MORE and more multiplex cinemas are popping up all over Malaysia, offering moviegoers state-of-the-art visual and audio facilities, luxurious seating and lounges, and wider variety of items at concession stands.
Having multiplex cinemas located in shopping malls offers great convenience for consumers, as it makes the mall an all-in-one destination. MetroBiz speaks to two major cinema operators in Malaysia to find out how the cinema industry has evolved through the times.
Expanding its reach
The introduction of a new brand called GSC Lite is Golden Screen Cinemas’ (GSC) latest venture to bring people from smaller towns back to the magic of cinema experience.
GSC Lite embodies GSC’s entertainment space in a lighter, more modest and accessible manner to cater to the local market, without compromising the effects of big screen and digital sound similar to those at its multiplex cinemas.
“We simplified the cinema’s interior design and ambiance, and scaled down the range of concession items. Ticket prices are reflective of its concept as well.
“We have been pleasantly surprised by the positive feedback it has received after the first GSC Lite opened in Mentakab Star Mall, Pahang in March,” said GSC Sdn Bhd general manager Irving Chee.
GSC – a wholly-owned subsidiary of PPB Group (a member of the Kuok Group) – celebrates its 25th anniversary this year. They presently have 197 screens in 24 locations nationwide, including Sabah and Sarawak.
“GSC opened several cinemas even after the 1997 Asian financial crisis as we were confident that there would be a movie-going crowd,” said Chee.
GSC has introduced many firsts in Malaysia, including: Digital Sound Systems in cinemas (1993), purpose-built cineplexes (1993), Gold Class hall for luxurious movie experiences (1999), International Screens for non-mainstream content and annual film festivals (1999), Premiere Class hall and twin seats (2004), GSC Signature boutique cinema (2007), 3D movies (2008), as well as mobile app and ticketless facilities for the convenience of movie-goers (2011).
The Gold Class is likened as the equivalent to an airline’s first class service, while the Premiere Class is the business class equivalent.
“The mobile app allows iPhone and Android smartphone users the ease of buying their tickets and choosing their seats at most GSC cinemas. “There are more than 600,000 downloads thus far and the mobile app usage is steadily increasing. Autogates were also installed at selected cinema checkpoints for movie-goers to have direct access into the cinema halls by scanning the 2D barcode on their smartphones,” he added.
Chee said GSC develops its own systems and innovations internally to better serve customers.
“GSC invests heavily in high-speed Internet connections, technology and innovation. We also place emphasis on environmentally-friendly facilities, with features like energy-efficient lighting and air conditioning system installed while ensuring it does not compromise on customers’ comfort.
“It cost several millions in cumulative rollout for behind-the-scenes innovations, with the mobile app costing more than RM1mil,” he said.
According to PPB Group’s 2011 annual report, “GSC recorded a 12% increase in collections from new screens, stronger performance of existing cinemas and increased revenue from film distribution.
“Profits were, however, lower at RM37.4mil in 2011 compared with RM44mil in the previous year due to higher staff cost, film rental rates and film acquisition costs,” revealed Chee. He added that GSC will be opening two nine-screen cinemas by late June at Setia City Mall, Shah Alam, and Paradigm Mall, Kelana Jaya.
“We will also be opening two more GSC Lite at Sungai Petani, Kedah, and Miri, Sarawak, and two GSC Cinemas in Kuching’s CityOne Mall and Seremban’s Palm Mall by year-end or before the coming Chinese New Year.
“In the pipeline are plans for an 11-screen cinema in Nu Sentral, KL Sentral and 13-screen cinema in IOI City, Putrajaya. We are particular in the sites we pick, hence they are usually located in shopping malls,” he said.
Chee said the cost of building a GSC cinema varies depending on the interior design, size, digital projection systems, 3D systems and other elements.
“It ranges between RM16mil and RM20mil for a 10-screen cinema, with each cinema screen costing about RM2mil.
“Meanwhile, simple decor at GSC Lite offers 20% to 30% savings in terms of building cost,” he added.
As one of the main movie distributors in Malaysia, Chee said GSC wanted to expose the public to non-mainstream and foreign language films, hence the introduction of International Screens when GSC opened the 18-screen GSC Mid-Valley.
“While the movies are internationally known as arthouse productions, we have to be careful with what we pick as it has to adhere to the local censorship,” he said.
“GSC also works with embassies and various organisations to host numerous film festivals with specially-priced tickets or for free.
“We have to look at the content and commercial value when choosing international movies to distribute, as some are too expensive to bring in or are not acceptable to local censorship. But we do make an effort to diversify portfolio of movies screened.”
Chee said GSC screens more than 300 titles of international and local films in all languages per year.
He explained that the cost of a movie ticket is divided among three parties — the government, movie distributors and cinema operators.
“It helped that the government has reduced entertainment tax to 25% per ticket price nationwide,” said Chee.
Before Oct 2011, the tax ranged between 40% and 50% on ticket prices depending on the state.
“Improvements in cinema technology and introduction of anti-piracy measures such as Parliament’s approval of the Anti-Camcording Act are great boosts in enhancing the moviegoing experience.”
