BEHINDWOODS COLUMN

Theater Canteen and Parking business

Canteen sales form an exceptionally principal chunk. It is the business that generates substantial money to the theater owners.  Many times when a big film was bought through MG or outright plummets this is the source of income that helps a lot to mitigate the incurred loss.

For the business case, consider that a theater houses 1000 seats. At least 500 vehicles are expected, comprising bicycles, two wheelers, auto rickshaws and cars. Nowadays two wheelers and cars form the majority of these vehicles. Parking charge is collected at the rate of Rs.10 per bike and Rs.30 per car. For a full house, 450 bikes and 50 cars bring in the collection of (450X10) + (50X30) is Rs.6000 from parking charges alone. Do the math for income of four shows by yourself.

Other important income is generated from the snacks and cool drinks sold at the stalls. These are prices at least three times higher than the price of the same food item sold outside theater. In full house shows like this, if 700 out of 1000 viewers spend a minimum of Rs.20 at the food counter, the income for the show calculates to Rs.14000.00.  This works out to a whopping Rs.56000.00 per day. Due to this, most theater owners retain parking collection and food stall sales with them when they lease out the theaters.

Few theater owners would lease or rent out theater canteens and parking on monthly basis. Based on the value of theater and worth of business taking place in it, an advance amount and monthly rent is fixed. The person who leases the rights would earn the profit above rental and maintenance expenses.

Of course, all days do not generate grand returns like above. In single screen theaters, as the ticket collection dwindles after first week, the sales of food items would recede too. When a fan buys the ticket at a premium price, if the movie fulfils his expectations, he would spend generously at the theater canteen counter. On the other hand, if the movie fails to meet the common fan’s requirements, the canteen sales would crash-down, asserts my friend Sivakumar who is experienced for more than 15 years in theater canteen sales.

Meanwhile, can you believe this? The majority income of multiplex is generated not from tickets. Trust me, it is from their parking lots and food counters! 

Multiplexes

Multi storied complexes, known famously as multiplexes ushered a major change in theater business. In a scenario where single screen theaters have been ruling the cityscape for almost three decades, complexes like Devi Theater, which housed one big screen and couple of small screens have started to emerge. These complex theaters received overwhelming response from the public since they had modern technology as they were new. Complex theaters were providing convenience to the public that even if the targeted film tickets were sold out viewing a second movie in the same complex was possible. As a result, almost all major cities in Tamil Nadu saw the emergence of at least one complex theater or renewal of an existing single screen into one.

Tamil cinema theaters, thus were moving on with gala and festivity, were deserted in the 90s due to the bad era prevailed in Tamil film industry. Theaters where once people swarmed were shut down. Hope was down and theaters were left to reduce to nothing with poor maintenance and no shows anymore. Many theaters were demolished to make way for Marriage halls or godowns or residential buildings.

In a juncture like this, in the early 2000s, Tamil Nadu witnessed the arrival of multi storey theaters called multiplexes. They brought in people from various walks of life by attracting them with movie screens, shopping centers, indoor casinos and food courts, thus bringing in multiple entertainment options under one roof.

Multiplexes attracted more visitors from upper middle class of the society. Targeting this class of audience, Hindi films industry started making non-linear small budget films and fairly succeeded too.

Multiplexes gave importance to the viewers’ comfort features such as good audio and video systems, hygienic toilet facilities, clean air, superior air conditioning, congestion–free ticketing, facilities for Internet booking and even privilege membership facility to attract viewers to the theaters. Thus they strengthened their presence in the theater business. Viewers, though they have to shell out extra money for multiplex, as they get completely satisfactory viewing experience in return, they do not mind those extra bucks. As the liking towards them kept growing all over the state, multiplexes started to appear all over Tamil Nadu by demolishing or modifying old theaters or complex theaters. They were even created with five or six screens in the new upcoming malls. All these multiplexes are very successful. Multiplexes brought customers back to theaters. Due to their higher entry tariff, distributors saw increased collections. Thus, multiplexes grappled their support also.

When Mayajal was starting its operations with six screens, the prevailing opinion was that it was too far from the happening place of city and there is not even remote possibility to successfully screen any film there. But I was very confident that within a year’s time, Mayajal would win a place for its own. But that Multiplex was smarter than I thought! Within six months, producers have made an agreement with Mayajal to release their films with it on agreement percentage.

That brings us to the discussion on multiplex agreements. Is share agreement for a multiplex different from single screen theaters? Certainly! It was so critical once that for a period of three years Hindi distributors were against the multiplex owners’ percentage claims and protesting against them not giving any movies to them. Not budging, multiplex owners screened old films in their screens. There is a difference between the agreements of single screen or complex theaters and multiplexes. The owners cite the superior audio and video experience, comfortable seating, toilets and good advertisements and capital to establish multiplexes in big commercial complexes as the reason.

A multiplex would not allow any distributor to screen his film in MG, advance or hire routes. Always they follow percentage basis screening called Terms only. Unlike other theaters that follow first week 60-40, next week 50-50 followed by 40-60 in the third week, their sharing methodology is totally reverse. Multiplexes follow 70-30 (70% to multiplex; 30% to distributor) for first three weeks and later on adopt 75-25 ratio. Majority collection is taken by the multiplex!

So how does a distributor accept this ratio? People love multiplexes for incomparable viewing experience; added to that entry fee is higher than any other theaters. Thus, multiplexes are capable of returning huge collections in short frame of time. This lucrative collection makes distributor crave for screening his movie at least for one show in any of the multiplexes in the city.  According to my memory, the average hit Siva Manasula Sakthi was screened in one of Sathyam’s screens. It was screened for a period of seven weeks as four, three and even single show per day. The total collection stood at 35 lakhs. When we consider the distributor’s share of 25%, it is evident that he gets more in multiplex compared to other theaters.

As many multiplex theaters are coming up, all theaters providing good amenities and maintenance, it is very obvious there would be immense competition prevailing to protect their share among the public and retain their clientele.

[..to be continued