NEW DELHI: Large mall developers plan to shrink multiplex spaces in their future projects as cinemas no longer attract big crowds and generate enough revenues throughout the year.
Multiplexes used to generate 10% of the footfall of a mall, which has reduced to 6-7%, forcing the developers to rethink the strategy, industry executives said.
“With alternate forms of entertainment, we are looking for rationalising cinema space in the mall,” said Sriram Khattar, vice chairman and managing director, rental business, at DLF.
Multiplexes pay a minimum guarantee amount to mall operators every month and share revenue. In 2023, they were able to breach the minimum guarantee threshold in 8-9 months, but this year they have managed it only in 4-5 months.
“In Southern India, cinemas still fare better than other parts of the country because of four regional languages,” said Muhammad Ali, CEO, retail, at Prestige Group. “Having said that, we still have to rethink the space allotted to multiplexes as competition from OTT has led to a decline in occupancy level. The share for entertainment and gaming and F&B is going up as people are focusing on experiential retail and physical activity.”
In a mall, 10% is occupied by cinema and 10% by food & beverages brands while about 5-6% was occupied by entertainment and gaming companies.
The dynamics are, however, changing for future projects.
“In our future malls, space for cinemas is reduced to give that space to other revenue generating businesses. Lack of content is the biggest reason for cinemas not being able to be the crowd puller they used to be,” said Harsh Vardhan Bansal, cofounder of Unity Group, which operates half a dozen malls in Delhi and Punjab.
