(This interview was published in TheatreWorld November-December 2015 issue)
Listed as the most trusted brand in the Brand Trust Report, 2015, PVR Ltd is the largest cinema exhibition company in India. In fact, the Brand PVR has been listed consecutively in the last three studies as the most trusted in the Entertainment category. Today PVR stands as the largest multiplex chain of India with 477 screens and a strong presence in 44 cities across 107 properties. TheatreWorld gets up close with Ajay Bijli, Chairman and Managing Director, PVR Ltd.
Tell us how PVR Cinemas started. What inspired the group to foray into Cinema Exhibition? What business prospects and fortunes did the Group see in it?
It all started with a trip to Orlando, Florida (the United States) where
I was introduced to the concept of multiplexes for the first time and was enchanted by the new-age amenities of multiplexes. As a concept it was very appealing to me and I thought it would be well accepted and appreciated in India, a country which thrives on cinema.
On returning, I started my venture with the renovation and transformation of the old and dilapidated Priya Cinema into a modern, youth-centric and plush cinema. With this, Priya Cinema also became the first in India to be installed with a Dolby surround sound system.
Contemplating the business expansion at that point, I decided to get a technology partner on board. In April 1995, brand PVR was created following a 60:40 joint venture agreement between Priya Exhibitors Pvt Ltd and Village Roadshow Ltd, Australia.
At the time, when ‘multiplex culture’ was an unknown thought in India and cinema exhibition industry was struggling for its existence,
we revived the industry. With a vision to provide a platform to enhance the movie watching experience to Indian cinemagoers, we introduced the concept with one cinema, and today from a single screen, PVR stands at 477 screens with a strong presence in 44 cities across 107 properties.
What exactly is your vision and mission for this business? How many locations and screens do you visualize in different cities in the coming years?
The company’s focused vision is its commitment to provide the highest quality of cinema viewing experience.
Our ability to reinvent, innovate and challenge ourselves is a testimony to the revolution that we have brought in the cinema exhibition industry.
As innovators in the realm of cinema, our philosophy has always been to push the envelope and come up with unique cinematic experiences for our audience.
We have a robust expansion plan, with equal penetration in metros and tier II and tier III cities. We presently stand at a count of 477 screens and aspire to surpass 1000 screens by 2018 pan India, with equal penetration in the tier II and tier III markets.
The industry is seeing star megaplexes with 15+ screens. Does PVR Cinemas have any such plans?
PVR Cinemas has constantly added new innovations and brought in world-class ideas in the multiplex business. Keeping innovation to its core, PVR is now coming up with yet another world-class concept of the ‘Superplex’, our biggest property with 15-screens in India. Superplex contains different world class formats under one roof. With this, IMAX technology will also be introduced to North India for the first time.
Our endeavours to offer the best to its audience takes another leap with an exclusive kid’s zone- the ‘Play House’, an auditorium dedicated fully to the little audience. Along with this, the auditoriums would also encapsulate the most advanced state-of-the-art audi set-up. The property will also have Dolby Atmos to provide patrons the most immersive cinematic experience. With its newest innovation, our cinemas envision to capture a wide spectrum of consumers and provide peerless family entertainment package.
Do we see PVR Cinemas going abroad in near future?
Even though India leads the world average in terms of movies produced each year, the gross under penetration of screens continues to be a cause of worry for the industry. India produces more films than any other country; but the country is under-screened with only 9000 screens – 2,100 multiplex screens and rest single screens – while China has 26,000 and USA 39,000 – with its far lower population. Whereas, China opens about 4,000 to 5,000 screens a year and we in India barely manage about 300 screens. Though, India is also a growing economy and there is huge potential within the country itself hence, we want to focus heavily on the Indian markets as of now (including tier II, tier III and metropolitan cities).
PVR is amongst top 10 multiplex chains across the globe in terms of footfalls with a dominant leadership in India with 30-35% share of Hollywood box office, 22-25% of Bollywood box office and 40-42.5% regional box office. It encapsulates
4 mn sq ft of operational retail space and another 3 mn sq ft under development with 60 mn tickets sold in FY 13- 14. We clearly see that the Indian exhibition industry has a lot of scope to grow.
As of now, we would like to focus on delivering the best cinematic experience to our patrons.
The market is replete with groups and operators jostling for space. What is your plan to keep the PVR brand number 1?
We have been quite audacious with our expansion plans. Being in the industry for almost two decades, we understand that one of the important building blocks of a successful film entertainment and retail business is location. When it comes to designing multiplexes,
PVR chooses the location of its property from a holistic point of view. Granular details like target market segment, socio-economic strata and the catchment area are examined in detail. Also, we always form a sustained relationship with our developers and have been blessed to get strategic locations for our properties.
