Increased investment in the Indian exhibition sector could see the territory's box office gross increase by 30% in the next five years, Dodona Research predicts.

The industry analysts found that a strong economy, retail boom and rising middle class disposable incomes in addition to expansions in the downstream exhibition business will boost industry revenues.

While multiplexes in India currently account for only 4% of the country's cinema screens, certain films generate up to 40% of their box-office revenue from them due to higher ticket prices. Six companies - Adlabs, PVR Cinemas, INOX Leisure, City Ventures, Shringar Cinemas and Cinemax Cinemas - have plans to fund ambitious nationwide multiplex circuits and between them, are set to open 1,500 screens.

And a number of companies are also acquiring and converting traditional single screen venues to create digital screen networks with lower resolution 1.3K or HD projectors, ignoring the DCI (digital cinema initiatives) 2K/4K business model. This means cinemas are getting hit films into cinemas faster at a better quality.

UFO Movies, which operate 918 screens, is the biggest player in this sector, followed by Pyramid Saimira with 371 screens and E-City Digital with 90 screens. Dodona predicts these three companies with expand their networks across more than 5,000 screens by 2011.

'Although there are still problems to be surmounted such as high entertainment taxes and piracy, India's exhibitors are showing ambitions on a grand scale,' says Katherine Wright, author of Dodona's Cinemagoing India report. 'On the basis of current plans, in 2011 half of all the screens in the country will have been built or re-equipped. Even at its height, the European and North American multiplex boom did not match this scale of investment.'