UFO Moviez, a digital cinema distributor for theaters that doubles up as an ad platform, reported a fall of 50.7% in its net profit by at Rs 7 crore for the quarter ending June 30, 2018 (Q1 FY2019). Its advertising revenue also dipped by 8.5% to Rs 45 crore as compared to Rs 49.3 crore in the same period last year. UFO is the largest digital film distributor in India, which claims that, its tech allows the films it releases to come out on the same day throughout the country. It also negotiates theatrical advertisements for partner screens, so that theater owners don’t have to negotiate ads individually.
Other performance highlights
The company’s advertising revenue has had a constant CAGR of 25%, and has grown to Rs 213.6 crore in FY 2018. The much higher year-on-year growth for the quarter, however, has come on the back of UFO increasing the average duration of ads shown per show from around four minutes to over 7 minutes. The annual average is little over five minutes per show.
57% of UFO’s advertising revenue came from the government and PSUs in FY18.
UFO Moviez advertises on both multiplex and single screens, with a little over a fourth of its clientele being multiplexes. Since 2015, the number of overall screens has been mostly stable, despite a decline of around 10% in single screens. The number of multiplex screens, however, grew to 1,194, with an overall screen network for advertising standing at 3897.
Ever since the (regulatory clearance pending) merger with Qube, UFO’s portfolio of screens where it advertises has grown tremendously, and more than doubled in South Indian states. In South India, UFO now has 7619 screens (including the Qube screens) where it advertises.
– Scrabble Entertainment Limited, where UFO owns 91.32% in the company. Scrabble operates UFO’s digital cinema business in certain states in India and internationally. Scrabble also has 33.33% stake in Scrabble Digital Ltd, which owns digital labs in Mumbai, Chennai and Hyderabad, and Scrabble Digital JLT, which owns digital labs in Dubai, which provide movie encoding, processing and compressing services.
– DCI Solutions Worldwide, which operates the digital cinema business in the US and Mexico through associates.
– Southern Digital Screenz India Private Ltd, which rolled out the company’s UFO-M4 digital cinema solutions in the states of Kerala, Tamil Nadu, Karnataka and Andhra Pradesh.
-A merger with Qube Cinema is also pending regulatory approval.
UFO Movies has acquired its subsidiary Valuable Digital Screens for Rs 60 lakh. Started in 2006, VDSPL has three businesses, including Caravan Talkies, which is an open movie viewing experience for India’s rural population situated in media dark areas. A caravan visits seven villages a week in a close circuit to screen movies. The second business is Club Cinema, which provides movie screenings of recently released films in clubs and community centers at private screens, and the third business is NOV A Cinemaz, which sets up movie theaters through a standardized model both in terms of infrastructure and experience.