MUMBAI: India is often the land of contradictions. For everything that is true about India, its opposite is also equally true. It’s no wonder then that despite producing the highest number of movies in the world, India’s screen density remains one of the lowest in the world.
As per FICCI Frames Report 2018, India only has 9,600 cinema screens compared to over 40,000 in both China and the US. This despite the fact that in the year 2017, India produced over 1807 films, more than the combined output of China (944) and the US (789), put together. To put it in perspective, India has an abysmal screen density of 8 per million in comparison with 117 per million in the US.
This anomaly was first noticed by Ajay Bijli, CMD PVR Ltd, more than two decades ago when he forayed into the cinema business with the opening of the first PVR Cinema in Delhi in 1997. Today, PVR commands 821 screens, at 172 properties, in 70 cities (including India and Sri Lanka). On Monday, PVR also launched its first 12-Screen Superplex at Vegas Mall, Dwarka, New Delhi.
Unveiling the property, PVR Cinemas CEO Gautam Dutta said, “In FY 19-20 we have been successful in crossing the 800-screen milestone and are now looking forward to expanding further. With this we are bringing the city’s first LUXE; designed to offer an unparalleled experience.”
From four to 821 screens: PVR journey so far
PVR Cinemas launched India's first Multiplex Cinema PVR Anupam, a four-screen cinema, at Saket, New Delhi, in 1997. In 2004, PVR launched India’s then-largest multiplex cinema PVR Bangalore, with eleven screens. This was also PVR’s first property outside the Delhi NCR region.
Two years later, PVR was listed on the Bombay Stock Exchange and in 2008 it achieved the target of 100 screens in India. All this while, PVR also invested in enhancing the movie-viewing experience and in 2011, it launched PVR’s Director’s Cut, a 7-star movie viewing experience.
Around 2012, PVR went into an acquisition overdrive and bought Cinemax that helped the multiplex chain cross 200 screens. In 2016, PVR acquired DT Cinemas from DLF for Rs 433 crore, adding 32 more screens operating under DT Cinemas to its portfolio. Just two years later, it acquired SPI Cinemas, a leading cinema player in South India with 76 screens operating under brand names like – Satyam Cinemas, Escape, Palazzo, The Cinema and S2. The deal, worth Rs 850 crore, helped PVR Cinemas cross 700-screen milestone and established it as a dominant player in South India.
Speaking on the acquisition, PVR CEO Gautam Dutta said: “It was a natural course of progression for PVR to strengthen its standing in different regions of the country. South is an extremely important market and SPI Cinemas had a magnanimous hold over the region. The acquisition proved to be a profitable investment, with PVR being able to consolidate its position in the country and also in reaping the benefits of making a well-established entry into the region.”
With the addition of 12 Screen Superplex, PVR now commands 821 screens in India, including a 9-screen property in Sri Lanka.
Digitising the movie screen
From opening India’s first multiplex in 1997 to launching India’s biggest multiplex in 2004, PVR has maintained its leading position by constantly investing in new technologies to enhance movie-viewing experience. The multiplex chain has been at the forefront of scaling up premium cinema formats to offer a mix of “exhibition” and “hospitality” experience with deep audience engagement.
PVR has now various movie viewing premium screens in its portfolio like – Gold Class, Directors Cut, Imax (both in 2D and 3D), 4DX (launched in 2015 in partnership with CinemaCon), PVR PXL, (home-grown large screen format), PlayHouse (Kid’s Auditorium), PVR Onyx (India’s first LED screen cinema), and PVR Utsav (catering specifically to Tier-II and Tier-III cities).
In 2018, out of the total 73 new screens opened by PVR Cinemas, 20 were premium screens (Gold Class, IMAX, 4DX, PXL, Playhouse).
At present, PVR operates 4 screens of Director’s Cut, 37 screens of Gold Class, 9 of IMAX, 16 of 4DX, 08 of P[XL], 12 of Playhouse and 1 of PVR Onyx across the country.
