United Mediaworks has started Nukkad Entertainment, a chain of small digital cinema halls targeting lower-income groups in India. Nukkad halls have a capacity of 100-120 seats and charge Rs. 40-50 per ticket, providing a better experience than existing illegal video parlors. The company plans to open over 2,000 such halls across India in the next 4-5 years. The business model aims to generate new revenue streams for the film industry from new markets while also curbing piracy, benefiting all parties.

1. Paisa Vasool Video Parlours

2. Dawn of 'paisa vasool' video parlours
• At a time when makeshift local video parlours in cities and
their outskirts play pirated movies in small, dingy rooms,
the viewers, usually daily labourers and migrants, happily
pay Rs 10-40 per ticket. But, the quality of video and sound
at such parlours is bad and the films are predominantly
pirated and rarely the latest ones.
• While it is very difficult to ascertain the total number of
such screens across the country, a study, commissioned by a
film company, projects an annual revenue loss of Rs 436
crore to the film industry from just 500 such screens, which
charge only Rs 15 a ticket.

3. Bottom of Pyramid Model
• However, efforts have started to legitimise
the business and build a revenue model out
of the bottom of the pyramid. United
Mediaworks (UMW) has started Nukkad
Entertainment, a chain of small-sized digital
cinema halls targeting the lower-middle and
lower-income groups.

4. SHOWTIME
• There are approximately 1,000 legal & illegal
video theatres in Mumbai & surrounding
districts (Thane, Raigad & others)
Rest of Maharashtra has approx 140 video
theatres (Pune, Nasik, Malegaon &
Marathwada)
Surat has approx 460 video theatres
Rest of Gujarat has approx 140 video theatres
Hyderabad has approx 350 video theatres

5. • Chhattisgarh has approx 40 video theatres
Rajasthan has approx 60 video theatres
(currently govt does not issue video theatre
licences)
Madhya Pradesh has approx 70 video theatres
Currently, all the video theatres exhibit films via
pirated CDs and DVDs
• Source: Private study

6. Cost
• The average development cost per Nukkad
cinema hall is Rs 15-17 lakh. To develop one
requires an area of 1,400 sq ft, which can have a
seating capacity of 100 to 120 seats. “We also
provide facilities like push-back seats, e-ticketing
and HD digital films, along with high quality 5.1
surround sound, giving viewers the ultimate
experience in digital viewing in just Rs 40-50 a
ticket.”

7. • Ashish Bhandari, co-founder and managing
director of United Mediaworks, said, “In the
last two months, we have signed 27 Nukkad
deals in Rajasthan and are planning to open
200 Nukkads over the next two years. The
plan is to have more than 2,000 such
properties in the next four-five years across
India.”

8. PVR Experience
• Multiplex major PVR also has a small theatre chain
under the PVR Talkies brand in Aurangabad, Latur and
Vadodara, which charges anything from Rs 40 to Rs
150. However, the cost of one such theatre is
estimated at Rs 60 lakh. There are also a few more
brands offering small-size digital cinema halls like K
Sera, Silver Screen and Apna Cinema. But, the ticket
price is higher than that of Nukkad Entertainment.

9. Win-win
• The cinema chain would cater to the entertainment
needs of the middle and lower-income groups.
With its business associate model, the chain will
grow its presence across India, helping the film
industry generate revenue from new territories and
markets where revenues were never heard of, he
said. It will also help in curbing piracy across rural
and semi-urban markets.

10. Business model
• In the business model, anybody who associates
with United Mediaworks for a 120-seater
Nukkad Entertainment can earn a net revenue of
Rs 79,000 (in case of 50 per cent occupancy) to
Rs 2,23,000 per month (100 per cent
occupancy), after shelling out the share of the
distributor, content delivery charges (Rs 150 per
show charged by United Mediaworks) and other
electricity and staff expenses. The business
model is designed in a way that it can be a win-
win for across the value chain.

11. Challenges
• Earlier the screens were showing Bhojpuri and other
regional films but with the help of their patented digital
cinema server, Digibutor, they had been able to get big
mainstream films, by ensuring content security and
transparency in distribution. “We invested close to Rs 10
crore in the technology. It is easy to use, yet completely a
secure system. Once distributors understand the process,
they are open to share new movies with us.”
• But getting films was not the only challenge. Getting the
audience, specially women and children, was a bigger
challenge.