A dance scene from Guru (Mani Rathnam, 2007)
A mishmash of comedy, fantastic stunts, car chases, and romance.
Tar e zameen par: Disney bought the home video rights for this film which debuted Aamir Khan as a director.
This major Bollywood production-distribution company entered the U.S. market in the 1990s by setting up offices to exploit the vast market of South Asians who are hungry for good quality entertainment from home.
Single screen Shanti Theater, Chennai, ‘A’ Center. Photo: M. Pendakur.
Single screen theatre in a ‘B center. Photo: M. Pendakur.
Prints take a long time to arrive in a rural area and are not in good condition.
Setting up large projection reels in a rural area. From Bollywood Dreams by photographer Jonathan Torgovnik.
Forum Mall, Bengaluru with PVR Cinemas. Photo: M. Pendakur.
PVR Cinemas at Forum Mall, Bengaluru, Photo: M. Pendakur
Luxurious seats at PVR multiplex, Bengaluru.
Gold Class seating: waitresses dressed like stewardesses serve food and drink.
Going to the mall provides a family outing. ...
"My kids love movies, there is a gaming zone for me, and my wife indulges in shopping."
Planned are Cine Diners with gourmet food.
PVR’s Director’s Cut Theater, Delhi.
Lido Cinema in Mysore showing a Kannada film. Photo: M. Pendakur.
Shalimar Theater, Mysore. Photo: M. Pendakur.
Ajit Kumar with the audio equipment. Photo: M. Pendakur.
Around 2006-07, foreign investors were “flashing money everywhere,” according to Rohan Sippy, a third-generation filmmaker who has watched the industry’s financing structure change up close (Sippy, 2009). The current world-wide recession has tempered that enthusiasm to some degree. Intense competition and low barriers to entry characterize the production sector in Bollywood, unlike in Hollywood where six large, transnational corporations dominate practically all aspects of the industry (Paramount, Fox, Universal, Disney, Warner Bros, Columbia Pictures). Hundreds of producers come and go and they tend to be mostly family-owned operations. Big companies, owned by families—Yash Raj Films, Ramoji Film City, Navketan International, Rajshree Productions, and Mukta Arts, Adlabs, etc.—continue to flourish. However, joint ventures and partnerships with foreign companies are reshaping these companies.
With the overhaul of the regulatory regime in 1991, a number of critical changes are shaping up in the production sector. The government of India allowed 100% foreign direct investment in all sectors of the film business. In addition, major banks and other firms with investment money came forward to fund various Bollywood productions. Initial Public Offerings and new entrants with high net worth became involved in film production. The beginning phase of the construction of multiplexes in the late 1990s and their success certainly added confidence to the investors in film production. I will return to the growth and significance of multiplexes later.
One enthusiastic report pointed out that starting 2001, Hindi film production sector received an injection of Rs. 430 million, Rs. 556 million in 2002 (11 projects), and Rs. 1761 million (33 projects) in 2003
By 2010, there were a number of venture capital companies in India that were supplying funds for Hindi film production. Notable among them were Cinema Capital Venture Fund and Vistaar Religare Film Fund, both domestically owned and registered companies, had a corpus of Rs. 3500 million (Jariwala, 2010, p. 2).
The initial euphoria of making high profits from the film business may be receding in the last two years. As the failure rate is high--around 85% of the films released flop in the theatrical markets--investors quickly learn that returns are seldom guaranteed. Box office failure for a film generally means negative impact on revenues in ancillary markets such as television rights, cable, satellite, DVD sell-through, and international markets. One major venture capital firm, Cinema Capital Venture Fund, headed by Samir Gupta, backed eight Hindi films. Their slate included, All the Best (2009), a multi-starrer with Ajay Devgan in the lead role. It is a mishmash of comedy, fantastic stunts, car chases, and romance. Gupta, however, says that the experience of funding film productions where costs cannot easily be controlled has given him and his venture capital industry certain reservations. He asserts that equity deals are not as preferable as debt and bridge financing (Chaudhary, 2011, p 8). or investing in prints and advertising where the equity or institutional investors are positioned at the top of the revenue stream.
There is a good deal of concern among institutional investors because they have also learned that the film business is not a transparent industry. One media consultant who did not want to be named pointed out,
In sum, Bollywood film financing is not yet an organized industry although the government policy of opening the doors for foreign direct investment and encouraging bank and equity finance have had a visible impact on the flow of money into the business. With high levels of corruption in the country and a thriving underground economy, there is plenty of private, untaxed money that is flowing into the film industry.