Apart from these, PVR is also investing in a host of new cutting-edge technologies. PVR Cinemas and CJ 4DPLEX, the world’s leading cinema technology company; signed a deal at CinemaCon 2019 to open 10 ScreenX theatres in India by 2021. Screen X is the world’s first multi-projection immersive cinematic platform which provides moviegoers a 270 degrees viewing experience by expanding the scene onto the side walls.
In October, PVR unveiled India’s first D-BOX motion seats across five screens in Mumbai. It is also managing PVR Audit-Air-Ium: a clean air theatre format.
Strategy for Tier-II, Tier-III cities: PVR Utsav
India’s screen count remains low primarily due to lack of cinema penetration in tier II, tier III and tier IV cities. This presents a large untapped potential for multiplex chains and belatedly businesses are shedding their exhibitions in entering smaller Indian cities with premium movie viewing formats.
UFO Moviez has launched NOVA and opened properties in smaller cities in Punjab, Maharashtra, Andra, MP and Chattisgarh. Ajay Devgn’s NY Cinemas is eyeing 250 screens in the next 4-5 years with a primary focus on smaller cities. PVR has responded with PVR Utsav.
Dutta describes PVR Utsav as the “culturally and socially sensitive arm of PVR whose main objective is to provide hygienic, safe and secure cinematic experience to the aspirational audiences in tier II and tier III cities across the country. We are planning to enter into markets for the very first time such as Jaipur, Ajmer, Ambala, Patna, Bhubaneshwar and other cities.”
Future Course
The domestic theatrical market grossed Rs 102 billion in 2018. In addition, there are substantial earnings from F&B revenues which are estimated at around Rs 20 billion by FICCI Frames report. This growth in movie business means that PVR’s financials are in a strong position and its profits are increasing y-o-y.
Last month, PVR reported 35 per cent year-on-year growth in its consolidated net profit at Rs 47.67 crore for the second quarter ended September 30, 2019. Its consolidated revenue jumped by 37 per cent to Rs 979.40 crore as compared to Rs 714.65 crore in the year-ago period. PVR’s surging revenue and profits will give the company plenty of room to expand and invest in newer movie-exhibition formats.
There is also a huge untapped potential for expansion in smaller Indian cities and foreign markets as well. The overseas theatricals market for Indian films has grown to $30 billion in 2018.
PVR has just launched its 9-screen property in Sri Lanka and will add a 7-screen in Colombo soon. However, its domestic rival Carnival Cinemas has made significant inroads in foreign markets. In July 2018, it signed the largest overseas acquisition deal for any Indian multiplex. The company entered into a definitive agreement with Elan Group to acquire Novo Cinemas, which operates 104 screens in the UAE and Bahrain.
While for PVR, the next natural target would be to touch the milestone of 1000 screens, its nearest rival, INOX, is determined to close the gap with PVR. INOX already has over 600 screens in India and boasts of maximum new signings (around 900). INOX is a key challenger to PVR in metro cities and PVR’s expansion plans in smaller cities will face stiff competition from players like UFO Moviez and Devgn’s NY Cinema.
While expansion is key, PVR has to tread carefully and be mindful of its huge debt burden. As of September 30, 2019, the company's debt increased to Rs 1,282.52 crore from Rs 1,247.17 crore in March.
The company, however, is optimistic about its future, and rightly so. Dutta says the future growth looks very exciting.
“We are on course to achieve the annual target of opening more than 100 screens in the coming months. The expansion will not only happen in Tier I cities but in Tier II and Tier III cities as well. We plan to introduce new concepts in India which the Indian movie-going audience hasn’t heard of. Apart from the opening of cinemas in new cities, with our enhanced offerings, we wish to increase the market size in the developed cities as well,” he added.
Last Sunday gave us the unusual and perhaps unlikely occurrence of two awesome live telecast finals almost back to back. Not middle of the road pop music cricket, but the intense mastery of stroke making jazz music tennis at primetime, and the ultimate headbanger’s ball later that night. From the classy Federer sporting a pristine white jacket bearing his family insignia, to the crassness of a skirmish that a hero will regret all his life, the evening kept audiences glued to their sets.
(With grateful thanks to aMap for the data and Deepa Menon of Intellect – LMG for the analysis).