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Javier Sotomayor-led Mexican exhibition chain Cinépolis India will become the first cinema exhibitor in India to operate two brands simultaneously — Cinepolis and Fun Cinemas. The company, which entered India in 2009, will continue to operate its multiplex business under the Cinepolis brand, and will keep the single screen business under the Fun Cinemas brand.
Furthering this strategy, the fourth-largest cinema exhibitor in the country has entered into a strategic alliance with Rathi Group of Cinemas for operation of 10 single screen theatres. These theatres span across eight cities in MP and Maharashtra, namely Nagpur, Raipur, Bhilai, Durg, Akola, Yavatmal, Paratwada and Amravati. With this alliance, Cinépolis’ screen count in India has increased to 236.
Cinepolis bought out Shubhash Chandra-promoted Fun Cinemas in 2014, acquiring control of 83 screens for an estimated Rs 480 crore. While it will bring some of the Fun properties under Cinepolis brand, many of the existing properties, especially the single screens, will continue to operate under the Fun Cinemas brand. New acquisitions in the single screen space will be folded into the Fun brand, as is the case with Rathi screens.
As part of the deal, Cinepolis will invest in refurbishing and rebranding the properties and the two parties will share the revenues from the various streams — box office, food and beverage, parking and cinema advertising. The ratio of revenue share has not been revealed, but Akshaye Rathi, Director, Rathi Group of Cinemas, assures that the terms of the deal keep the interests of both parties safe.
“For us, it is a big opportunity for growth. Having a brand like Fun Cinemas to associate with and the scale that Cinepolis brings with it means standardisation of operations for us. It will help us get better deals in cinema advertising, F&B and overall upgrade the properties,” says Rathi.
Javier Sotomayor, Managing Director, Cinépolis India, commented, “Cinépolis reckons this to be a successful business model for the company as well as for the theatre owners. Cinépolis already has a similar model with Fun Cinemas and operates 12 Screens under it. We believe this is a faster way to increase our footprint in India, in lieu of slow growth of real estate and licensing process. With this model, we plan to add more screens across the country, as long as they make strategic sense to Cinépolis. Such collaborations would create a larger and efficient ecosystem for the exhibition industry and improve the cinema experience in the country.”
Traditionally, Cinepolis likes to have mega-plexes under its fold in order to provide the complete cinema going experience with entertainment zones and food courts. Sotomayor has said in the past that the company prefers to have at least four screens under one property. However, given the lull in real estate development and a saturation in consolidation of multiplexes at the national level, inorganic expansion will have to come either by acquisition of single screens or regional multiplex chains.
Devang Sampat, business head, strategic initiatives, Cinépolis India, said: “We will work closely with these cinemas to increase the efficiencies and standardise processes. This model will increase synergies and transparency for all stakeholders involved — distributors, advertisers and exhibitors. Access to ticket booking from Cinépolis portal and partner websites would be an enhancement in user experience.”
