By Pranbihanga Borpuzari
For the past four months, PVR Ltd’s Group President, Pramod Arora, has been clocking up air miles as he travelled the world looking for inspiration. In fact Mr Arora travelled so far and wide that he could be soon be dubbed Ryan Bingham – the character played by George Clooney in the film Up in the Air.
Multiplexes are generally not known to be citadels of innovation but in a country where cricket and movies are a religion it is important to keep pioneering to stay relevant. At the heart of this exercise is one of PVR’s one of the most ambitious and largest projects till date – the 15-screen ‘Superplex’ in Noida.
- Pramod Arora
“As plans for the Superplex were drawn, I visited every cinema hall in every part of the world to experience the best practices that we can pick up. At the end I realized cinema industry may not be the correct industry to look at. By looking at the cinema industry we realized that either we were ahead of what others were doing or at par with what they were doing,” says Mr Arora.
Mr Arora turned elsewhere for insights. “In terms of benchmark we decided to compare ourselves to the hospitality industry and also looked at companies like Apple. People say there are no similarities between Apple and the cinema industry but there are immense commonalities.
Mr Arora says the trick lies in making sure the consumer is deriving satisfaction from the product you are selling in the minimum possible time and how a company is able to retain the consumer, once he is serviced, for the maximum possible time. “In this minimum and maximum lies your ability to monetize and this is what we are trying to master. For us it was picking up the thread from various industries across the globe,” says Mr Arora.
PVR now plans to invest Rs. 250 crore to add 100 new screens this fiscal. It currently has 444 screens in 101 properties spread across 43 cities and targets to touch 1,000 screens by 2017-18. The Superplex is expected to be operational by end of March 2015 and the 15 screen complex would cost the company about Rs. 50 crore to develop.
Inception:
According to a KPMG report Multiplexes, as of today, account for approximately 25 percent of the total number of screens in the country with a low screen density of 8 screens per million in comparison with 117 per million in the US. “Given the low screen penetration, India has the potential to significantly increase the number of existing multiplex screens in the country over the next decade without causing an oversupply of screens,” says the KPMG report.
In 2013, the industry added approximately 150-200 screens, with major growth coming from expansion of multiplexes in tier II and III cities. Occupancy levels for major multiplexes players have risen from approximately 23-27 percent in 2011 to more than 30 per cent in 2013.
“In India movie watching theoretically begins from the age of 5. If we look at cinema halls we will see that we do not provide anything for five year olds except sit on their mother’s lap and cry or disturb others around them. We have realized that the categories of ages 5-9 need to be addressed,” says Mr Arora.
Mr Arora says PVR Superplex will have a special auditorium designed called the ‘PVR Playhouse’- an exclusive fun and entertainment destination for children. PVR Playhouse will witness a space exclusively for kids to be at their natural best. The auditorium will have half dim light – brighter lighting than other formats, cartoon characters both on and off screen and special seating facilities like bean bags to create a comfortable environment. “For younger kids, PVR will provide visual attractions like play seats, playful interiors and the middle alley will resemble a slope just like a slide for kids to enjoy. Keeping in mind the safety of kids, the flooring will have a rubberized surface for an easy topple,” says Mr Arora.
PVR will also operate on the opposite end of the age spectrum as the new multiplex would also have a different screen for senior citizens.
Avatar:
PVR is well aware that technology changes fast and multiplexes in days to come may not be the preferred medium for cinema as home theater screens are becoming better and bigger. “For example HD has become table stake today and we have understood that if we do not make our medium more immersive, it is not really going to deliver the bang for the buck for the consumer,” says Mr Arora.
For an immersive movie viewing PVR is addressing the sound and the elctroacoustics in a much more superior way. “George Lucas has done this in the US for time immemorial but why people have not taken it up is because it is expensive,” says Mr Arora.
He adds that PVR took two years to re-engineer the technology at a fraction of a cost. “For example if it rains in the movie, you currently hear it from the surround system or from the speakers behind the screen. For you to be able to feel rain the sound must come from the top and when it falls to the ground, the sound must come from the bottom. From an engineering perspective, it is a very big problem but we have worked on it and managed to reduce the cost associated with it,” says Rao.
With respect to screens the ones in cinemas today is flat. PVRs new screen would be curved or concave, which would provide a more immersive and greater viewing area. PVR says there is a perceptible difference in viewing. “These Silver screens are more expensive to the tune of about 200 percent but since it lasts for about 20 years so it’s worth it,” says Mr Arora.
Five formats and a playhouse:
This will be the first time PVR brings all its brands under one roof. PVR currently runs five brands ranging from IMAX, ECX (enhanced cinema experience), PVR Premier, Directors Cut, PVR 4DX in India and with the addition of PVR Playhouse will operate six formats, all under one roof. “PVR stands as a strong mother brand and we were looking to introduce the other brands of cinemas. IMax is one of them and then we go on incorporating multiple other brand that PVR straddles under one roof. This way failure of one brand will never be able to define or shape the final outcome of the mother brand,” says Mr Arora.
According to Emkay Global Financial Services research report, PVR enjoys a market share of 20-22 percent and 30-35 percent of Bollywood and Hollywood box-office film revenues, respectively. This provides better negotiating power for content sharing with distributors/producers. Its right location strategy and aggressive expansion plans would continue to drive footfalls and revenues, going forward. Emkay also sees robust growth in F&B and advertisement, which would help drive revenue/EBITDA at a CAGR of 17 percent/23 percent over FY14-16 (estimate), resulting in healthy cash generation.
Chocolat:
As discretionary spends on eating out is on a rise, if cinemas go on serving the consumer with Soda and popcorn, it is not going to take them far. “The consumer is ready to pay money but they need quality and service. In a cinema environment it is challenging to provide gourmet chef driven menu but we have decided to push ahead. We have decided to come up with a menu that change with the season and that is being mastered now and by the time the complex is open, he would be ready to cater to all,” says Mr Arora.
A multiplex has limited retail space to display food items so PVR will push information on food on cinema goers’ mobile phones and through specialized tablets. “We will have a large base kitchen in the multiplex and once you order your food through the PVR app or through the tablets we will have in the multiplex, fresh food will be delivered to your seats. Different strokes for different folks as senior citizens will get large plasma screens to make their food choice,” says Mr Arora. KPMG says currently, an exhibitor’s revenue comprises of 70 percent of ticket sales, 20 percent of food and beverages and 10 percent of cinema advertising.
A. I. Artificial Intelligence:
Major corporate houses have multiple Customer Relationship Management (CRM) systems running but when it comes to engagement most companies in India have been going wrong. “Forget about going into predictive intelligence, many have not even been able to identify the sex of the individual whose mobile number they have in their database,” says Mr Arora.
The mobile app of PVR, developed in-house, now uses predictive intelligence where it knows what you have been watching, what you like, what you did not and a plethora of data around an individual’s movie watching habits. “We envisage a situation where you are a part of a community that wants to watch a movie like Mughal-e-Azam, which is not running in the cinemas; you should be able to book a cinema for that movie if say 60 such individuals decide to watch it on a particular date and time,” says Mr Arora.
Source:The Economic Times
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