemas’ growth plans. When it finally got the go-ahead to reopen after a seven-month shutdown, it not only reopened existing properties but also launched a new four-screen plex in Raichur on October 15, followed by a similar one in Telangana on November 4.
Miraj Cinemas' four-screen property is the first multiplex in Raichur, and is in keeping with the operator’s plans to expand into tier 2 and tier 3 markets.
"In addition, we have done the work and received the license for a five-screen plex in Kolkata and a three-screen property in Delhi. But there is no content right now. So, we have not started the property and we will launch them on January 26 when a mid-budget Hindi film releases, as even the Hindi version of Master may not work in these markets," Amit Sharma, MD, Miraj Cinemas, told Moneycontrol.
Along with Kolkata and Delhi, Sharma will also be launching a five-screen plex in Coimbatore on January 13 keeping in mind the release of south star Vijay's Master. Scheduled for release during the Pongal holiday, the Tamil film will release on January 13, and its Hindi version on January 14.
"Overall, we have launched eight new screens and completed 21 screens during the pandemic along with renovation of a Jaipur property. However, Rajasthan has not allowed cinemas to reopen. Once we get permission we will start that property too," he said.
While market leader PVR added four screens during the COVID-9 period, INOX had no new screen additions.
However, Cinepolis opened a three-screen property in Gujarat and an 11-screen property in December in Nerul, Maharashtra.
Cost of adding more screens
Talking about the cost, Sharma said that while they had finished 80 percent of the work on these properties they still needed Rs 20-25 crore to complete these projects.
"There is no denying that cash flow is the biggest problem right now. But vendors and partners have stood for us. All developers have extended their support in terms of rental discounting or getting into revenue-share agreement. If we look at the Raichur property, we’re following the revenue-sharing model with the developers till March 31, and so we only have the overhead cost of staff, electricity, etc," said Sharma.
More screen launches on the way
From 125 screens in 2019, Miraj Cinemas will start the new financial year with 150 screens. Also, five screens in Chennai, six in Bengaluru and Hyderabad each and three screens in Jamshedpur have gone under fit out, Sharma said. Miraj Cinemas will start launching these properties between April and July this year.
Explaining the term fit out, Sharma said, "This means that we have taken the handover from the developer and will start the interior work." He aims to take the screen count to 170 this year, and plans to touch the 200-screen mark by October next year.
Currently, Mumbai-based Miraj Cinemas is the country’s fifth largest multiplex operator. PVR heads the list with 845 screens, followed by INOX with 695 screens, Carnival Cinemas with 470 and Cinepolis with 295.
Sharma, who was head-operations strategy at Cinemax India (cinema chain) and worked in the company for eight years, started Miraj Cinemas in 2012.
"One day I happened to meet Madan Paliwal (Chairman of Miraj Group) and showed him the idea. He bought the idea and that's how Miraj Cinemas came up. We started our first multiplex in 2012 and we were sub-10 screen till 2010. We reached the 100-screen count by 2018," said Sharma.
New territories with strong box office potential
Along with adding more screens, Sharma is venturing into untapped territories which either have very few multiplexes or none at all.
"The 9,000 screens that India had catered to 30 percent of the population and the rest are starving for a multiplex. Even if they have the money they do not have a multiplex," he said.
Pointing out the potential of some of the cities, Sharma said, "Compare box office collections of Uri: The Surgical Strike with Tanhaji: The Unsung Warrior as the two films released in the same month but in two different years. So, Uri which released in January 2019 earned Rs 10 to Rs 15 lakh in Akola, in Maharashtra whereas Tanhaji which released last year earned Rs one crore in Akola."
Before Miraj Cinemas expanded to Akola, the place had only single-screen theatres. The same was the case with Chandrapur in Maharashtra.
Explaining the rationale behind venturing into smaller towns, Sharma said: “This is why we entered places like Gurdaspur, Chandrapur from where there were no collections coming and now we are seeing lakhs and crores being added to the box office. We are looking at the Jamshedpurs and Bhagalpurs of the world where there are half a million population but not many multiplexes. Like Jamshedpur has one big multiplex, Cinepolis, but that's all for a million-plus kind of city."
"The entire Bihar has only two to three cities that have a multiplex and same is the case with Orissa where all screens are concentrated in Bhubaneswar or Cuttack, but at the same time there are no multiplexes in Sambalpur or Berhampur. So, we are looking to add three- to five-screen multiplex in such places,” he added.