It started as a Dream Way Back in 1997 and Redefined the Entire Industry. With Competition Increasing, PVR is all set for a Strategic shift as it Moves Towards becoming an Integrated Retail Entertainment Co.
How many people would you know who can boast of coming up with a business idea during their honeymoon? Ajay Bijli, Chairman & Managing Director, PVR Ltd. is one man who can joke pretty easily how he was busier thinking about movies than romanticizing the moments during his honeymoon. The man, credited with revolutionising the modern cinema landscape in India, chanced upon the whole idea during his honeymoon trip to Orlando, Florida in 1990. Hailing from a country that consumes Bollywood with an unmatched frenzy and having grown up watching movies in single screen theatres with a trademarked damp, dirty and smelly environment, Bijli was more than surprised when he went to watch a movie in a US theatre. For the first time, he realised that watching movies can be such an inviting experience if packaged appropriately The rest as they say is multiplex history.
Cut to the present, the governing equations of the cinema exhibition business have completely changed and PVR Ltd has emerged as one of the leading players. But the habit of coming up with something fresh and interesting has not changed a bit. And perhaps, that has been a saviour for the company even during the worst of times. How can one forget the 381% year-on-year decline in PVR’s bottom-line during the first quarter of financial year 2009-10, when, owing to the gridlock between movie producers and multiplex owners, the group posted a quarterly net loss of Rs.109.2 million as compared to a profit of Rs.38.8 million in the year-ago period. But few actually know that in absence of Blu-O (PVR’s lifestyle entertainment venture), the losses could have been much bigger in that quarter. The venture, which started in collaboration with the Thailand-based Major Cineplex Group, achieved break even in its first operational quarter clocking revenues of Rs.39.6 million with a 32% profit margin for PVR.
Undoubtedly, the diversification now stands for a better and sustained profitability for PVR and the brains out there are all set to make it large by opening up the country’s first entertainment city spread across a total area of 150,000 square feet. Discloses Pramod Arora, Group President, PVR, “Through this retail entertainment city, we plan to leverage the synergies of our various brands in order to expand into the space of retail entertainment. The success of PVR Blu-O has acted as a catalyst for us to doggedly pursue this format.” The company has some real big plans like 15-screen state of the art multiplex, a 24 to 28-lane bowling alley, Olympic size ice skating rink and microbrewery based Beer Island and food kiosks. PVR, we’re told by the top management, wants to fulfill its dream of becoming an integrated entertainment company. As Ajay Bijli, CMD, PVR, puts it, “The Entertainment City will be a mecca of entertainment in the NCR region as we will house all our formats under one roof. This is a huge step forward for us to realise our dream.”
However, apart from diversification, PVR’s rapid and aggressive expansion has been very instrumental in making its business model fundamentally strong. The group, which only had 51 screens at the end of FY2005-06, now has 142 screens in 31 multiplexes across the country drawing 5.5 million footfalls every quarter (Q2 FY2011) and generating a revenue of Rs.1.05 billion. But then, considering what Bijli has in mind this might just be the beginning. This is because the officials of PVR were quoted in media earlier this year that the group wants to increase its screen count to 500 by 2016. If achieved, PVR then would command a huge share in the Indian film exhibition industry.
However, increasing the number of screens alone will not serve the purpose for PVR. And the group knows it very well. Competitors have spruced up their packaging to world class standards too. To that extent, PVR is continuously putting in effort to be reckoned for the quality of service it provides. Moreover, to attract higher footfall, it has been introducing innovative concepts like the exclusive prepaid gift cards (which can be redeemed against purchase of tickets, food & beverages at the PVR cinemas across the country) that they came up with during this festive season.
With the commitment to build PVR Pictures as a full scale distribution and production company, PVR now intends to gear up its movie production to at least 4 to 5 a year, and also aims to get hold of as many rights as possible for distribution of international movies in India. Besides, it also has plans to get into the distribution of regional movies clearly indicating that now it has made up its mind to diversify and grow in order to become the country’s largest entertainment conglomerate. For that matter, the game plan is ready and it is much bigger than what Bijli thought of during his honeymoon trip. And... action!
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