The money in youth hangouts

The Essel Group's E-City Ventures is trying to put together a fun package.

Atul Goel, 28, is a busy man. Currently heading E-City Ventures "" the entertainment and retail arm of the Essel Group, he sure ought to be.

A company with interests in out-of-home realty development, mall-based property management, digital cinema solutions, film distribution and movie exhibition, recently brought all its operations together under the common umbrella E-City Ventures, the new corporate entity.

E-City Ventures, part of a group diversification programme brought about by Goel himself, intends to develop and operate 20,00,000 sq ft of commercial realty across seven family entertainment centres (under the brand Fun Republic) by 2007. Fun Multiplex currently operates 17 screens in New Delhi, Mumbai, Chandigarh and Ahmedabad. Goel's plan proposes "... to have 125 screens by July 2007, spread over 20 locations".

Revenue wise, Fun Multiplex delivers almost half the revenues, followed by E-City Entertainment at 30 per cent, and E-City Films and E-City Property accounting for 5 per cent each. "E-City Digital Cinema that contributes 15 per cent today, will be the revenue driver in the future," forecasts Goel.

Multiplex marketing is not easy, given the multiplying competition and fickle nature of consumption patterns.

In the past, multiplexes have helped create loyalties for a mall with the help of their own loyalty programmes, which in turn integrate other retail properties within the mall. "Using tenacious marketing research tools," says Goel, "we discovered that loyalty to a leisure brand can only be created by offering instant benefits rather than accrued ones." The Fun Rewards Plan, he claims, has spurred footfalls.

But the game is getting more competitive still. According to a research report, Retail Real Estate: Malls in India 2005, there would be 358 operational malls in the country by 2007 in eight major cities. Today, the country has approximately 96 operational malls with an almost equivalent number of multiplexes.

The mall-theatre combination has proved a winner so far, but how long this lasts is still not clear. This is all the more so because the real estate market is in flux at the moment.

"The developer community should not fall prey to the bullish, pulled-up real estate market," cautions Goel, hoping that "scientific market research" is used by developers to assess their prospects before they zero in on a property. The realty business is infamous for boom-and-bust patterns. Sudden exitement sends every player into a construction frenzy, and then the overcapacity sends many of projects crashing out of business.

Also, there's no escaping the way the film industry operates. "The cinema industry has carved ways for an outward geographic reach," observes Goel, speaking of Bollywood's upmarket viewership focus nowadays, "rather than creating consolidated, regional viewership patterns. The infrastructure now needs to penetrate smaller towns and cities, instead of concentrating in the mega cities."

E-City has allocated resources for cities like Bhatinda, Ambala, Udaipur, Jodhpur, Mangalore, Agra, Rajkot, Coimbatore along with plans for larger cities too. "E-City Entertainment would have Lucknow (a mall of 400,000 sq ft ) operational this year. While the E-City Property & Management Services would try to garner business from five malls outside the E-City Venture's projects," details Goel.

Meanwhile, film distribution is going strong. Goel aims to distribute 15-20 movies this year; E-City has acquired The Flock, starring Richard Gere, and I Could Never Be A Woman, starring Michelle Pfeiffer, both from Bauer Martinez Studios.