Cinema Franchising: Opportunity to expand the Vietnamese cinema market

In the context of impressive growth in Vietnam's box office revenue, the cinema franchise model is being deployed as a way to reduce capital risk and meet local entertainment needs. However, the implementation of this model is not simple.

Lessons from the country of a billion people

In India - a country with a vibrant film industry, the most prominent is the PVR Inox cinema complex chain with the Franchise Owned Company Operated (FOCO) model. Accordingly, the investor owns the infrastructure, while the franchising company is responsible for design, development, construction, operation, management and ensuring service standards.

Beta Cinema is the first theater system with a franchise model in Vietnam.

FOCO is expected to rapidly expand its cinema system, bringing modern cinema complexes closer to audiences across the country, especially in cities in provinces and localities. At the same time, it will attract social investment, bringing economic benefits to local filmmakers and artists through box office revenue. Notably, PVR Inox franchised cinemas are not only places to show movies but also a comprehensive entertainment space with food courts, games, etc. According to a representative of PVR Inox, the company has researched and developed this model for 3 years, especially the construction of standard operating procedures (SOPs), helping to shorten the time to deploy new cinemas by 50%.

In addition to PVR Inox, the franchise model is also being implemented by some units in India. Tulip Cinemas' project aims to convert old cinemas into modern entertainment centers without having to build completely new ones. In particular, this project supports the entire operation, including ticket sales, customer care, food , event organization, etc. These models show that the direction of socializing cinema infrastructure is becoming a trend in populous countries, where new investment costs are too high and entertainment needs are increasing rapidly.

Opportunities and challenges

Talking about the current cinema franchise trend in Vietnam, Mr. Nguyen Hoang Hai, representative of CJ CGV Vietnam, said that, like many other industries, cinema franchise helps brands expand quickly without spending too much investment costs, thereby being able to capture a higher market share. According to Mr. Truong Xuan Bach - Project Development Director of Beta Group, the cinema and cinema market is a "delicious cake" so it will be very attractive to professional development investors, thereby contributing to improving the quality and coverage of cinemas across the provinces and cities.

Currently, the cinema market in Vietnam is still on an impressive growth trajectory. If in 2014, the entire market had only 79 cinema complexes, by the end of 2024, this number will be 212 cinema complexes. Currently, CGV and Lotte - 2 enterprises from Korea, account for more than 70% of the market share. Other enterprises such as: Galaxy, Beta, BHD, Cinestar, Mega GS, Dcine, state cinemas... account for the remaining market share. According to Beta's prediction, by 2035, the entire market can grow beyond the 1,000 cinema complexes mark with more than 100 million visitors/year.

“The pioneer will have a lot of pressure, which means that when the market sees the effectiveness, other units will learn and engage in this franchise model. Therefore, our next challenge is to continuously innovate, apply more technology and come up with suitable features for each locality,” said Mr. Duong Hoang Phuong, Franchise Director of Beta Group.

In Vietnam, since 2019, Beta Cinemas has been the pioneer and only cinema chain to test the franchise model. After more than 5 years, Beta has had 5 franchised cinema clusters in localities: Tan Uyen ward, Ho Tram commune (HCMC), Phu Quoc Special Zone ( An Giang ) ... with an investment of 4-6 billion VND/screening room. In which, Beta Tan Uyen cluster is considered a successful example, with only 3 screens, after 3 years of operation, it has recovered 80% of the investment capital, welcoming an average of 300,000 visitors/year.

Sharing about the current difficulties with the cinema franchise model, Mr. Duong Hoang Phuong - Director of Beta Group franchise, said that it lies in the trust of investors. "The core factor in this investment cooperation needs to be transparent and clear, not just the numbers on financial reports, but also needs to be proven by real indicators, audited reports, and submitted to state agencies," Mr. Phuong emphasized. From practical experience, Mr. Le Tran Minh Huy, investor of Beta Tan Uyen cinema complex, pays special attention to issues related to law, construction permits, fire prevention and fighting, etc. "I think it is necessary to have a clear, in-depth and practical consulting team. Everything must be very specific and close to be able to operate," Mr. Minh Huy advised.

VAN TUAN

Source: https://www.sggp.org.vn/nhuong-quyen-rap-chieu-phim-co-hoi-mo-rong-thi-truong-dien-anh-viet-post820690.html