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Glitz Cinemas to pump in Rs 30 cr for expansion

25-November-2011
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Glitz Cinemas to pump in Rs 30 cr for expansion

As the metropolitan consumer becomes choosy and aligns itself to particular brands, more and more marketers are eyeing the untapped potential in the smaller markets. These markets not only give new followers to brands but also present them an opportunity to be the prime mover for many experiences here.

Looking at the opportunity and utilizing it to full advantage, Stargaze Entertainment, a film exhibition company already operating chain of multiplexes under its brand ‘Glitz Cinemas’ in emerging cities of India has planned to add 28 new screens by end of March 2013. The company, that has been invested in by Capital18, the VC arm of Network18 group, plans to infuse 30 Crores to carry out the expansion. The new screens are being planned in the cities of Muzzafarpur, Raipur, Yamunangar, Jaipur, Kota, Raigarh, Bhilai and Bokaro.

Speaking on the expansion plans, Sumant Bhargava, MD, Stargaze Entertainment, said, “Our expansion plans are in line with our vision to deliver international cinematic experience to smaller cities of India which do not have quality cinema infrastructure. The market has huge growth potential and with upcoming retail infrastructure in these cities, we hope to sustain our current growth rate and also consolidate our market position by March 2013.”

Stargaze currently operates 22 screens across 8 locations, particularly in North India. With addition of 28 screens, it will have 50 screens across 15 locations covering almost 350,000 sq. feet of retail mall space and reaching 5 million captive customers.

Speaking on the strategy behind choosing only the Tier 2 Tier 3 cities, Sumant adds “The cities we are going to either have no multiplexes or have one at the most, so we would have a monopoly. We may have competition in future but then we are making sure that Quality is not compromised at any of our cinemas, to ensure loyalty. Our cinemas in these cities would be in no ways inferior to our cinema in Delhi. All the services, screens, even the food served will be of the highest quality.”

The prime mover advantage has also ensured that the company has to spend very less on marketing and advertising. Barter system rules as the entertainment options are limited and everyone wants to tie up with the only form of entertainment available. But the proposition also has a flipside to it, explains Bhargava “We spend very less on marketing activities. Our promotions usually happen on radio or local publications. Since our audiences are the same, our communication also acts as content for them, for example we do Movie Reviews on local radio station. When you are the only form of entertainment, people are very keen to partner with you. But while we spend very less on marketing our advertising revenues are also very less unlike big multiplex chains in metros.”

Apart from the prime mover advantage, the growth story of business in these cities is also quite impressive, explains Bhargava. He adds “When we started, if I take Kurukshetra as example, we could pay INR 2 lacs per month to a distributor or producer. Today, we can pay as much as 10 lacs per week to them. So in just two years it has quadrupled. And it is not only the ticket prices, the number of admission are also growing a lot more than Delhi or Mumbai. While our overall business from cinemas has grown by 15 to 24%, admissions have seen 12-14% Incremental growth every year.”

Unlike common perception that the price points in these cities have to be kept less, Bhargava counters that the consumers in these cities are ready to pay ticket prices of 35-400 rupees for premium experience. Glitz Lounge that offers the ubiquitous Gold Class experience with flat-bed recliners & personalized service and Glitz 3D that offers an unmatched 3D movie-viewing experience are also doing well in these markets.

Stargaze does not have any agency tie ups as yet and handles both creative and media in-house.

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