It’s an age of Immersive technology, laser format,
3D digital and large format like IMAX, and sophisticated ticketing processes. How is PVR Cinemas embracing these technological advancements?
PVR Cinemas is a company of many firsts. We have been the first ones to offer online ticketing, queue- less box office and ‘on the seat’ food offerings. We are also the first multiplex to have 3D enabled screens at all our multiplexes. From introducing the Enhanced Cinema Experience (ECX), PVR has two IMAX enabled screens in Bangalore and Mumbai. Shortly we will be launching India’s first Superplex in Noida. PVR is also the first company to have signed the biggest deal with Dolby Atmos to install their premium technology of Dolby Atmos across
50 screens at pan India level. Further, the 4DX technology will soon be visible at our selected properties.
From being a conventional cinema exhibitor, PVR underwent a great deal of change with CJ4DX and Dolby Atmos. How did this transformation happen?
Cinema exhibition business is extremely dynamic. Entertaining people is a serious business. Hence, we need to constantly innovate and upgrade ourselves (technology, ambience, content) so as to provide the best. Leading the industry since past two decades has been a journey of many innovations. Taking the technological advancement to a different level, PVR is all set to introduce CJ4DX in their cinemas and have Dolby Atmos across 50 locations to provide the most immersive movie watching experience to the patrons.
Multiplex operators today support too many specialty offerings (inspired from international chains) boasting their edge over others. How about PVR Cinemas?
PVR has always been a risk taker and has brought in unconventional innovations to India. It is the first company to introduce computerized and online ticketing, credit cards acceptance in cinemas to ease the consumer interface. PVR is the first company to bring the concept of alternate content in India – PVR Live and the first cinema exhibition company to bring a 15 screen Superplex concept in India to offer an unmatched wholesome family experience.
Over two decades, we have realised that no two movie-goers are the same. Hence, we have a dedicated team to cater to each catchment of society, based on age, class and choice. We have different programmes for kids like Kids Day Out, where we provide children centric movies. We have programmes like Senior’s Day, where we provide special services to assist our senior citizens while watching movies. PVR also brings internationally acclaimed content through Oscar Film Festival, Toronto International Film Festival and is a host to renowned film festival like MAMI in India.
Under PVR Pictures, PVR has brought to its audiences good content films ranging from Hollywood movies, Bollywood and even regional movies offering its patrons diversified content. Under PVR Director’s Rare banner, we also support independent filmmakers by releasing their films to offer unconventional content to niche audience.
PVR also offers grand spectra of cinema formats like, PVR Gold Class, Director’s cut, PVR Premier, PVR Heritage, PVR IMAX, PVR ECX, PVR Cinemas, PVR Talkies, and the soon – to be launched PVR Superplex to cater to a wide varied horizon of cinema goers.
How different is PVR Cinema from others in terms of ambience, services, pricing and cinematic luxuries?
PVR has played a catalyst in bringing the ‘multiplex culture’ in India.
We try to leave no stones unturned to provide the next-level of cinematic experience to our patrons. One can easily experience it through grand architecture, design and facilities provided at our properties. With Director’s Cut, PVR has provided the ultimate cinema watching platform to the Indian movie connoisseurs. We have ‘at your seat’ facility at our property. We also take care of the taste buds of the patrons that visit us. We have offered a wide range of food and beverage options for our guests at our various multiplexes. Now we have gone beyond the standard sandwich/ burgers, and have introduced the concept of Gourmet food at our cinemas.
Tell us about PVR’s major JV
PVR bluO is a prestigious joint venture between PVR Cinemas and Major Cineplex, Thailand which has redefined interactive entertainment both in terms of scale and experience. bluO as a niche, sophisticated brand, operating upscale entertainment centres, offers diverse highlights such as bowling, global cuisine and innovative concepts under one umbrella.
Is this JV only in metros and big cities or spread all across the country including tier-II and tier-III cities?
Presently, bluO has 6 centres across Delhi/NCR, Bangalore, Chandigarh, Gurgaon, Pune and Ludhiana.
Tell about the share holders’ reaction to Cinemax and
DT Cinemas acquisition.
Shareholder’s reaction to Cinemax acquisition has been very encouraging and positive. We are extremely satisfied with the way Cinemax acquisition and its subsequent integration with PVR has played out.
Recently, PVR Ltd executed definitive agreements with DLF Utilities Ltd. to acquire its cinema exhibition business, which is operated under the brand name of ‘DT Cinemas’, on slump sale basis. The proposed transaction is subject to applicable statutory and regulatory approvals. We would be able to comment more on this acquisition once the process of all approvals are completed.
Tell us more about PVR acquiring majority stake in Zea Maize.
