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The writing is on the wall for multiplexes. Malls are cutting screens to size
Movie theatres may not be dying, but their existential crisis is real as they keep losing ground to smaller screens—literally!
As over-the-top (OTT) apps continue to succeed in keeping consumers indoors, consistently empty theatres are pushing mall developers to reassess the space they allocate to multiplexes.
The intent is to build fewer but high-quality screens and save space for expanded dining, alternative entertainment avenues, and emerging categories such as jewellery and direct-to-consumer brands.
Unless the movie industry, which is still recovering from the pandemic-induced lethargy, scripts a dramatic comeback, space marked for theatres within malls could fall by 30-50% over two to five years, estimated real estate consultants.
Though reducing the existing cinema space is not feasible, new projects are being designed keeping in mind the evolving consumer behaviour. "Cinemas will always remain, but the format may change. It’s not about the volume and number of screens anymore. It's a lesser number of screens, but a greater experience," Pushpa Bector, senior executive director and business head, DLF Ltd, told <i>Mint</i>. DLF operates malls across the National Capital Region (NCR).
Contrast that with the pre-pandemic trend of mega multiplexes that boasted nine to 17 screens.
“We are seeing a downsizing of cinema spaces. Before the pandemic, there was a trend of building megaplexes with eight, 10, and even 12 screens, especially in North India, where there aren't many language options to justify so many screens. But things have changed, said Amit Sharma, managing director of multiplex chain Miraj Entertainment.
Space optimization
To be sure, demand for mall space is consistently surpassing supply, bringing down vacancies and driving up rentals. The demand is mostly led by apparel and accessories, beauty and personal care brands, Mint reported on 19 March, citing a report by real estate consultant Anarock Retail.
"Right now, occupancy levels are not as high, and cinemas are no longer able to afford the kind of rentals or real estate costs they were paying before the pandemic…The downsizing is being driven more by market realities than by design. The idea is to strike a balance: Give developers better yield and at the same time help cinemas improve occupancy with a leaner, more efficient setup," added Sharma.
A similar trend is playing out in the hypermarket space, where space given to large supermarkets is also being slashed to accommodate in-demand categories such as food and beverages, experiences, and jewellery.
Source: Mint