Kantana cuts back movie-mall project
AFTER EXPERIENCING difficulties with its business partner and internal management, Kantana Group has revised its movie-mall project by going it alone and lowering its roll-out target from 1,000 to 300 locations.
Chairman Jareuk Kaljareuk acknowledged that his ambitious expansion plan for the Kantana Movie Mall community cinema project had been delayed after initially targeting 1,000 cinemas in Thailand, Cambodia, Laos, Vietnam, Indonesia, Malaysia and Myanmar last year.
The project was to have been developed with either clients or landowners in each country.
Under the original plan, each Kantana Movie Mall was to have consisted of a 50-seat cinema with a box office that offered Bt30 movie tickets, along with shops and restaurants. The total cost of each project was Bt1.2 million.
Jareuk, the head of the country’s leading film and TV production house, said the revision of the plan was a result of the political and economic uncertainty and miscommunications about the project with potential clients. As such, the company decided to run the project on its own and adjust some details.
Under the newly revised project, Kantana has prepared its own investment of Bt1 billion for building 300 movie malls in the Kingdom.
Each cinema will be designed and built to accommodate 84 seats.
Jareuk said the investment would soar to at least Bt3 million per location, while the ticket price remained unchanged. He said his company would discuss potential expansions with the operators in each location.
Currently, Kantana has 40 contracts with local operators to run the movie malls in provinces such as Trat, Yasothon, Nakhon Ratchasima, Krabi, Khon Kaen, Chiang Rai, Phetchaburi, Phuket and Surat Thani, he said.
He said that at each location 60 per cent of the total targeted revenue would come from non-movie streams such as rental fees from commercial areas, food and beverage sales and related events while the remaining income would come from movie-ticket sales.
Kantana had also signed a number of contracts with local movie operators in Indonesia, Malaysia, Cambodia, Vietnam and Myanmar. The first overseas branch was expected to be launched in the middle of this year. The movie-mall project is run by Kantana subsidiary Asia Cinema Network, which is expected to be a key pillar in the group.
Last year, Kantana Group generated Bt1.5 billion in revenue, 40 per cent below its original target after it was forced to scrap its film-production business after some overseas clients stopped printing on 35mm film. Jareuk added that the key revenue source this year and the immediate future would still be its TV business. That business includes satellite-based free TV channels and TV production for analog and digital terrestrial TV channels. This segment accounts for 70 per cent of the company’s total income.
