If someone still believes that the cinema business is on the verge of collapse, then he should look at the level of investment being made by different entertainment companies, like Super Cinema, in establishing state-of-the-art multiplex cinemas. This could be enough to change perception.
At present, around 100 new multiplex cinema houses are either under construction or in the pipeline all over the country with investment estimated at Rs10 billion. Of these, 13 new screens (cinemas) will be installed by Super Cinema with an investment of over Rs1 billion.
Super Cinema Founder-entrepreneur Ramzan Sheikh, however, believes that the cinema business is still in its infancy despite lots of development aimed at replacing traditional cinemas with multiplex screens in recent years.
“We entered into this business not only to make profit, but also to provide people with quality entertainment and revive the overall film industry,” says Sheikh in an interview to The Express Tribune. “I believe the industry will soon become profitable and contribute handsomely to the country’s economy.”
Established in 2012, under the umbrella of Mainland Group Limited, Super Cinema is expanding its footprint rapidly. In about two years, the company is running eight cinemas.
The group, which is also operating the Royal Palm Golf and Country Club, is well aware of the changing trends and ways to capitalise on them and set up profitable ventures.
It simultaneously established an entertainment company named Summit Entertainment to handle the distribution of films, since the success of these cinemas depends on Hollywood and Bollywood content.
The group later entered into the production segment, though not fully, covering all sides of the industry in a bid to become self-reliant in domestic film content at least.
“The success and growth of the cinema business will depend on domestic films in the future; investment in all three segments will help us produce local quality films, a thing which gives a boost to the overall industry,” says Sheikh.
The cinema industry got a real lift after the removal of the ban on Indian films in 2007. Apart from this, the Punjab government, following the 18th Constitution Amendment, is encouraging private investment in the neglected industry and supporting efforts to remove hurdles in the way of growth, adds Sheikh.
Investment and financing
The group got into the business with an initial investment of Rs500 million. Construction of a multiplex cinema costs between Rs25-Rs50 million.
It has so far pumped Rs300 million into cinemas and invested the rest in the distribution and production areas. It employs over 200 people and the expansion drive will add 500 more employees.
The group is equally financing quality films on a contract basis to cater to the needs of the industry. The cost of producing quality films, according to Sheikh, ranges between Rs5 and Rs50 million.
The upcoming 13 cinema projects worth over Rs1 billion in cities like Multan, Sialkot and Lahore will also include food courts.
Sheikh believes that the modern cinema is incomplete without food courts and play areas for children. The group is also investing in quality food courts along with digital/3D screens and is trying to establish it as an allied business.
“Traditionally, on spending of every Rs100 in a cinema, Rs20 is on food, while in multiplex cinema the ratio is 70-30, and if screens and food courts are excellent then the ratio becomes 50-50,” he says.
“We are injected capital in quality food courts to adopt this as an allied industry and achieve maximum ratio.”
Published in The Express Tribune, February 3rd, 2014.