(This interview was published in TheatreWorld March-May 2016 issue)
With 327 screens at 126 properties spread across 92 cities, including metros and smaller cities, Carnival Cinemas has an increasing nationwide presence succoured by organic and inorganic modes of expansion. PV Sunil, CEO and Director, Carnival Cinemas, has propelled the company on an unprecedented growth trajectory. TheatreWorld gets upclose with the man himself.
Tell us about the Carnival Group.
Carnival group is a very diversified company, which primarily started with agri-commodity business. We then diversified into entertainment and hospitality – food courts, restaurants and multiplexes. Further, we have also diversified into realty business by acquiring IT and mal spaces. We currently own a large mall in Chandigarh and a couple of IT parks.
Carnival Cinemas started with a small theatre in Kerala. What inspired the group to foray so widely into cinema exhibition?
It all started when we produced a movie in Kerala, and realised there were not many good quality screens to release it. We saw this as a business potential. This was also a time when old, single-screens were shutting down. We first started off with a 3-screen multiplex in a Tier-II area in Kerala. The response was very good and this became the starting point for our multiplex journey. It made good business sense to us as we were able to recover the costs in reasonable time and were able to charge reasonable ticket price although we were initially apprehensive if we would be able to do so in a Tier-II area! Gradually we expanded to other places in Kerala and South India. Pan India, there is immense potential for good multiplexes and we see great opportunity.
Give us a brief overview of the investors and stakeholder of the group.
Our group is held by a holding company called ABC (Asian Business Connection) by our Chairman Mr Shrikant Bhasi and some of our internal investors. We do not have any private investors from outside.
Your buyout of HDIL and Big Cinemas made big headlines in the industry. Tell us more about it.
When we were growing in this business, we realised that to be a noticeable player in the country one needs to have their presence in major metros such Mumbai and Delhi. But we would have had to wait for a very long period for malls to come up. That’s when we thought of acquiring existing operational facilities. It was good timing as HDIL, which has presence in major cities, was looking for selling off their multiplex division. That’s how our acquisition of 13 screens happened. Then came the bigger one — Big Cinemas’ 250 screens. Our aim of pan-India presence was beginning to materialise.
Carnival Cinemas has set 1000- screen landmark for year ending 2017. Are there any immediate plans of adding screens? Has Carnival done any structured research or market survey?
It’s a very ambitious mission. There are two ways of doing it of course – one is organic and the other is through acquisition. There are various issues in organic growth as the real estate growth in the country is not so impressive. We have been signing up for viable spaces in multiplexes. In case of inorganic / acquisition, we don’t see many opportunities for acquiring. This has prompted us to do some interesting research to understand the business potential. India produces the maximum number of films in the world, yet producers/distributers are forever complaining there are not enough screens to showcase films.
A large number of regional movies are made but of course Bollywood generates the major revenue. Last year’s major blockbuster Bajrangi Bhaijaan generated around INR 320 crore box-office collection with more than 3 crore people having watched the film in theatres. But in a country that has a population of 1.3 billion, when only 3 crore people watch the superhit film of the year, it only goes to show hat almost 98 per cent of the population did not watch the film. This is very surprising because cinema is considered to be a religion in its own right in the country. We further analysed and found that of the 98 per cent, almost 50 per cent people were unable to watch the film because they did not have access to cinema screens. These are people who live in Tier-II and Tier-III regions of the country. And we need to reach them. That’s when we started an internal project called ‘Jalsa’ to create entertainment zones to cater to smaller towns and cities. We started off with Madhya Pradesh and expanded elsewhere.
Please elaborate on the vision and mission of the company?
Our vision is to provide good quality movie-watching experience to everyone in the country. We want to make Carnival synonymous with cinema! And our mission is to accomplish this vision with team effort and the support of our stakeholders.
The market is dominated by several big, well-established players. How would you compete with them?
Location wise, we hardly have any competition. Our growth pattern is mostly in Tier-II and Tier-III cities, where there are no big players. At the end of the day, the content everyone offers is going to be the same but our main focus is to provide good service to our patrons.
What particular strengths and strategies do you bring to Carnival?
I would say the strength lies in setting up a good team. After all, the final execution is done by them. My biggest strength is to build a good team. In the last one year, we have gone in for many acquisitions, taking over screens which were not doing well earlier; we have succeeded in turning around with success. You need a good team to be able to do that.
In times of 3D and 4D, IMAX, Atmos and sophisticated ticketing processes, how is Carnival Cinema taking to the ever-changing world of technology?
This has been both a challenge as well as a benefit. Once you construct a multiplex, you cannot upgrade to new technology all of a sudden. But then wherever new properties are coming up, we are installing the latest technology. We are upgrading to new technology such as m-ticket wherein you can just walk in to watch the film without having to check in anywhere. We operate 327 screens at 126 properties in 92 cities, which is a very huge spread, and our primary target is to centralise the technology so we can control operations of every property from our head-office.
The industry is witnessing star megaplexes with 15+ screens. Does Carnival Cinemas have an such plans?
We are catering to Tier-II and Tier-III cities primarily and we are also very keen to set up such megaplexes in large cities where multi lingual movies can be released like Bangalore.
How different is Carnival Cinemas from others in the league.
Ambience wise, we are comparable with any other multiplex. But we have been cautious with pricing. Since we cater to Tier-II and Tier-III population, we do not want to charge our patrons exorbitantly; we want to go reasonable. Ours is the most reasonably-priced multiplex compared to other chains.
How much investment has the Group earmarked for cinema business? When do you think you would breakeven?
Considering the acquisitions and our own screens, we have invested close to INR 1000 crore. And the breakeven has already happened!
What is your take on the Cinema exhibition industry in India? In the last two years, almost 3000 cinemas have been shutdown. Contrastingly, in China alone, 5000 screens were added. In your opinion, where is India lacking?
It’s basically the shifting of the old, single-screen model to multiplex model. India had 18,000 single screens once upon a time, which have now come down to 12,000. We hardly had 50-60 multiplex screens and now we have more than 1000 multiplex screens. The single screens are shutting very fast because it’s more of a real estate issue. The real estate value has gone up so high that it makes no sense for single-screen owners to continue as standalone theatres. China, on the other hand, has been witnessing large real estate growth. In India, the infrastructure has not been growing so well.
India is the biggest producer of movies in numbers, yet producers complain they don’t get theatres to release their films. Can you throw some light on the scenario?
We need more and more screens to come up. The last time we released our Malayalam film Adi Kapyare Kootamani, which was a major hit, we would have done three times the business we did, if we have 200 screens to release in Kerala. It is all about the release and the initial
collections. The number of screens needs to increase in the country.
Do you think television and home cinema are threats to the cinema exhibition industry?
It’s not been a threat so far mainly because in India, new releases can be watched only in theatre.
How does Carnival Cinemas look at piracy issue in the country?
Primarily, the piracy begins outside the country. The moment you release the movie offshores, the film gets copied and that’s where the real piracy starts. Talking of India, in my opinion, the government needs to be much more stringent to save the cinema industry.