Kantana Group Plc, a media and entertainment company, has earmarked 1.2 billion baht to drive its community cinema business to 300 screens this year.
The first Kantana community cinema opened last October in the Center Walk area in front of the University of Phayao up in the North. Kantana Group vows to build bigger and better budget cinemas this year under a revised plan.
The community cinema concept was launched in late 2013 but then hit by the political turmoil and economic downturn.
"With many negative factors, we missed our target of 1,000 cinemas by the end of 2014. Instead, we formed joint ventures with local investors to build only 40 cinemas in some provinces," chairman Jaruek Kaljaruek said.
This prompted Kantana to revise the budget cinema concept.
The company will develop 200 community cinemas on its own at a cost of 1.2 billion baht to show that the business model is attractive. It may rent land from provincial cooperatives, which have a high traffic of rural residents.
It will then sell the cinema franchise to interested investors rather than entering a 50:50 venture with local investors.
Previously, subsidiary Asia Cinema Network Co handled construction of budget cinemas.
Under the revision, each cinema will be bigger, with the number of seats increasing to 80 from 50 and costing 4-6 million baht, up from 1.2 million baht.
Ticket prices will remain unchanged at 30 baht.
The cinema will be renamed Kantana Movie Town, a change from Kantana Cinema.
Mr Jaruek said some 50 investors are waiting to sign cinema franchise contracts with Kantana.
Among the 40 cinemas under the joint-venture concept, all will operate in the next two months.
Most will be in Phayao, Lamphun, Khon Kaen, Ratchaburi and Nakhon Si Thammarat provinces.
"We found the old business model did not work. Construction delays occurred, and sometimes we and our partners had different goals," Mr Jaruek said.
"These problems together with economic and political uncertainties made us expand our community cinemas at a very slow pace."
After the launch of the cinema franchise concept, more local investors, particularly community mall owners, want to open cinemas to attract more people to their projects.
"Cinemas are not only about movies but also have a retail element," Mr Jaruek said.
About 60% of the cinemas' revenue will come from non-movie products such as popcorn, snacks, soft drinks and souvenirs.
The franchise concept will help Kantana to control quality and draw more partners to expand the budget cinema business.
Major fixed costs include satellite transponder rental fees, screening systems and other infrastructure.
Kantana's new goal is to expand its budget cinema business to 300 screens this year. The company will receive support from the SME Bank to help its community cinema franchisees.