PVR Inox MD Ajay Bijli counts on South film lineup but says polls hampering release flow

PVR Inox launched a seven screen luxury property in Pune.

India's top multiplex chain PVR Inox is counting on upcoming releases from down South amid a dry spell in the content flow that is driving sluggishness in the theatre industry.

"A lot of south Indian big movies are coming like Pushpa 2, Kalki, Indian 2. I am personally looking forward to the release of Kantara (Chapter 1), said  Ajay Bijli, managing director, PVR Inox.

He is also betting big on the South market for screen expansion. "South is a market I really love because consumption is not only of English and Hindi, but also Malayalam, Kannada, Tamil, Telugu language content. It is still very under screened in terms of multiplexes. So, we are pretty bullish on our expansion in the South."

However, theatres are struggling with lack of content to play on the big screen in April and May. Many exhibitors operating single screens as well as multiplexes are cutting down shows or shutting down temporarily until the content pipeline stabalises. For many exhibitors, the situation is such that they are struggling to make ends meet.

On the current weak content lineup, he said that this happens if some massive event happens. "It's election (time) so movies cannot be released everywhere. Because wherever elections are happening in those centers the cinemas are closed. But I think by the end of this month, the flow of films will come back. Also, during a lull period, occupancies do come down."

He said that 1,700 films were released in India last year and this year 1,500-1600 films are estimated to be released on the big screen. "There are plenty of films and you never know what can become a sleeper hit like last year's Gadar 2. This is the beauty of our (exhibition) market. It's like an IPL cricket team you never know who's gonna hit a six."

New launch

The multiplex chain operator which has 1,744 screens launched a new property in Pune's Koregaon Park.

"Pune has been one of my favorite cities. We've got the 11th property here and the 71st screen. It's got a huge student population and people love coming and watching movies in theatres. Even the mall developers have done a great job of building the shopping centers. We are trying to keep pushing the envelope of making our cinemas more and more experiential. In the new property, there are five screens which are all luxury, then there is ICE (immersive cinema experience with panels on the side walls of the auditorium) and one mainstream cinema. The difference between watching a movie at home and watching it on the big screen has to be substantial," Bijli said.

Out of the 1,744 screens in 112 cities, 15 percent or 255 screens are in the premium segment which comprises large screen formats such as IMAX, P[XL], BigPix and ScreenX. It also includes experiential formats like 4DX, MX4D, ICE, Kiddles and Playhouse and luxury formats such as Director’s Cut, Insignia and Luxe.

Premium portfolio

The company expects the share of premium screens to grow to 20 percent in the coming years with a total of 24 IMAX Screens in India.

"India is such a disparate market, so for every price point, we need to come up with a solution. There are customers who want to watch movies like Oppenheimer in IMAX who for the two or three hours don't want any compromise and want the experience to be as immersive as possible. So, India is heterogeneous and we want to cater to the needs of every customer."

The EBITDA (earnings before interest, taxes, depreciation, and amortization) margins are better in these formats, Bijli said. "But I am careful about opening the premium and luxury formats because India is a I cannot open it anywhere."

The company sees an EBITDA pay back of 4 years for mainstream cinema with cost per screen of Rs 2-2.5 crore as well as premium and luxury formats for which the expense is Rs 4.5-5 crore per screen.

Affordable and aspirational

Bijli said that 86 percent of PVR Inox portfolio is priced between Rs 150 to 350 because they want consumers to find their properties both affordable and aspirational. "We can't make everything premium. So, be very careful about where the premium formats are coming from. Pune does not have anything which is all luxury. So, we thought of this catchment of Koregaon Park where a lot of affluent people stay. Also, in the Kopa Mall there are big brands like H&M, Apple is about to open here."

The company does have plans to acquire cinemas and will grow organically. "We are picking up the right locations, right properties and building cinemas where there is a demand for movie consumption," Bijli said.