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Digital media platform: Existential threat to cinema exhibition businesses?

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Year 2013 marked the international calendar with a whopping 74 million registered internet users, thanks to a growing young population, urbanisation and upsurge of world-class quality education in India. The country bagged the spot of being the third largest internet operating nation in the world, after China and the US.
As reported by, the country then secured its presence in the same position with more than 243 million users and an annual internet population growth rate of 14 per cent in 2014. India is still way ahead of China and US, in terms of annual growth rate of internet users, which in turn, indicates a steep increase over the years in creating the future of internet more promising with new media gadgets such as iPads, mobile phones, laptops and the ease of accessing high-end applications on a digital device, which is evolving fast and morphing continuously with a significant pace.
This internet boom has led to the growth of applications that are high on technology and getting  lower on costing with every innovation. IAMAI and IMRB International project in a report that by the end of 2015, only mobile internet users in the country will touch 213 million. With these developments, the country has become one of the most potential app-based retail markets in the world. The smartphone revolution and mobile internet are the two crucial drivers behind this rapid growth of online population in India.
The Hotstar platform, owned by Novi Digital Entertainment Private Limited, with one of the most compelling catalogues ever offered on mobile and the web making, claims to be a complete video destination for consumers. The platform has been designed and purpose-built for one reason – to be the best video experience for TV shows, movies and sports, all at one destination.  It serves around 20,000 hours content spread across seven languages, which include 120+ full length TV shows, 500+ movies and LIVE screening of popular sports like cricket, football, tennis and kabaddi.
So will digital entertainment media, which includes online media interfaces such as Hotstar and Youtube, be impacting the cinema exhibition business in any way?
Nitin Sood, Group Chief financial officer and spokesperson, PVR Cinemas, forecasts that there is no potential threat to the major’s business, though technology is altering lifestyle habits. “Well, there is no second thought that technology is transforming the entertainment business in India. Yes, it is! And I feel it is for the betterment for all. New media gadgets such as iPads, mobile phones, laptops and the ease of accessing high-end applications like Youtube and Hotstar on a digital device brings with it an altogether new experience. So trying them is of course a good option,” he comments.
He adds, “The consumption of entertainment is way too large to tap. The cinematic grandeur and the experience a multiplex or a theatre render on the screen can’t be replicated on phone or for that matter on any other device. It’s a differentiated experience! We are fine with such applications and we have no competition with them. Ultimately we all offer media distribution platforms. These applications will continue to exist and we can only work towards maximising the value of content.”
While digital media interfaces will continue evolving, Sood is of the view that PVR’s business will be on an expansion spree, despite all deterrents. Not only does PVR have vigorous expansion plans in this fiscal but also targeting all parts of the country.
“We have planned to open 60-70 screens during the course of this fiscal. We are targeting all parts of the country from Mysore, Pathankot, Chennai, Bokaro to Noida and also the suburbs of Mumbai.”
On similar lines, SRS Limited’s SRS Cinemas, the cinema exhibition brand which only focuses on the tier I and II cities, is now on an expansion spree and is fast spreading its footprint across the northern, eastern and western cities of Bihar, Jharkhand and Maharashtra and is also targeting the country’s capital, Delhi. The company operates a chain of multiplexes, spread across 14 cities, including 19 properties at strategic locations with a combined strength of 54 screens and 14,160 seats.
Says Prateek Jindal, MD, SRS e-retail Limited, “The SRS cinema exhibition business revolves around tier I and II cities of India, where the demand for viewing quality cinema in a relaxed environ is rising, and so is the per capita income of general populace. The source of entertainment is limited to television and internet there, but SRS has primarily visualised to cater to the large group of people living in towns and cities as they are also big entertainment consumers and our growth drivers.”
On being asked about alternative media interfaces such as Hotstar, he notes, “For the time being, a keyboard can take a pen’s place, but things will eventually come back to the basics because the physical experience is irreplaceable.”
“For instance, Hotstar would show you content at a good speed with 3G and 4G connections availability. While one can download movies through torrents and DTH offering new movies within three-four days of their release and also listen to new songs on apps like Saavn and Hungama at low cost, can these take over the designated place of a cinema where the viewer’s world is transformed in a two hour movie, with Dolby digital surround sound and food that is being served at the seat, just on a call?” he asks.

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