Jitendra Kothari fondly remembers the time in the early 1980s when he took his family to the Bombay Cinema in Queens, New York, to watch popular Hindi films on the only screen the theater had. “It was the only social pleasure we had because we couldn’t see these films anywhere else,” says Kothari, who immigrated to the United States from India in 1970. “It was like being back in India.” Kothari recalls how, before the advent of theatres, some of his friends rented halls and auditoriums in universities in the 1970s and screened Hindi films there.
There has been a big leap from university auditoriums to actual cinemas showing Hindi films, but fast forward 30 years and not much has changed in Indian cinema. Indian Theaters remain independent, mom-and-pop shops that have seen many ups and downs in their business cycle. It began in the 1980s, when VCRs became more affordable and theatergoers switched to watching their favorite films at home. “Why spend money on a movie ticket when we can watch it at home for next to nothing,” says Kothari. Shortly thereafter, the Bombay Cinema in Queens went bankrupt.
There appears to have been a revival of independent Indian cinemas in the mid-1990s, perhaps with a new wave of South Asian immigrants coming to the US. But the business still has its problems. “The combination of increased competition, labor issues and pirated DVDs is affecting business,” said Siva Gunasegaram, whose father co-owns Jackson Heights Cinemas in Jackson Heights, Queens, and the Mayfair Theater in New Jersey.
Lately, some of the competition has come from an unlikely company from India that hit US shores in early 2009, giving some independent Indian cinema owners a bigger shot at their business: Reliance MediaWorks Ltd’s Big Cinemas, which is now present in several countries including India, Malaysia, Nepal and the US.
The Mayfair Theater in New Jersey opened in 2008 and screened Tamil, Telegu and Hindi films on three screens. “Within a few months of our opening, large movie theaters opened within a few blocks of us,” says Gunasegaram.
Reliance MediaWorks CEO Anil Arjun says the company wanted to take advantage of the fact that an estimated three to four million Indians in the US speak an Indian language, including Hindi, Tamil and Telegu. “We noticed that there is a significant market for Indian films in the US,” says Arjun. “But what was missing was an adequate distribution mechanism to deliver products to customers and give them a real consumer experience in terms of entertainment.”
Reliance MediaWorks acquired several existing theaters in the US, 30% of which were already showing Indian films. In addition to introducing their brand to them, the company has renovated the theaters and changed the sound system in hopes of giving consumers a better “look, feel and experience,” Arjun says, compared to some Indian mom-and-pop theaters. “We brought not only a superior theater experience and atmosphere, but also reporting systems, electronic ticketing, higher quality standards and staff training,” he says.
Arjun says that since the penetration of Indian films in the US is only 8% of global grosses, the figure could be much higher. The Reliance MediaWorks website claims that large theaters account for “20-35% of the Hindi film box office and over 70% of the Tamil and Telegu film box office in the US.”
In some ways, Reliance’s strategy has worked. Rimple Shah, who goes to see Hindi films at Big Cinemas in Edison, New Jersey, says the situation has changed since the company acquired the theater about a year ago. “Before (it was taken over by Big Cinemas) it was very dirty and a little smelly. Now they have made the lobby and ticketing area much nicer,” she says. However, it remains to be seen whether this will change consumers’ choice of cinema, especially since there are very few cinemas showing Indian films. “I go to big cinemas because they are closest to my home,” says Kunal Mehta. “The next closest theater is 10 miles (16 km) away.”
Since Indian cinemas are an unorganized industry fragmented across the US, Reliance MediaWorks sees an opportunity in creating an independent chain of branded cinemas.
For Bala Murali, who owns single-screen cinema Sathyam in Chicago, the opening of five-screen Big Cinemas across the city has not had much impact on his business, which screens only Tamil, Telegu and Malayalam films. There is enough distance between the two theaters—about a 40-minute drive between each—to serve the respective Indian communities in those areas. Murali has also equipped his cinema with the latest sound system and serves Indian snacks like big cinemas do. “But if they settle here long term, it could be a problem for small theaters like us because they will control the market,” he says. Murali is also a distributor of South Indian films in the US. Reliance is now entering into the distribution business. “They are starting to encroach on my territory,” Murali says. From his theater’s perspective, he said, if competition heats up, he could always start showing Hollywood films or simply get rid of the theater lease.
Bhavesh Patel, whose family partnered with Reliance to open large movie theaters on Chicago’s north side, says the firm has brought a sense of professionalism to the industry. At his Chicago location, which only shows Indian films, he says, “our customers see South Asian faces. Some people might be afraid to go see American films in a salwar kameez. But that’s not the case here.”
Partnerships with local communities have benefited major movie theaters. “We bring experience, systems, operational expertise, negotiation in terms of programming, concessions, product flow, consistency in marketing promotions and online marketing strategies. The strength of our partners is that they know the area very well. This helps us determine prices and programs,” says Arjun.
Arjun says Reliance studies the “history of the original theatre, the audience and the surrounding area” and then decides what the lineup of films will be.
Additionally, the large concentration of Indians in the neighborhood and proximity to the theater seem to help Molakapalli retain its customers. “Even with big theaters, I can compete with them because of my location,” he says.
Molakapalli also owns a theater in Dallas, Texas, which has no competitors yet. It’s too early to say what will happen if big movie theaters move there, he said. Reliance is looking at this as a possible opportunity.
The mix of movies in large theaters depending on the area helped the company overall. “Our dependence on product flow is limited,” says Arjun. “When there was an all-Hindi film strike in Bollywood last year, it had a big impact on us in India. But in the US, the impact was very limited because we had a lot of Hollywood films that we were showing, as well as Tamil and Telegu films.” By contrast, Eagle Cinemas, located in Jackson Heights, Queens, which showed only first-run Hindi films, was forced into bankruptcy when Bollywood film producers went on a seven-week strike last year.
At the moment, owners of independent cinemas in the US have mixed feelings about the presence of large cinemas. Arjun says the company has improved the consumer experience of watching Indian films. “I don’t think the market has opened wide enough to say we’re capturing market share,” he says. In fact, he adds, the presence of large theaters in the United States helps independent theaters. “We’re showing that more Indian films are being released in the US, which means every distributor is looking at wider releases, so there’s a flood of production,” says Arjun.
And he’s happy to work with independent owners if the opportunity arises. Big Cinemas are currently located in 24 U.S. cities in states including New York, New Jersey, California, Kansas City and Chicago, to name a few. As for the company’s future goals, Arjun says it hopes to go deeper into California and open in Florida. “The good thing about the US is that the Indian market is concentrated and not dispersed. So you can focus on specific theaters and communities,” he adds.
Several independent Indian family theaters have changed hands many times because as entrepreneurs they believe that they can turn theaters into successful businesses. Many of them started their business out of a passion for cinema. As for Reliance MediaWorks, Arjun says, “Personally, I am very proud that we have an Indian company, an Indian brand, that has a presence in the US.”