Multiplex and Single Screen Cinemas - India March 2009

Executive Summary SAMPLE Market Drivers & Challenges Characteristics & Trends Competition Estimated to be worth INR XX bn in 2008 and INR YY bn in 2012 Key Segments: Single and double-screen cinemas and Multiplex cinemas Multiplex segment is growing while single screen segment is declining Southern Indian states together account for x% of the number of theatres in India Trends Producers bypassing distributors Shift to digital cinema Alternate content in multiplexes Retail partnerships New format in single screen theatre Drivers: Supply side : Growth in Film Industry , improving supply of real estate and favourable tax exemptions Demand side: Favourable demographics, rising income levels and willingness of people to spend on recreation Challenges: Uncertainty over entertainment tax, slowdown in economy, alternate entertainment avenues, development delays and piracy Single screen segment : Highly fragmented and unorganized Multiplex segment : Dominated by five organized players Major players in Multiplex segment: Company X, Company Y and Company Z Fierce competition in multiplex segment Characteristics Seasonality Reducing shelf life of movies Low screen density Increasing average ticket prices

Estimated to be worth INR XX bn in 2008 and INR YY bn in 2012

Key Segments: Single and double-screen cinemas and Multiplex cinemas

Multiplex segment is growing while single screen segment is declining

Southern Indian states together account for x% of the number of theatres in India

Trends

Producers bypassing distributors

Shift to digital cinema

Alternate content in multiplexes

Retail partnerships

New format in single screen theatre

Drivers:

Supply side : Growth in Film Industry , improving supply of real estate and favourable tax exemptions

Demand side: Favourable demographics, rising income levels and willingness of people to spend on recreation

Challenges: Uncertainty over entertainment tax, slowdown in economy, alternate entertainment avenues, development delays and piracy

Single screen segment : Highly fragmented and unorganized

Multiplex segment : Dominated by five organized players

Major players in Multiplex segment: Company X, Company Y and Company Z

Fierce competition in multiplex segment

Characteristics

Seasonality

Reducing shelf life of movies

Low screen density

Increasing average ticket prices

Market Overview Business Model Drivers & Challenges Characteristics & Trends Competition Key Developments

Market Overview

Business Model

Drivers & Challenges

Characteristics & Trends

Competition

Key Developments

Cinema exhibition comprises of single-screen and multiplex theatres, with the latter growing rapidly Key Segments Single and double-screen cinemas Multiplex cinemas, i.e. three screens or more Multiplexes account for: x% of the total number of cinema halls y% of total cinema screens in the country South Indian states together account for x% of the number of theatres in India SAMPLE Overview Market size & growth Theatre distribution Growth of Multiplexes Source: X 2006 Y 2008 Z 2012 +b% +c% +a% INR bn Z +a% 2012 +c% +b% X 2006 Y 2008 Screens u% Andhra Pradesh v% Tamil Nadu w% Kerala x% Karnataka y% Maharashtra z% Uttar Pradesh t% Others

Key Segments

Single and double-screen cinemas

Multiplex cinemas, i.e. three screens or more

Multiplexes account for:

x% of the total number of cinema halls

y% of total cinema screens in the country

South Indian states together account for x% of the number of theatres in India

Ticket and F&B sales contribute to bulk of revenues SAMPLE Exhibitor Secondary Revenue Primary Revenue v% z% y% x% w% Others Advertising Parking F&B Ticket z% y% x% w% v% Others Rent Taxes F&B Distributor Secondary Costs Primary Costs Source: 2% z% Convenience Fee y% Management Fee x% Parking Charges z% Advertising Revenue y% F&B Sales x% Ticket Sales z% Personnel Cost y% Overheads x% Rent / Rev Share z% Entertainment Tax y% F&B Cost x% Distributor’s Share

Drivers Drivers Growth in Film Industry Improving supply of Real Estate Tax Exemptions Favorable Demographics Rising Income levels Willingness of people to spend on recreation Demand Side Supply Side

Challenges Challenges Uncertainty over entertainment tax Piracy Development delays Alternative modes of entertainment Slow down in economy

Key Trends Trends Producers bypassing distributors Shift to Digital Cinema Alternate content in multiplexes Source: Retail partnerships New format in single screen theatre

Single screen segment is unorganized while multiplex segment is highly organized and dominated by five players Single screen segment is highly fragmented with few owning more than one movie hall Five players dominate the multiplex industry Box office revenue breakup in multiplexes: x% from Hollywood movies Over y% from local Hindi language movies Occupancy levels Multiplexes : x-y% Single screen cinemas : a-b% Fierce competition in multiplex segment due to attractive economics and growth potential Leading players have major expansion plans Many new players are planning to enter this industry SAMPLE Competition Number of screens multiplexes Source: X Y Company x X Y Company Y X Y Company z X Y Company V X Y Company W Number of Cinemas Number of Screens a% c% W V Company X Company Z Company Y d% b% U X Company V Occupancy Footfalls (mn) mn % Footfalls and Occupancy ratio

Single screen segment is highly fragmented with few owning more than one movie hall

Five players dominate the multiplex industry

Box office revenue breakup in multiplexes:

x% from Hollywood movies

Over y% from local Hindi language movies

Occupancy levels

Multiplexes : x-y%

Single screen cinemas : a-b%

Fierce competition in multiplex segment due to attractive economics and growth potential

Leading players have major expansion plans

Many new players are planning to enter this industry

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