Citing high inflation, slackening of demand for entertainment and constraints of margins in leisure industry, Pyramid Saimira is tightening its belt.
The company, which has digital film distribution operations (details), has informed the BSE that given the un-viable cost structure of the Hindi film industry, they are closing down 33 screens and winding up their film exhibition division in Western and Northern parts of India. Reuters quotes Chairman P.S. Saminathan: “We were losing money there, so we withdrew from these areas. We expect the (filmed entertainment) industry will not grow much this year.”
That’s a warning sign for the films business, and and some food for thought for the Digital Distribution business. Remember that Airtel is exploring the Digital Distribution business, and the only two competitors they have in India are UFO Moviez and Pyramid Saimira.
Pyramid Saimira has also decided to drop plans for acquisitions in UK and Europe. Earlier this month, they were reported to be in talks with UK’s Reel Cinema. Reel operates 13 cinemas in the UK – with mostly cult films – and has plans to open seven more in the next two years. Saimira may also defer its $75 million fundraising plans, adds Reuters.
Operations in Malaysia and the USA will continue, given better profitability, as will their film exhibition business in China: they had inaugurated their first theatre in China last week, as a part of a joint venture with the Ministry of Culture.