Transnational corporations involved in production, distribution, and exhibition on the global level entered the production market by way of joint ventures with Indian capitalists. These corporations simply wanted a piece of the vast market in India where more than 95% of the box office goes to Indian language films. They had tasted success with Hollywood imports hitting the jackpot with the Indian audiences in 2007 and the euphoria spilled into making investments in production also. In 2007, for instance, Casino Royale (a Bond thriller) and Spider-Man 3 were hits with the Indian audiences. Sony Pictures opened Spider-Man 3 with 588 prints -- 261 in Hindi, 162 in English, 78 in Tamil, 81 in Telugu and 6 in Bhojpuri -- the maximum number of prints for any foreign movie until then. This strategy of dubbing films into local languages expanded the potential market for Hollywood cinema into rural towns (Valsan, 2007). According to Sony, it paid off in a big way by making Spider-Man 3 the most successful Hollywood film at the box office in the country’s history with a total of $17 million.
Sony Pictures Entertainment went further by producing Saawariya (Hindi, 2007). With the highly successful Sanjay Leela Bhansali directing it, Sony distributed it worldwide through its wholly owned subsidiary, Columbia Pictures. This is the first time that a Hollywood Major financed and distributed a film made for Indian audiences at home and abroad. The Walt Disney Company co-produced and released Roadside Romeo (2008), a full-length animated film with Yash Raj Films. Disney also bought the home video rights for Aamir Khan’s directorial debut Taare Zamin Par (2007) for release in the US. The following year, Disney proceeded to build a stronger presence in the Indian market by buying a strategic 32.1% equity stake in UTV Motion Pictures in Mumbai for about $230 million in 2008. At the time, it was considered the largest foreign investment in the Indian media and entertainment sector. This investment also gave Disney a 15% stake in UTV's broadcasting unit UTV Global Broadcasting Ltd. (UGBL), which operated the kids channel Hungama TV and the youth oriented Bindass TV, Bindass Movies and UTV World Movies.
Warner Bros released Chandni Chowk to China (2009), made in partnership with Ramesh Sippy, a major producer-director in Mumbai. Fox STAR Studios has a joint venture with Vipul Shah for a multiple film production deal. The box office results from Roadside Romeo and Saawariya, however, have not matched the enthusiasm shown by the Hollywood Majors (Bhatia, 2010).
Production costs soared in the new millennium. Available data indicate that in 2006, these films were hugely successful:
As many as six films grossed over Rs. 400 million each ($8 million), two of which went over the Rs. 600 million ($12 million) mark. Lage Raho Munna Bhai was a mega box office hit approaching the Rs. 700 million mark ($14 million) (Joshi, 2006, p. 74). In 2011, this trend has continued where films with big stars and high budgets ranging from Rs. 600 million ($12 million) to Rs. 1350 million ($27 million) performed exceedingly well. Body Guard, with another Superstar of Hindi Cinema, Salman Khan reportedly cost Rs. 600 million ($6 million) to make but grossed Rs. 2.2 billion ($44 million).
Even Delhi Belly, featuring Imran Khan, a new comer who is related to the Superstar Aamir Khan, was a huge success with urban audiences in multiplexes. It was budgeted at Rs. 250 million ($5 million) and reportedly grossed Rs. 895 million ($17.9 million). Ra.One featuring Shahrukh Khan, another Superstar of Hindi cinema, with its expensive special effects cost Rs. 1350 million ($27 million) and grossed Rs. 1920 million ($38.4 million) (http://www.novinovi.com/box-office-hits-bollywood-2011/).
Corporatizing the production sector and bringing ‘discipline’ to the way films are produced in India has not proceeded along the lines that were enthusiastically promoted by the champions of efficiency at university business schools and Central Government officials. As long as there is unaccounted money from all sectors of the Indian economy, especially land sales, construction, gold, diamonds, drugs, import and export trade, financiers will continue to come to the film industry where illegally made profits can be laundered.
Distribution and exhibition
Just as competition is the hallmark of production, distribution and exhibition markets are still highly competitive. No single company dominates distribution and exhibition. Unlike in the U.S.-Canada markets, where a small number of large vertically integrated corporations lord over the market, many family-owned companies are involved in distribution and exhibition. Entry barriers do not exist for newcomers with money capital from other sectors of the economy or from the parallel economy. There are national distributors for Hindi language cinema and regional ones for other language films. In the recent years, big Indian-owned corporations have entered this field and are changing the game.
