Taking India to the Movies: PVR Cinemas and Ajay Bijli celebrate 20 years of growth
Considering that India is by far the largest film-production country in the world in terms of the sheer number of new local movie titles being released each and every year, the nation remains woefully underscreened. Presently, there are only about 9,000 screens in the entire country, of which about 6,000 are traditional single-screen cinemas (a majority of them standalones) and the remaining 3,000 are part of multiplex theatres. That works out to an extremely low saturation of only about eight screens per one million of the population. Yet this situation provides an excellent opportunity to drive further expansion for PVR Ltd., India’s largest cinema chain and CineAsia 2017’s “Exhibitor of the Year.”
“PVR is well poised to take full advantage of the growth opportunities that India offer and we will more than double our tally of screens over the next six to seven years,” the company chairman and managing director, Ajay Bijli, tells FJI.
Originally founded as a joint venture with Australian mass media and entertainment group Village Roadshow Limited in 1997, PVR became a wholly independent venture in 2001 and was listed on the National Stock Exchange as well as the Bombay Stock Exchange in 2006. The circuit currently operates 600 screens spread out over 131 properties in 51 cities across 18 Indian states and one Union territory (Chandigarh), serving approximately 75 million audiences annually. Thus far, PVR venues are primarily concentrated across India’s western regions, with Maharashtra state being the best served with currently 38 properties comprising 160 screens. But expansion into the central, northern and southern regions also has made impressive headway. “If you look at our geographical spread map, it's now quite evenly balanced, barring east India,” Bijli remarks.
The multiplex phenomenon in India is a relatively recent development, only having kicked off 20 years ago when PVR opened its first four-screen multiplex in Delhi. Prior to that, India was dominated by traditional single-screen, often enormously huge theatres, typically with a capacity of up to 1,000 seats each. But ownership was fragmented and there was not even one nationwide cinema chain present. As smaller independent domestic movies and foreign-language films were receiving almost no playtime at all, patrons were left with little movie choice apart from the usual run-of-the-mill Bollywood fare. Additionally, exhibitors often found it difficult to fill up such large auditoriums. Things turned to the worse in the 1990s, when exhibitors suffered a downturn due to the onslaught of cable TV, video parlors, VCRs, VCDs, DVDs and, yes, movie piracy. “All of these factors resulted in a broken business model, which impacted cinema owners’ ability to invest in comfort and technology and created a negative cycle and perpetual decline in cinema attendance,” Bijli explains.
The time had obviously arrived for multiplexes to appear and try to turn the situation around. But it wasn’t a walk in the park. “You had to have the right mall development opportunity where we could locate a venue, the right entertainment tax structure, building bylaws, and other [state government] regulatory issues had to be considered, too,” Bijli elaborates. “But wherever we felt that the economic model would work for us, we opened. Geography didn’t matter to us that much, but the already-mentioned factors had to be rightly aligned.”
Since then, multiplexes have brought about a revival of the once-ailing exhibition industry, and although PVR certainly was at the forefront of this resurgence, Bijli modestly gives credit to competing companies as well. “I would say it’s all been a collective effort by PVR and the other cinema operators.” In any case, the advent of multiplexes without doubt had a very positive effect on several levels. It shored up previously foundering audience numbers, considerably improving auditorium occupancies in the process, it triggered the technological modernization of the industry, and it realigned ticket pricing. And, of course, it also brought a lot more luxury to the moviegoing experience as such thanks to ultra-comfortable seating and a more hygienic and safer environment, moving India’s exhibition landscape towards world-class status.
But while PVR multiplexes generally are plush and hyper-modern affairs and Bijli concedes that “we definitely have been on the vanguard of tapping into the luxury segment,” this has not been the company’s sole focus. “Ours has been a multi-pronged strategy to cover all segments and demographics, and PVR’s goal from the onset was to get people out of their homes to watch movies on the big screen by giving them a premium, superior moviegoing experience—but at every price point.” Accordingly, admission prices at PVR theatres—depending on the category—start from as low as only $1.50 and gradually move up to as high as $20 per ticket. “India is not a one-size-fits-all economy and therefore we cater to all pocketbook sizes among consumers.”