PVR has brought major stake in Zea Maize Pvt Ltd, which owns the Delhi-based startup 4700BC Popcorn in process to offer Gourmet Popcorn offerings to its customers, and lead the Popcorn consumer market in India. Gourmet Popcorn, since its entry into India, by 4700BC Popcorn, in March 2013, has been receiving a great love from consumer, with continuous demand even from Tier-II cities. The future looks very promising of this product, which now needs to expand to other parts of the country.
Tell us more about PVR Pictures’ partnership with major studios and the TIFF.
PVR Pictures enjoys great relationships with all key studios such as Lions Gate, Annapurna, Lotus, New Image, Europacorp, StudioCanal, FilmNation, IM Global, Weinstein, Sierra Affinity, etc.
The Toronto International Film Festival (TIFF) which has become the launching pad for the best of international, Hollywood and Canadian cinema this year screened nine films from the PVR Pictures banner amongst other critically acclaimed international films.
They include Sicario, Legend,
The Program, Equals, Demolition, The Idol, About Ray (Three Generations), Youth and Trumbo.
In the last two years, many cinemas have been shutting down (almost 3000 screen closed down in past 2 years). Contrastingly, in China alone, 5000 screens were added last year. In your opinion, what are the major reasons for the contrasting Indian scenario? Is it lack of technology awareness or good content or anything else?
Indian entertainment industry is replete with a lot of constraints. From high entertainment taxes (Delhi Government increased the Entertainment Tax by 100% recently), high operating cost to slow infrastructure growth more specifically Mall growth, finding apt location and getting statutory government licenses and approvals are major hindrances for the multiplex industry . Also some states have the restriction on the number of shows and ticket pricing. In our estimates, India has the capacity to absorb 10,000 multiplex screens or even more.
India is the highest producer of movies in numbers (1100++ in 2014) yet producers complain they don’t get theatres to release their films. Can you throw some light on the scenario – number of screens vis-à-vis number of movies released?
Even though India leads the world average in terms of movies produced each year, the gross under penetration of screens continues to be a cause of worry for the industry as domestic theatricals is the primary source of monetizing content for most films. India has approximately
7 screens per million people, whereas USA has as high as 125 screens / million and China has more than
16 screens per million. Additionally, the screen distribution is also skewed in favour of urban centres. Mumbai Delhi/ UP circuit together constitute approximately 60 per cent of the total box office collections for most Hindi films. Thus, besides inorganic growth, many exhibitors are also investing in organic expansion especially in tier 2 and 3 cities to capitalize on the opportunity of lower screen penetration. PVR, with its robust expansion plans, presently has 477 screens successfully running in the country and aims to cross the mark of 500 screens with the motive of providing an international experience of movie watching to its audience. We focus on providing patrons with an excellent cinema experience in both metropolitan as well as smaller cities.
Do you think television and home cinema are threats to the cinema exhibition industry?
Television, Home Video and now online streaming have been a competition to the cinemas industry for many years. However, this is not the first time in history that cinema operators have faced such a major threat. In West, the introduction of television in the 1950s dampened demand and deterred cinemagoers over the next few decades, but the introduction of multiplexes and releases of more blockbusters provided the industry with a significant boost. Yes, the movie itself is a key part of deciding to go out to the theatre, but it’s the overall theatre-going experience that really drives people. Lots of people decide they want to “go out to movies” before they even decide what movie to see. Going out to the movies is a social experience, and the problem that theatres are facing isn’t that home theatres get the content too early, but it’s actually the fault of theatre owners who are not investing in making the experience good.
We recognize that making the theatre experience better is the strategy that will work in the long run. While we do spend enormous amount of time in dealing with Industry issues such as windows and online streaming and piracy, at the same time, we also put a lot of effort in giving people reasons to go to the theatre. People want to go out. People want to have a special experience and enjoy being out with friends. That’s what we would like to capitalize on. People can stay home and eat, but restaurants still do fine business, because people want that better experience of going out to eat. The same is true for going to the movies, but only if we recognize that we have to make that an experience worth going out to.
How does PVR Cinemas look at anti-piracy issue in the country?
Piracy continues to be the biggest problem that we face in the entertainment business today. Our internal estimates peg that the industry losses about 25%- 30% of revenue every year. Piracy is not only affecting the film producers but the government is also losing a lot in form of taxes slipping out of their hands. One pirated copy of the film recording uploaded on the web leads to huge amount of loss for the producers, and others employed in the business of film making. The industry is probably providing bread and butter to lakhs of people and it is dismal to see that quarter of its profits is directly marred due to piracy. With entertainment tax increasing to 40% in a few states, the situation has become even more difficult. We, as the biggest cinema exhibition company, feel it is our responsibility to educate people by showing anti-piracy ads before film screening.