Distributors want to gain as much screen time as possible in key markets where audiences for their films may exist. However, given that the country does not yet have sufficient number of theaters, competition to get screen time is fierce among distributors.
Distribution and exhibition patterns for Hindi cinema are changing somewhat but what remains is as follows. The country is divided into six zones, often called distribution territories. The seventh zone is the global market and more will be said on that market later in this paper. The six domestic territories are composed of:
These six domestic zones have been further fragmented into 14 territories in the last few years as costs of production went up and acquisition costs for distributors also rose (KPMG Report, 2010, p. 23). In each major territory, there are 15-20 distributors who vie for the films that they perceive to have the greatest success in the exhibition market. What drives the perception is the buzz created by the publicity and promotion surrounding a particular film, the team behind a film including the star cast, director, production company and music director. A Hindi film’s success or failure in the Mumbai territory usually determines the price a film can command in other territories in the country.
High acquisition costs should reduce competition and drive out independents. However, that is not the trend in India. While many large corporate entities have emerged—Big Cinemas, PVR Cinemas, UTV Motion Pictures, Eros International—they have not been able to monopolize control over the supply of films. Independents still have a lot of competitive edge in the distribution business because money supply is abundant into the film industry that promises ‘gold’ with high rates of return. The glamor of being involved in a highly visible, star-studded industry and the parallel economy are the other reasons for the continued existence of independents.
In each territory, distributors classify cities and towns as A, B, and C centers based on population data. In other words, big metropolitan cities with a population of one million and above—such as Bengaluru, Chennai, New Delhi, Mumbai, Kolkata—are given the status of ‘A’ centers. Nearly a hundred cities in the country have that honor. ‘B’ centers are cities that have 100,000 and above populations and ‘C’ centers are smaller towns that may have one or two single-screen cinema halls and serve a population below the 100,000 mark.
There are still parts of the country that have no theatres at all. Those who live in those areas may go to a town for work or trading purposes and also see a movie. Or a touring theater may come around during the off-monsoon season.
In 1997, there were a total of 12,772 theatres in the country, 8886 of which were permanent cinema halls, also called hardtops, and 3918 were touring cinemas (Pendakur, 2003, 21). There was a steady decline in the number of screens, although total population grew in that decade and surpassed the one billion mark. By 2006, the total number of screens in the country had reached a low point of 11,183, which meant 10.2 screens per million persons. By this measure, in comparison to other major film producing countries in the world—U.S., Japan, France, Germany, Italy, U.K., and Spain, India was at the bottom of the list (Chitrapu, 2008, p. 122.). In the last decade, multiplexes and digital cinemas appeared and became a new, competitive force and added a novel way in which movies are being shown in the country. More will be said on that later in this section.
Unlike the first run, second run, third run patterns of release in the US-Canada markets, the distributors in India release films first in the big metros, then in the district towns, and then followed by the small towns. In effect, it would take a few weeks or months before a print reaches a rural ‘C’ center, and seldom in a good condition. Cities such as Bengaluru and Chennai have hundreds of theatres with 800-1000 seats. Within the city, however, distributors do not treat all theatres equally. Theatres which are air conditioned and have digital sound technology and are located in upwardly mobile areas of the city may get a new film to play earlier than the others which are near bus stands and poverty stricken areas. This is akin to the first run and second run classification that we find in the US-Canada markets.
In small towns or C centers, the front rows are no more than a hard bench. When the sales are good, the theatre owner can pack more people in by adding more benches. Ticket prices vary widely depending on the city, town, village setting as well as the kind of technological environment (digital sound system, for instance) or comfort (push-back seats, air conditioning, etc.). In many theatres, women have separate entrances and feel safer to sit separately from men because of groping incidents. Well to do families, however, sit together in the balcony area. These practices are different in multiplexes as we will learn later.
Typically, a Hindi film producer sells the film to territorial distributors, often before the picture is completed. This way, the producer can get an advance towards the delivery of a certain number of prints at a certain time. In this method of production and distribution, the producer spreads the risk among a number of territorial distributors because they are in essence willing to place a hold on a film by taking a risk on the film. They are richly rewarded if the film is a box office hit.
The trade practices that are in vogue between the distributors and exhibitors are generally as follows: (a) minimum guarantee, (b) fixed rental, and (c) percentage deal.