Chee estimated that the moviegoing crowd would be 50% to 100% more than the present if not for piracy.
“This is one of the reasons why
GSC Lite was introduced in the rural areas.
“Piracy is our main competitor, not the competition from fellow cinema operators,” he concluded.
An industry pioneer
TGV Cinemas introduced its much-raved about Beanieplex movie hall at 1st Avenue, Penang, and later at Sunway Pyramid, Petaling Jaya, and Tebrau City, Johor Baru.
“Beanieplex has a cinema hall filled with custom-made beanbag seats offering patrons a cosy and relaxed viewing experience,” said TGV Cinemas Sdn Bhd chief executive officer Kenny Wong.
“It has become a hit among moviegoers, especially children and teenagers. It has been so popular that a fan has even posted a photo of it on social media website 9gag.com (http://9gag.com/gag/3192670),” he said.
TGV Cinemas, a wholly-owned subsidiary of Tanjong Public Limited Company, was established in 1995 with its first cinema located in 1 Utama, Petaling Jaya.
“TGV was a pioneer in establishing the multiplex concept,” said Wong.
“We are presently the owner and operator of 16 cinemas with 124 screens, the bulk of which are located on the west coast of Peninsula Malaysia.
“The company went on a rebuilding mode the past few years and has been rapidly expanding with major investments in technology and innovation.”
TGV undertook a transformation exercise in 2010, which saw its new-generation cinemas adopting a fresh look and incorporating new advances in cinema technology to enhance the movie-going experience, such as digital screen movie halls.
“The opening of TGV Wangsa Walk, Kuala Lumpur, in April 2010 unveiled a new design, featuring ample seat-to-seat space and more leg room.
“We implemented that design at TGV’s new cinemas, while exisiting ones were refurbished to incorporate the new look,” said Wong.
If TGV Wangsa Walk was version 2.0 of its existing cinemas, Wong termed the revamped TGV Sunway Pyramid in PJ — opened in Dec 2011 — as version 2+.
“It is the only cinema in Malaysia that offers the IMAX experience, with both 2D and 3D digital versions,” he said.
“There are no words to describe the IMAX experience. Its full immersion gives you the feel of being a part of the movie, rather than watching it,” he said.
TGV Sunway Pyramid features the TGV Club Lounge, which takes on the airport departure lounge concept as patrons can chill out, order hot food or snacks, or surf via Wi-Fi connection, before their movie session at one of the two TGV Club Premiere Class halls.
Even within the club halls, there are tiered seating options which are similar to the seating classes in an aircraft.
“Besides the Cantina takeaway counter that offers takeaways like pastries, ice cream and coffee, TGV also has its own exclusive range of concession stand products, like the unique Tumbo two-in-one food and drinks container that also serve as movie collectibles, gourmet Popcorn Royale packed in tins, and imported nachos served with two dips,” said Wong.
In 2010, TGV Cinemas took in RM153.9mil in revenue and RM14.5mil in operating profit, an increase compared to the RM67.8mil in revenue and RM4.5mil in operating profit recorded for the previous year.
“The next big thing is for TGV to go back to where it started.
“Unlike TGV Sunway Pyramid that was refurbished while still in operation, we will be rebuilding TGV 1 Utama from the ground up.
“TGV 1 Utama will be the new flagship for TGV, offering the best in terms of hardware (cinema equipment) and software (customer service), as well as more exclusive elements,” said Wong.
Measuring an estimated 50,000 sq ft, the new three-storey TGV 1 Utama will be located on the third floor of the mall’s new wing, and is slated to open this August.
The 11-hall cinema will have the Beanieplex, TGV Club, Cantina, purpose-built Digital IMAX theatre, and a new category of hall that Wong said is “one notch above TGV Club, offering more exclusivity and comfort.”
Wong highlighted that Malaysia is an underserved movie-going community, as, according to industry statistics, an average Malaysian watches movies 1.9 times a year compared to 4.5 times a year for Singaporeans and 7.3 times a year for Australians.
“We plan to serve the people’s growing needs with the opening of five to six new cinemas this year.
“TGV will be opening at Aeon Jusco Rawang, Aeon Station 18, Ipoh and Bukit Indah, Johor Baru, within the next few weeks, pending the necessary inspection and licensing approvals.
“We are also looking at opening in five more locations next year – Miri, Penang, Ipoh, Cheras and Kota Damansara.”
Wong said building a cinema is not difficult if one has the right partners.
“It costs between RM12mil and RM15mil to construct a basic cinema with 10 halls, which can double if we are to include exclusive features.
“The returns for establishing a cinema are not lucrative as it takes up to five to six years to recoup the initial investment,” he said.
Wong welcomed competition because he said is a matter of offering choice for consumers.
“1 Utama needs more than one cinema operator, as customers can go for the unique experiences that each cinema offers,” he said.
“In fact, piracy is the cinema industry’s biggest competition.
“The industry has always faced issues with piracy for a long time, although it has been contained pretty well the last few years.”