Movie halls chain Carnival Cinemas is targeting to more than double the number of screens to 1,000 by the end of 2023 and will rely on a newly tweaked, less capital-intensive model to realize its aim, a senior official said on Thursday.
It will now be getting into revenue-share agreements with cinema owners where it takes care of operating expenses but shares revenue with the property owner before getting into a long-term lease as against the previous practice of signing a lease agreement upfront, the official said.
“The pandemic has had a very deep impact on our industry. We intend to operate a property for 6-7 months on a revenue-share basis initially which will tell us about the business potential and help discover the price for the eventual long-term lease,” its marketing and sales head Prashant Kulkarni, who is spearheading the expansion, told PTI.
Kulkarni called this as a win-win proposition for both the movie chain and also the property owner and added that the new operating model has come out of the churn of the pandemic.
Carnival will have to take care of only the operating expenses including marketing and save because there is no rent commitment, while a property owner who has been impacted in the pandemic will get a partner to share the operational costs, he said.
Kulkarni claimed it helps to be a part of a bigger network because ad inventory gets sold as a bouquet, food and beverage service gets integrated, show planning happens centrally and content gets procured at a wider level.
The chain was initially targeting to reach the 1,000 screens milestone by 2020 but the impact of the COVID-19 pandemic, which resulted in a complete closure of cinema halls and continuing restrictions on audience capacity, he said.
At present, Maharashtra and Kerala are yet to open the cineplexes after the second wave, while the audience capacity is capped at 50 per cent in other parts. Kulkarni said while the pandemic has been a boon for over the top players like Netflix, people still yearn for the big screen movie watching experience in a theatre and hoped for it to return once the fears of COVID infections go down.
In an April 30 note, rating agency Crisil had said localised lockdowns and night curfews in light of the newer wave of COVID-19 infections are set to extract a toll on multiplexesÂ in the country, and companies in this sector will report operating losses for the second consecutive year. A recovery will happen only next fiscal, it had said.
Kulkarni said the chain does not have a preference on the size by number of screens that a property owner gets to the table, and would like the screens to be spread out across the country.
Having a pan-India presence helps while pitching for ad bookings, he reasoned. PTI