HALLS AND MALLS : The Rise of Multiplex Theatres

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The Washington Post claimed in 2015, “No one likes malls anymore” based on its analysis of foot traffic at major American malls and the rise of online retail. The Business Insider magazine published a list in 2017 titled “Why you don’t see malls anymore”. The Forbes magazine came out with an article in 2019 effectively claiming that malls were dead and suggesting alternative uses for the grand and [now] empty buildings. But even as malls in major global cities are fading into memory, they are still alive and well in Nepal. In fact, over the past decade, they have thrived and are now an integral part of the Nepali urban life. So what do our malls have that is keeping them relevant even as their international counterparts fall victim to online commerce and public apathy?

“Multiplexes,” answers Roshan Adiga, chief executive officer (CEO) of Team Quest, parent company of QFX cinemas. “Multiplexes are a hook that attracts people to the mall, and this contributes to the other businesses operating there as well.”

“Multiplexes bring people to the malls and once they are there, they look around, shop, and play games. Even the parking helps the malls make money,” states Ram Hari Koirala, administration head of FCube Cinemas.

“Cinema halls are indispensable to malls,” shares Mohan Saraf, chairman of Biswojyoti Cinema Hall.

The data with the Film Development Board (FDB) paints a similar picture. Of the 14 multiplexes opened in the fiscal year 2018/19, eight were in malls.

These ‘malls with halls’ are especially visible in Kathmandu Valley where three new cinema halls were opened and all of them are in malls – the three-screen Regal Cinemas at Bhatbhateni Supermarket in Bhaktapur, two-screen One Cinemas at Eyeplex Mall in Baneshwor and Chhaya Cinemas at Chhaya Centre in Thamel.

Revisiting the Evolution of Multiplexes in Nepal
Till the 1990s, Nepali cinema goers could only choose between an array of single screen theatres to satiate their movie appetite. Jai Nepal, Kumari, Gopi Krishna, Vishwojyoti and Manakamana were the major cinema halls in operation. These halls were celluloid-based exhibitors and widely popular among movie audiences of the day.

But everything changed in 2002, when Team Quest acquired and digitized Jai Nepal Hall. The move proved a hit and in 2004, the team bought Kumari Hall and relaunched the erstwhile single screen cinema as a multiplex with two screens.

At the same time, the Reliance Group of India opened its three-screen Big Cinemas at the City Centre. This was later renamed as Big Movies. With Team Quest and Reliance proving that multiplexes could operate profitably in the country, various other companies entered the field and there has been no looking back since.

Multiplex Brands
Team Quest has by far been the most successful in branding its chain of multiplexes. Its QFX Cinemas is an iconic brand among Nepali cinema halls – single screen or multiplex.

And according to CEO Adiga, this brand, too, is related to malls. “We developed the brand QFX only after we started the Central Cinemas at Civil Mall in 2008,” he said. Today, QFX is a recognizable franchise all over Nepal. It operates 12 multiplexes all over the country stretching from Jhapa to Nepalgunj, many of them located in malls. In fact, of its five multiplexes in Kathmandu, three are located in malls, namely Civil Mall, LABIM and Chhaya Centre.

Reviving Old Halls in New Malls
The 64 years old single-screen Viswojyoti Hall is now being revived as multiplex Viswojyoti Cinema with its home at the Biswojyoti Mall, Jamal. “We invested nearly Rs 74 million in establishing the mall and are now housing our revamped Viswojyoti Hall in it,” informs Riwaz Singh Saraf, managing director of the cinema. The whole process of revamping and reintroducing Vishwojyoti Cinema will be handled by Saraf’s sons Roshan and Riwaz Saraf.
“Having our relaunced cinema in our mall will enable us to deliver a complete package of entertainment and services,” says Riwaz.

Advancing the Movie-Going Experience
Going to a cinema hall today is not only limited to watching movies. It is about experiencing the whole atmosphere. That is why multiplex brands are bringing technologies like Dolby Atoms sound system, recliner seats, RGV lighting, 2K and 4K projection. It is about raising the standards and giving the audience much more than simply the movie they came to watch. That is why amenities like food courts, gaming stations, lobby etc are as much part of the modern cinema hall as the screening room.

Food Business in Malls
Cine De Chef (CDC) is the first multiplex to operate an institutional food business alongside its theatre. It has its own kitchen, a spacious Cine Dine Bar and Lounge and offers Nepali and international cuisine.

“Our food business alone generates around Rs 3.2 million a year,” informs Pawan Shakya, manager of CDC, “Couple that with ticket sales and our annual turnover reaches Rs 6 million to Rs 8 million depending on the film.”

According to Shakya, CDC prides itself on a quality fine dining experience to rival that of any five-star restaurant.  “Our customers can even order from inside the hall while watching the movie,” Shakya says, “Our cine-hostesses bring the orders to the customers inside the theatre so they can enjoy their meal while watching the movie.” CDC’s clientele, past and present, include Himani Shah, the former princess, and many other ministers and ambassadors, as informed by Shakya.

Challenges
Multiplex operators cite tax as the biggest hurdle to their business. A total of 33 percent tax, including 13 percent VAT, 15 percent FTT and 5 percent entertainment tax, is levied on multiplexes.

“Out of the remaining 67 percent, 15 percent goes to the film producer or distributor and a separate tax of 25 percent is collected by the local government,” exclaims Rakesh Shrestha, theatre manager of Q’s Cinema. “So, we cannot operate at an occupancy rate of lower than 30 percent.”

Likewise, Sharaf also shares, “We have to pay an exorbitant 30 percent custom on importing equipments for our halls. This is in addition to taxes for land and property which is almost double what it used to be.” He argues that all of this weighs heavily on the finances if multiplex operators and makes it difficult to sustain operational and maintenance costs and salaries.

The Future
The future holds potential for the cinema hall business because of a growth of middle-class customers who prefer watching movies at multiplexes and are able to pay the ticket prices. Services like online booking, discounts, and special shows are also helping bring people to theatres. Furthermore, multiplexes are moving out of the capital so their market is also expanding. So multiplex operators agree that the future looks promising. 

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