In this Industry Spotlight with Creative First, Kapil Agarwal, Founder – Buxaout Advisory LLP. joined Lohita Sujith, Sr. Director, Copyright & Digital Economy, Motion Picture Association. As the past Joint Managing Director of UFO Moviez for more than 13 years, Kapil shared his rich and diverse industry experiences.

He began by naming digitization as one of the biggest evolutions in cinema. Before that, he explained, a blockbuster would release with 500 reels, and it was hard to meet surges in demand in a timely manner due to printing times. But when digitization came into play, movies could be distributed by satellite and  advertising became a significant stream of revenue Once the films were digitized, advertising contracts became pan-India rather than theatre to theatre. On post-pandemic changes in the cinema industry, he focused on consumer behavior, pointing out that presently people only go to the theatre for the best content which they don’t want to wait for, or for experiential content like Avatar. Due to change in consumer habits, Kapil asserted that the industry will have to continue to change, and films targeting theatrical success will have to incorporate new technology as it emerges.

On the subject of low screen density in India, he mentioned that majority of cinemas are still located in metros and that in his estimation, 15,000 new screens could be added to smaller towns across India so long as tickets are priced at a point affordable to the local market. He suggested a franchise model could be a successful option to consider.

However, investor sentiment is low as the industry is over-regulated and requires a single window clearance at the state level. Needing 30-40 approvals to open a cinema is a prohibiting factor.  On plans to modernise cinema technology, he is working on an ambitious project to help cinemas replace their older generation projectors with the latest. He said that 140,000 projectors across India are on the verge of becoming obsolete.

Kapil wrapped up the conversation by reiterating the need to bring affordable cinema via franchises to the rural areas as the most important component to assure future growth in the cinema business in addition to market friendly policy and regulations that facilitate ease of building cinemas.