UFO’s targeting 2000 screens to explore new revenue models. By pallavi srivastava
Karvi – a
cinema hall in the obscure Chitrakut district of UP – today boasts of a weekly collection of Rs.30000-40000 (900% higher than what it use to earn a few months ago), which is no less than a dream turned reality for its owner Ramesh. With almost watery eyes he confided to 4Ps B&M, “I could have never imagined ‘house full’ signs in front of the ticket window of my cinema hall. But thanks to UFO Moviez’ digital platform I get first day first show release of movies which earns me 100% occupancy many times a week,” adding that he still recalls those days when he had been unable to run a show simply because there were no audiences. “Thankfully those dreadful days are over forever,” he grins. The phenomena is not restricted to only Karvi, but also others in small town and metro India. Waver theatre in Bulandshehar, Menka theatre in Mehboobnagar of AP, Amber Cinema in Rajkot, Seble Cinema in Delhi… almost all of them have an identical story to narrate.
UFO Moviez, arguably the largest digital cinema service provider in India, has worked out a business model in which they convert a traditional theatre into digital (by installing the digital projector) at their cost and earn revenues through a pay-per-show model. The cost of converting a theatre comes to around Rs.14 lakh which is borne by UFO. For revenues, they charge Rs.200 per show from the distributor and Rs.250 per show from the exhibitor, across consequent weeks of the film’s screening. “The theatre owner is completely at ease he is not bothered whether the projector is failing or the server is failing… I am taking care of all this. I have taken the entire headache of cost and investment from the exhibitor and tried to make it very simple for him,” reasons Rajesh Mishra, CEO, UFO Moviez.
In as much, UFO has simplified the processes for exhibitors, distributors and filmmakers. But, does this not involve heavy investments for UFO. “I spend Rs.14 lakh for setting up a digital system in a theatre. I charge the exhibitor on per show basis even if he uses my platform for all shows every week. I still recover my cost in six years,” counters Rajesh. He further explains that right from day one UFO was clear that their business was a volume game and could not be played unless they were present in larger numbers. The company is now betting on touching the mark of 2000 digital screens across the country (currently they are 1040 screens in India and 18 screens internationally) with an estimated investment of Rs.500 crore.
Ananlysts are unanimous in their view that this volumes game will benefit the industry in a big way. “The day a film gets a 1500-2000 theatre release (through digital cinema) one can say that digital cinema has truly arrived in India. A 1500 theatre release will complete the entire commercial cycle of the film in two weeks. In such a scenario one will need not to wait for eight months to recover the money,” says an media analyst. Sample this: when OSO was released in 500 digital theatres of UFO, all were first day first shows, allowing each theatre to make collections worth Rs.2 lakh. If OSO goes to a theatre after six months – as is the case in many small towns – the collection will be Rs. 20,000. “So the immediate benefit comes to Rs.1.8 lakh, which means extra business to the producer, distributor, exhibitor and the government (in terms of higher ent. tax) too,” offers Rajesh.
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist).
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Karvi – a
cinema hall in the obscure Chitrakut district of UP – today boasts of a weekly collection of Rs.30000-40000 (900% higher than what it use to earn a few months ago), which is no less than a dream turned reality for its owner Ramesh. With almost watery eyes he confided to 4Ps B&M, “I could have never imagined ‘house full’ signs in front of the ticket window of my cinema hall. But thanks to UFO Moviez’ digital platform I get first day first show release of movies which earns me 100% occupancy many times a week,” adding that he still recalls those days when he had been unable to run a show simply because there were no audiences. “Thankfully those dreadful days are over forever,” he grins. The phenomena is not restricted to only Karvi, but also others in small town and metro India. Waver theatre in Bulandshehar, Menka theatre in Mehboobnagar of AP, Amber Cinema in Rajkot, Seble Cinema in Delhi… almost all of them have an identical story to narrate.UFO Moviez, arguably the largest digital cinema service provider in India, has worked out a business model in which they convert a traditional theatre into digital (by installing the digital projector) at their cost and earn revenues through a pay-per-show model. The cost of converting a theatre comes to around Rs.14 lakh which is borne by UFO. For revenues, they charge Rs.200 per show from the distributor and Rs.250 per show from the exhibitor, across consequent weeks of the film’s screening. “The theatre owner is completely at ease he is not bothered whether the projector is failing or the server is failing… I am taking care of all this. I have taken the entire headache of cost and investment from the exhibitor and tried to make it very simple for him,” reasons Rajesh Mishra, CEO, UFO Moviez.
In as much, UFO has simplified the processes for exhibitors, distributors and filmmakers. But, does this not involve heavy investments for UFO. “I spend Rs.14 lakh for setting up a digital system in a theatre. I charge the exhibitor on per show basis even if he uses my platform for all shows every week. I still recover my cost in six years,” counters Rajesh. He further explains that right from day one UFO was clear that their business was a volume game and could not be played unless they were present in larger numbers. The company is now betting on touching the mark of 2000 digital screens across the country (currently they are 1040 screens in India and 18 screens internationally) with an estimated investment of Rs.500 crore.
Ananlysts are unanimous in their view that this volumes game will benefit the industry in a big way. “The day a film gets a 1500-2000 theatre release (through digital cinema) one can say that digital cinema has truly arrived in India. A 1500 theatre release will complete the entire commercial cycle of the film in two weeks. In such a scenario one will need not to wait for eight months to recover the money,” says an media analyst. Sample this: when OSO was released in 500 digital theatres of UFO, all were first day first shows, allowing each theatre to make collections worth Rs.2 lakh. If OSO goes to a theatre after six months – as is the case in many small towns – the collection will be Rs. 20,000. “So the immediate benefit comes to Rs.1.8 lakh, which means extra business to the producer, distributor, exhibitor and the government (in terms of higher ent. tax) too,” offers Rajesh.
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist).
Read these article :-
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus
ZEE BUSINESS BEST B SCHOOL SURVEY
For More IIPM Info, Visit below mentioned IIPM articles.
1500-plus IIPM students placed across the country with 44 bagging international offers
IIPM set to beat economic slowdown
IIPM, GURGAON
IIPM - Admission Procedure
IIPM awards four Bengali novelists
The Hindu : Education Plus : Honour for IIPM
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Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...
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Deccan Herald - IIPM ranked as top B-School in India
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