Besides treating movie fans with comfy seating and air-conditioned auditoriums decorated in warm colors and fitted with soft carpeting, another strong point of PVR is its drive to consistently introduce screening technologies hitherto unheard of in India. For example, the circuit currently operates six IMAX theatres, with two of them being located in Bangalore and one each in Mumbai, Noida, Delhi and Gurgaon. “And we have plans to take the tally to a total of ten by next year,” Bijli discloses. The company presently also operates three 4DX theatres, with a view to add another 17 within the coming two years. Furthermore, PVR has recently launched its in-house-developed premium-large-screen format called P[XL].
“This is the first time in India that any multiplex operator has come up with its own screen format. We aim to have ten such screens in the next twelve months,” Bijli reports. And with countries like Korea and Japan already successfully implementing projector-less screening, PVR is eyeing an introduction in India as well. “As a pioneer of new cinema exhibition technologies in India and believing in keeping pace with changing times, we are definitely keen on acquiring [projector-less] technology and are already discussing that possibility with various developers in the field in order to become the first exhibitor to introduce such a technology to the country,” Bijli says.
In India, just like elsewhere in the world, concessions also have become an integral part of the exhibition business. Largely gone are the days when F&B offerings merely constituted a “filler,” a supplemental customer service without substantial impact on the overall revenue stream. Nothing goes to demonstrate that fact better than PVR’s investor presentation, which states that concessions sales currently account for approximately 41% of the revenue yield per ticket sold.“We are the trendsetters in cinema F&B, as we constantly innovate on our F&B menu with healthy drinks and healthy foods such as freshly baked bread imported from France, or Japanese sushi and edamame beans, all that to cater to ever-changing customer palates,” Bijli says, adding that India has a low ATP when compared with other markets, and that its continuous innovations in the concessions arena help to bridge this gap.
PVR pursues a strategy of being an “all-round immersive moviegoing experience.” Or as Bijli puts it: “Our venues are not just cinemas but rather out-of-home entertainment destinations.” The most precious asset consumers have today is their time, Bijli observes, and hence the company wants to help maximize that asset even before people venture out to their nearest PVR theatre. Whether it is ticket booking through PVR’s cellphone app, its website or at one of its Quick Tix kiosks, or whether it is ticketless entry, plush recliner seats, or at-seat food service coupled with a varied F&B menu, Bijli says his company’s aim is to “pamper the customer enough so that he can have the perfect three-hour holiday together with his family and friends. This is our core strategy,” he adds, “and as a cinema chain we observe it across all our venues wherever they may be located.”
PVR’s success hails from the company’s restless pursuit of “always arriving at something better than there was yesterday.” “Our propensity to experiment sometimes leads us to offer concepts ahead of time [i.e., before anyone else has picked them up], and even if we run the risk of failing, we’ll still try it out because we take it as a learning experience and approach the problem again from another direction,” Bijli states. India certainly is the perfect playground for this. The still-prevailing lack of screens juxtaposed with the huge demand from moviegoers favors forward-looking companies like PVR and makes the country like no other market in the world.
Yet there still is at least one point that Bijli thinks should be urgently addressed. “We need more support on both state and central government level with regards to making [exhibitors’] tax burden more palatable and comparable to other markets.” The current government sales tax rate of 28% is too excessive and hurts not only PVR but everyone else in the business, too. “Adjusting it down to 18% would be a huge boost to the whole industry.”
“To be recognized on a global platform like this, which is considered very prestigious in our industry, certainly feels good. But it is also testimony to the people behind the brand who have worked relentlessly to ensure the sheen of the brand always remains. I am privileged to have a great team! My brother Sanjeev has been involved right from the beginning, so I share this award with him. It is a great honor indeed and we are humbled, but at the same time we will not get complacent, as there are still so many things for us to accomplish [with PVR].”—Ajay Bijli