In C centers, exhibitors prefer the fixed rental. They collect the box office revenue, take their cut and hand over the rest of the funds, if any, to the distributor (Gangavathi, 2006, 2007). If the picture bombs, then the distributor will owe money on the contract which would have to be settled. Distribution and exhibition industries are experiencing substantial changes with the arrival of multiplexes and digital cinemas to which we turn now.
Multiplexes: mass entertainment for the elite
Two competing scenarios are playing out in the Indian theatrical market these days—rapid growth of mall-based multiplexes and single screen theatres going through digital conversion. These new theaters not only have set the high standard for luxury viewing conditions but also compete vigorously for new films. With higher ticket prices than the single screen theaters, multiplex profits are higher and, as a result, their market power would grow. As we will see, a tug of war developed between the multiplexes and producer-distributor groups for sharing box office revenues.
As noted earlier, not only was there a severe shortage of theatres but also the total numbers were on the decline. The archaic regulations and bureaucratic stranglehold on exhibition and lack 0f foreign direct investment are often noted as the reasons. While the bureaucracy remains corrupt, new corporate entities have emerged to take advantage of the availability of venture capital and also the growing demand for entertainment from the burgeoning population of young people.
The expansion of the economy, especially in the cities and towns, has been remarkable. Government investments in infrastructure (mass transit, airports, sea ports) and doubling of salaries for government employees fueled job growth and consumer spending. That in turn has resulted in a housing boom all over the country. Western corporations’ outsourcing information technology work, Call Centers, and other back office labor contributed to overall growth in the service industries. Employees of these companies are the primary consumers at malls and multiplexes because of their higher purchasing power compared to domestic workers, farmers, and other low wage jobs. While the US economy and the Euro zone have experienced a series of economic crises after 2007 and recovery has been slow and painful, India escaped it all. Wages have risen sharply (so is inflation) and also spending on luxury goods, travel, and entertainment.
Shopping mall growth has been meteoric. More than a dozen cities including Delhi, Bengaluru, Pune, Mumbai, Kolkata, Hyderabad and Chennai are the sites for the development of attractive shopping malls with multiplexes embedded in them. Given the demand for leisure and entertainment in India, it made perfect economic sense to include high end multiplexes in these new shopping malls. The average ticket price in multiplexes in 2007 was in the range of Rs. 130 ($3) to Rs. 200 ($4); by 2010, the range shifted upwards to Rs. 180-280 on weekdays ($3.50-$5.25) and Rs. 280-Rs. 350 on weekends ($5.25-$7).
Six national chains of multiplexes emerged by 2010 with a substantial number of screens in their control:
These mall/multiplex builders have also partnered with global corporations such as
and national corporations such as
The forecasts of growth since the advent of malls and multiplexes in India have been largely proven accurate with further expansion planned in this decade by mall and multiplex builders.
The revenues of these multiplex chains have also been growing according to their annual reports and media coverage, which spells further consolidation of the exhibition industry. In February 2010, Inox bought a majority stake in its rival chain, Fame India, for Rs. 664.8 million ($13 million), thereby making Inox India’s No. 2 multiplex chain. It was reported that the combined operation would result in 55 multiplexes with 204 screens in all (Nagaraju, 2010). Big Cinemas also increased its investment in Fame to 11%. Such horizontal integration was to be expected given the market and revenue growth as well as the fact that existing laws do not prohibit or even limit such industry concentration.
To further understand the operations of the multiplexes, we will take a look at two major competitors in the business—INOX Leisure Limited and PVR Cinemas, both of which have a strong presence in Bengaluru, known for its high technology industry jobs with a population of nearly 10 million. PVR Cinemas is certainly a trailblazer in the multiplex theatre business in India. Entering the industry in 1997, the PVR multiplex circuit has grown to 33 cinemas with 142 screens, located in some of the fastest growing cities of India, which include Delhi, Faridabad, Gurgaon, Ghaziabad, Noida, Mumbai, Bengaluru, Hyderabad, Lucknow and Indore.
PVR introduced such innovations as Cinema Europa, Gold Class, and online ticket booking, all of which attract an elite class of viewers who are willing to pay high prices. Gold Class tickets cost Rs. 500 ($10) and Cinema Europa, depending on the time of day, may cost between Rs. 130-180 ($2.50-$3.50). At its largest operation to date, the PVR Cinemas in Bengaluru had 11 screens with a total of 2016 seats and were showing some 19 different films at different times of the day. The first exclusive Gold Class auditorium with plush, reclining seats, where young women dressed like airhostesses served food and drinks, became an attraction.
