OTT not a threat to cinema screens: Javier Sotomayor, MD, Cinépolis Asia
Javier Sotomayor says they plans to take their total count of screens in the country to 600 by 2022
Published - 22-November-2018
Mexican multiplex chain operator Cinepolis is looking to expand its business operation in the Indian market. It plans to take its total count of screens in the country to 600 by 2022 from the current 348. The company operates in 17 countries and India is its second largest market after Mexico.
exchange4media caught up with Javier Sotomayor, Managing Director, Cinépolis Asia, to talk about the challenges that they are facing in expanding the business, its brand strategy and more.
What is the current revenue that Cinépolis generates in India and how is the business in other regions?
We have been present here for over 10 years and have been able to achieve the third place in the Indian market, which we believe is quite commendable. Out of the 17 territories in which Cinepolis operates, India is second, in terms of attendance, after our home market Mexico.
Cinépolis plans to increase its screen count to 400 by the end of December. How will the company do it?
Five years back, we set the target of opening 350 screens. Initially, it sounded unbelievable, but we were able to achieve it. Some new multiplexes are ready to open in Bengaluru and Bhubaneswar and we are waiting to get licences, which will help us get closer to our target. We are planning to end the year with close to 400 screens. We have already set another target to open to reach 600 screens by 2022.
As per the strategy, we are tapping opportunities in tier III markets, apart from metro and tier II. People are now eager to consume high-quality entertainment even in tier III cities. We are continuously trying to provide best cinema experience to our customers.
The brand is facing issues in expanding its business in tier cities. What kind of challenges are you experiencing?
The pace of development of shopping centers in India is posing to be the main challenge. With such high prices of real estate in India, it is not efficient to invest on standalone cinema in India. So, being a part of the shopping centre is the ideal combination. We believe that the growth of shopping centers will be faster in the years to come and this will help us grow faster as well.
In China, cinema has developed tremendously. China has more than 50,000 multiplex screens while India has approximately 2,500. The number is 20 times bigger than India. In terms of cinema exhibition industry, India has a lot of potential. The potential of growth that India offers is unmatchable with the world.
What kind of a strategy works for the brand?
Ever since we landed in India, we set a target to grow in the top 60 cities in the country and we have followed that strategy all over and we will continue to do so. If we take into consideration only those 60 cities, it’s still severely under-screened. We still see a lot of potential in those cities. Needless to say, those 60 top cities in India will include metros, mini metros, and tier 2 & 3 cities. We have not deviated much from that strategy.
We will continue to push on organic growth, which has been our default strategy, and look at organic opportunities that may happen in future -- small regional players or single owner multiplex that we can take over. We will continue to explore those opportunities as well.
With the arrival of OTT platforms and the digital revolution in India, the number of movie screens is declining. How would you like to address the whole crisis?
They are two completely independent things. Yes, the total numbers of screens has been declining, but it’s a biased fact. The numbers of screens in total has declined a little but the number of multiplex screens has been growing at a very high pace; in almost double digit. Number of single screens has been declining. In fact, in the rest of the world, screens have almost vanished completely. In the other 16 countries that we operate, there are no single screens.
We are keeping a close eye on OTT, but have not seen a consistent decline in the cinema exhibition industry in any of the countries, not even the most mature ones. OTT is a new product being offered to the Indian audience. Penetration in India is still low. Even in the US, where OTT has the highest penetration, almost 1/3rd of the households use OTT services and consume streaming content. Even there we have not seen a decline in the cinema exhibition industry. And that’s mainly because the content of the two mediums is different.
We believe that OTT is here to stay, but we are confident that cinema exhibition will continue to survive and exist.
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How challenging is it for a brand to stay ahead of competitors?
It's full of challenges. We believe in the core values of the brand. Competitors make us stronger and better. We are very confident that we have been able to project our brand as a strong player in India. We offer one of the best customer services and customer experiences.