Sunday, 10 March 2013

SLOWDOWN IN REAL ESTATE PATNA EFFECTS BOLLYWOOD AND OUR OWN BHOJPURI FILMS.

Cinepolis Multiplex Patna

 The slowdown in the real estate sector in Patna has cast a shadow on Bollywood as fewer multiplexes are available for distribution of films, indirectly affecting the box office collection of new releases in Patna. It indirectly also troubles the Bhojpuri filmmakers as it means less single screen space for them as Hindi movies compete with them for the single screen space in Patna’s cinema halls or Talkies. Though, most of these cinema halls in Patna are on the verge of being a part of History.
Multiplexes, the one that Patna has is in P & M MALL; rake in a major share of a film's total collection and almost 90 per cent of these multiplexes are housed in malls in our country, attracting huge footfalls. With the delivery of malls across Patna being delayed by a couple of years, Bollywood lost out on additional multiplex screens which could have garnered more revenue to the industry.
Growth in multiplex screens does make a significant difference to the collections of movies today in our country. For example, the average collection from multiplex screens for two blockbusters last year was Rs 5 Lakh per screen for Rowdy Rathore and Rs 6.5 Lakh per screen for Barfi in the country. So, if another 50 or 100 screens were available, one can safely assume that collections would have jumped by Rs 1.5 crore for Barfi and Rs 3 crore for Rathore, even if 60 per cent of these screens were allocated to one of these films. This is the huge potential of multiplexes that Patna too can offer to film distributors with more malls coming up in Patna. 
The slowdown has hit the malls the hardest as builders have shifted focus to the residential sector, where the returns are better. Developers are not constructing malls as they are not economically viable and have longer gestation periods. Residential prices, on the other hand, rise faster. The supply of multiplexes is going be one of the biggest constraints.
This means that for multiplex players, land or rentals which constitute 10-15 per cent of their costs may also rise. Currently, about four players  PVR, Inox, Big Cinemas and Fun control close to 950 multiplex screens of the total 1,200 operational in our country. Indeed, the real estate slowdown has affected the expansion plans of foreign players too. India has the possibility of opening 100 screens a year, but only 20-30 per cent of that is happening right now. Patna too represents the same scenario.
Both viability and growth have been hampered in Patna because many properties in Patna that the multiplexes had signed have not become operational. With only few malls expected to come up over the next three years, things will become tough for the multiplex.
Construction and borrowing costs have risen for developers in Patna. Further, the returns from shopping malls are less in comparison with residential properties. Developers in Patna have deferred their projects by a year or put them on hold until the retail market revives. Also, many retailers have deferred their expansion plans in Patna.
The more serious issue is in Patna where the slowdown has impacted business far more, which in turn, will affect the plans of multiplexes since they would have liked to tap the potential of Patna. It is a bit of an irony that films are now ready to be released on a wider platform, thanks to digitization efforts, but the availability of quality cinemas to screen these films has been impacted by the slow growth of malls in Patna and other urban centers of Bihar.