It is important to emphasize the great diversity of content available at the PVR multiplexes. Big budget Hindi films, regional language films in Telugu, Kannada and Tamil, and even small-budget films made by new directors are finding access to the market. Such successful Hollywood films as Blood Diamond (2006), Spiderman-3 (2007), Avatar (2009) vied for audiences with Hindi and Kannada films at PVR Cinemas in Bengaluru. That is a remarkably positive development for Indian cinema because new talent finds many opportunities in such an environment.
Others were not far behind in what is a highly profitable business. INOX Leisure Limited, a subsidiary of Gujarat Flurochemicals, Ltd., entered the multiplex market around 2002 and grew by 2010 to 39 multiplexes with 147 screens in 26 cities (Inox Leisure, Ltd., Annual Report, 2010-11, p. 15). In this highly competitive atmosphere, some of these multiplex chains are attempting to provide what they call “pre-movie” and “post-movie” watching experience. Some of these swanky theaters also offer other entertainment facilities such as bowling alleys, karaoke centers, ice-skating rinks, kid zones, gaming zones, snooker tables, eating stalls, and book stores. The game changer is the variety of foods offered for sale compared to the experience at single screen theaters. One reporter wrote recently:
During my several visits to India in the last 15 years, one critical change in how families spend their time is the visit to the mall. Families go to the mall to simply hang out, a sort of a community get together, and wander around. The multiplex is part of this comfortable space to eat, see a movie together, and eat some snacks. One regular visitor to the mall was quoted as having said,
The multiplex operators are taking the concept of high-end cinema to a new level now by building uber-luxury theaters to go hand in hand with the construction of luxury real estate developments. These small theaters seat about 25 patrons and are rented to special gatherings of families or friends. At PVR’s Director’s Cut in Delhi, opened in 2011, patrons get 5-star comfort and also a chance to meet their favorite filmmakers. Ajay Bijli, the founder of PVR Cinemas, stated,
For instance, at the screening of Rockstar (2011), director Imtiaz Ali was present, to meet and answer questions from the audience after the film’s screening. This is what art movie houses or university film departments used to do in the US and Canada. As we can expect, ticket prices are higher at these luxury theaters but the food is the most important factor and the trickiest. The menus have to be innovative and also be easy to eat while watching a movie. Ashish Saksena of Big Cinemas pointed out this fact about serving food,
In their Cine Diner and 180 Degrees, two new luxury theater brands, that are set to open in Mumbai, patrons will find round tables, sofas, full course dinners with a movie. Ticket price will be Rs. 500-800 ($10 to $16), not including food.
Following PVR’s success in this niche market, Big Cinemas, Cinepolis and Inox have announced plans to build luxury multiplexes with 25-48 seats and gourmet food offerings. As one analyst remarked, “Such formats work well in places with high economic disparity” and PVR’s founder Mr. Bijli agreed by saying,
In other words, with such a large number of rich as well as middle class people who love the movies, differentiating them into various types of luxury movie viewing experiences and letting them splurge makes perfect economic sense.
Urbanization and a growing middle class, the under-screened market in the country as well as growth in the number of films made are the crucial factors that attract investment into this sector. Allowing 100% foreign direct investment into the film industry also helped in attracting capital from outside the country. The first to enter India’s exhibition market is the Mexico-based Cinepolis that announced an ambitious plan to build theaters in 40 Indian cities:
It is noteworthy that globally Cinepolis operates over 2000 screens with revenues of approximately $675 million a year. Its entry into the growing Indian market for theatrical film audiences will certainly heat up competition for product from within and outside India among the multiplex theater operators.
The mall, however, is the ideal tribute and a perfect symbol of the fast globalizing India. All the major international labels in clothing, watches, luggage, shoes, etc. could be found in a very comfortable, air-conditioned, cocoon like setting. As in an airport, there is a security checkpoint at each entrance to the mall. Uniformed, private security guards walk around the floors. There are no beggars, no traffic noise, no air pollution, no smelly sidewalks, and no “undesirable” crowds as we would find them on the streets outside. In other words, the air-conditioned mall offers a safe haven from the real India.
