Case - INOX

INOX - Mini Case
The ₹ 3000 Cr. Indian film industry has come a long way from being a regional and proprietary
industry to becoming a professional and corporatized industry with global ambitions. However,
the Indian film exhibition industry, i.e., movie theaters did not change much -- until recently. A
majority of the theatres lacked modern equipment that could screen movies with good pictures
and sound quality. Apart from this, their dull ambience and poorly planned seating arrangements
killed the pleasure of viewing a movie.
However, the traditional Indian theatres are now facing tough competition from newly developed
multiplexes that are providing the customers with a better movie viewing experience. India’s first
multiplex, PVR Anupam, was set up in South Delhi in 1997 as a joint venture between Priya
Exhibitors and Australian company Village Roadshow. (Priya Exhibitors later bought out Village
Roadshow’s stake in the venture). At present, India has 100 multiplexes and the major players in
this market are PVR, INOX, Cinepolis, Satyam Cineplexes, and Shringar Films. However, INOX, a
relatively new entrant in the exhibition business, is expanding aggressively to have a pan India
presence. INOX forayed into the multiplex business in 1999. In the first phase, its major focus is to
cover the Western region at an investment of ₹ 175 Cr. It opened its first multiplex in Pune in 2002
and at present, has five properties in the cities of Pune, Vadodara, Mumbai, Goa, and Kolkata.
These multiplexes are designed based on international standards and oﬀer shopping and food
facilities apart from the movies. On an average, each multiplex has 5-8 screens. Each theatre is
equipped with state-of-the-art cinema viewing equipment. The theatres have a Dolby Digital EX
surround system DTS sound Format audio systems and JBL speakers. They also have fully
automated Christie projection and looping facilities. The company has installed Harkness Hall
Perlux screens that provide high picture quality and generous viewing angles. Each theatre is
provided with wall-to-wall stadium style seating arrangements.
The multiplexes have shows from 10 A.M. to 10.30 P.M., with 12 shows being run on an average
in a day. The shows are timed in such a way that a new show starts every half an hour. Each
theater has a seating capacity ranging from 170-520 seats. INOX has tied up with Barista and
McDonald’s to put up food stalls at the multiplexes. The company also has its own food counters
called ‘Refuel’, which oﬀer various food products. These multiplexes have a games section as
well.
INOX also tries to provide the best service alongside these facilities. The ticketing process is
computerized. Customers can also get their tickets at their doorstep by booking them online.
Besides, INOX provides the option of booking tickets through SMS. The tickets are priced at a
premium ranging from Rs 100 to Rs 200 for three seating levels, Executive, Club, and Royale. The
company adopts a flexi-pricing model where the ticket prices vary depending on the demand for
the movie and the timings of the show. For example, tickets for a morning show are priced lower
than those for an evening show. Likewise, tickets during weekdays are priced lower than those for
the weekends.
INOX considers the venture a success and claims that INOX Pune is witnessing an occupancy
rate of 65%. INOX shot into limelight when it bagged the contract of constructing a four-screen
multiplex (the venue for 2004’s International Film Festival of India (IFFI) in November) for the Goa
government in a nationwide tender.
INOX expects a Rs 600 mn turnover by the end of 2005 and has set a target of Rs 1.4- 1.5 bn by
the end of 2006. It has an ambitious plan to set up multiplexes in cities like Bangalore, Chennai,
Hyderabad, Kochi, and Allahabad in the second phase at an investment of Rs 1 bn. INOX
develops properties in two ways -- it develops the multiplexes on its own, leasing some of the
space to other retailers, or it takes the space on lease in an already developed shopping mall.
While INOX owns the multiplexes in Pune and Vadodara, the multiplex in Mumbai is located in
space leased from Cross Roads 2 shopping mall. INOX also plans to take some space in the
shopping mall proposed to be developed by the GVK group in Hyderabad. This mall is scheduled
to be fully functional by June 2005.
Questions for Discussion:

1. How will the supplementary services help INOX in attracting customers and increasing its
revenues?
2. Setting up world class theaters require huge investments in land, building, machinery, and
manpower. How can a multiplex leverage on these assets to provide value-added services and
promote them to movie viewers?

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INOX - Mini Case

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