"Multiplexing" aaj kal!!!

After a bumpy ride of the industry in previous few quarters, the multiplex companies are now desperate for a box office hit. Starting with the IPL season 1 in 2008, the occupancy levels are moving south wards. The recent dispute between the Bollywood producers and multiplex owners on revenue sharing , has resulted a very sharp decline of occupancy to as low as 15-17% in Q1FY10 in comparison to around 35-40% in Q1FY09(which was then considered to be a poor occupancy level due to IPL 1).IPL season 2 and the economic recession have made the industry jump out of the frying pan, but only in to the fire.

Settling down of the dispute and the end of IPL 2 hav'nt bought back the shine yet. None of the movies in the recent past has been successful at the box office. With such a back drop, multiplex companies have built very high hopes on the movie "Love aaj kal" which is hitting the screens on friday. This is very evident from the following numbers, which are few of my observations. Though limited to bangalore, they are quite surprising and will let us understand the whole scenario.

There are 7 multiplex theaters in bangalore , including a new one by Fame cinemas which is going to start from friday at Forum value mall, Whitefield(and excluding innovative multiplex and vision cinemas, which doesn't deserve to be called so!!!).

On this week end, these 7 multiplex theaters put together are playing the new release "Love aaj kal" for 234 times. Yes... 234 shows in 3 days. New fame cinemas-Forum value mall is at the top, playing 51 shows (17 per day) followed by Inox(Garuda mall),Fame lido and PVR with 39 each. And this is just about Bangalore.

Same way, a regional telugu movie "Magadheera"(whose budget is over Rs.45 crore and is releasing on friday in over 1200 theaters accross 14 countries) is going to be exhibited in 46 theaters in Hyderabad with a highest of 16 shows a day at Prasad's IMAX.

Movie production is also an area which is drawing the attention of BIG boys. This is not just limited to Bollywood but is crossing the shores. After UTV productions, Big names like Anil ambani and Ranbaxy's ex-chief Malvinder singh seems to have great interests in hollywood film production. Anil Ambani's Big Cinemas has already struck a deal with Spielberg's Dreamworks, to invest close to Rs.1000 crore and to roll out around 20 movies in next 3yrs. On the other side, the bollywood actors have started producing films themselves including shahrukh, Aamir khan and more recently Saif.

Without "LEFT"... on a right track???

In the second innings of its government... UPA is on the right track, carrying forward the reforms... Despite the left's agreement for disinvestment of loss making government sector undertakings, UPA had not stepped forward on this front in it's last tenure...Government received only Rs.6701.49 crore from divestments during 2004-08, in comparison to Rs.26424.34 crore during 2000-04 in NDA's tenure.

Now, with a strong and better position in UPA, Congress has no excuse for not moving forward. However, the FM has already requested seven ministries including Telecom, Mining, Power, Commerce, Aviation and Coal, to submit proposals on disinvestment. Coal india limited, the largest coal mining entity in the world and the one which accounts to nearly 45% of the national electricity production, is in relatively advanced stage for disinvestment through IPO and is set to raise around Rs.6000 crore from a sale of 10% stake. Even other CPSE's(Central Public Sector Enterprises) are most likely to take the IPO way for divestment.

In my view, they should even consider the options like strategic sale and PPP(Pubiic private partnerships), which would also enhance the managerial and technical capabilities along with the financial benefits. In an IPO scenario, the investors are mostly concerned about the financial outcomes, i.e., the earnings part. where as in the other scenarios, a profit making private enterprise would actually look it from the operational perspective and would concentrate on enhancing the operational and technical efficiencies of the CPSE's. The reason for success of the CPSE's would then change from "MONOPOLY" to the "COMPETENCY"... which is more sustainable.

It would be a better idea for government, to roll out the divestment plans in phases... keeping in mind, the absorption capacity of the market. I mean, If all the IPO's are rolled out in closer time periods, the individual investors could prefer these to IPO's of India Inc. (as safer options, given the weaker investor's sentiments)... and as a result, MF's and IPO's of other private corporations would be left out with lesser no. of investors, making it difficult for them to close the IPO's successfully.

I liked it when pranab said, "Higher involvement of private entities is the most important reform he is planning to bring" as response to a question.

Let's see how "HIGHER" can he take it to...

Lets hope for no more political dramas like singur...
and for a matured and collaborative approach of political and corporate entities.