At the Forum Mall in Bengaluru, PVR Cinemas occupy an entire floor. As they don’t provide any seats for the patrons who are waiting to get into the theatre, many young couples sit on the steps to watch others walking by. The best part of the Forum Mall for me was the food court. Unlike the low-end food that is common in the malls of the USA, the Forum food court had specialized Indian, Chinese, and other restaurants.
To contrast the multiplex against a single-screen theater, I will turn to Mysore, considered a second-tier city. Mysore has a population of almost three million and was once home to a tribute-paying vassal king of the British Empire. It is also known for its tourist attractions and a relatively slow-paced life compared to Bengaluru. Mysore has grown in the last ten years. Some of the major information technology companies built their operations in that city as land prices were much lower than in Bengaluru and the city is filled with research centers and other educational institutions. For instance, InfoSys, one of India’s leading information technology companies established the InfoSysU campus, a $120 million corporate training facility. Every year 15,000 engineering graduates are selected from a national competition to learn the InfoSys way of doing business and go through a rigorous 12 month education program (Schlosser, 2006). Those who succeed are automatically given a junior engineer position with InfoSys. Between 2001 and 2011, Mysore city’s population grew by 13.39 percent from 2.6 million people to 2.9 million, which constituted almost 5% of the population of the state of Karnataka. This growing city craves for movies and patronizes films in several languages.
Mysore has 17 hardtops, two of which are twins or two screen multiplexes. Two shopping malls have been built in the last four years with multiplexes. I interviewed Ajit Kumar and his son, Sanat, who are a theatre-owning family. They are pioneers in the business and their company’s history is emblematic of the changes facing the exhibition industry in the country. Ajit’s grandfather ran a tent theatre called, Olympia 80 years ago. One of their theatres in the city of Mysore is still named after that first theatre. At one point, Ajit’s father, Veerendra Kumar, controlled 11 theatres in Karnataka including partnerships in Davanagere, a ‘B’ center. The family built the Lido in Bengaluru in 1965, the first 70mm theatre in the entire country and followed it with the Lido in Mysore with 856 seats. Olympia had 584 seats and they built Shalimar in 1972. They are operating Lido and Olympia but Shalimar was closed in the last decade.
The family had big plans for using the 1.5-acre land around Shalimar to build the first shopping mall in Mysore with a multiplex. Like the other malls in the country, this would also have to be a multi-story building, not the sprawling malls we see in the United States. This multiplex was to have 5 screens, each with about 250 seats. The estimated cost for the mall with a multiplex was Rs. 800 million ($16 million). As I toured this old relic of a theatre and the surrounding property with Sanat, I asked if they had found investors for this venture. Sanat said that they are looking for a joint venture with a foreign corporation to build, a possibility that exists only due to the relaxation of rules governing foreign direct investment. The proposed mall, however, never got built as others beat them to this game.
Linguistic diversity of Karnataka is helpful to Ajit Kumar’s economic situation. With patrons clamoring for the latest films in Hindi, Kannada, Tamil films, and the fact that there is competition among the distributors to enter the marketplace, exhibitors have an upper hand. The Lido plays Hindi and Kannada films whereas Olympia some times plays English films also (for example, Harry Potter films). The Kumars have upgraded their theatres with advanced digital sound technology, speakers, and other equipment for which they spent Rs. 3,200,000 ($60,000) each.
I wondered why such a heavy investment would pay off. Ajit Kumar responded by an optimistic analysis of the market. While the cinema audience declined with the arrival of television during the 1980s and its subsequent expansion in the country (Pendakur, 1989), exhibitors are noticing a big change in film consumption. “People are coming to watch movies on the big screen,” Ajit noted. I think the growing number of young people having money in their hands and lack of privacy in their homes where large families live under one roof are plausible reasons for this growth in cinema attendance.
Profitability to the theatre owners is high in this market because there are no advances and minimum guarantee deals, as is the case in some of the suburban theatres of Bengaluru. In Mysore, it is all fixed rental business. The distributor pays a fixed sum of money every week to the exhibitor. Labor costs are also lower compared to Bengaluru. For instance, a projectionist with ten years experience is paid only Rs. 2000 ($40) a month. Trade unions have not developed in the exhibition industry. None of Ajit’s theatres in Mysore have been converted to digital projection yet and they did not seem to be keen on it. Many exhibitors are still reluctant to invest in these new technologies and, to understand the reasons, we will examine the case of two theatres in a ‘C’ center, about 150 miles from Bengaluru.