PVR could exceed 80 screen expansion plan in FY20, says Kamal Gianchandani
MUMBAI: Multiplex chain PVR will exceed the earlier guidance of adding 80 screens in FY20. The company plans to deploy Rs 2.5 crore as capex for adding new screens.
Speaking to TelevisionPost.com, PVR chief business planning and strategy & PVR Pictures CEO Kamal Gianchandani said that the company might add more than 80 screens during the fiscal. It has given a guidance of adding 80 screens during the fiscal.
“We will meet the guidance at the minimum. The whitespace is the next 50 towns but even in big cities there are pockets that deprived of good quality exhibition infrastructure,” he stared.
He also added that FY19 was the best year for PVR in a decade and it hopes to maintain that momentum this fiscal. He noted that the results could be even better as there are six more months to go.
Gianchandani said that the company has not been hit by the slowdown so far. Ticket prices, he noted, have been grown by 5-6% year on year which is also the inflation rate.
“Our business has the pricing power,” he averred.
He also revealed that the Capex plan is Rs. 2.5 crore a screen which translates into around Rs. 200 crores give or take Rs. 20-25 crore. This is the market guidance given. Being mindful of costs is a big area for the company to improve the P&L.
PVR, he said, is constantly looking at innovations to serve consumers and grow average revenue per user (ARPU). He also stated that technology plays a key role in this. PVR already operates in the IMAX format for instance.
Now it has done a deal with D-Box Technologies to offer a more immersive experience. D-Box seats offer an experience that makes the movie going consumer feel more a part of the action.
According to Gianchandani, the plan is to have D-Box seats for around 70-80 Hollywood movies. The deal for Indian films starts with the upcoming Yah Raj release ‘War’ and the target is to tie up with 10-15 local films. D-Box is talking to Indian movie producers and says that they are keen on doing it.
In terms of revenues, ticket sales contribute 57.5% of the total revenues; however, the revenue dependence on this stream is expected to go down. Food and beverage contribute 27.5% and the expectation is for this to go up to 30-32.5% in the near future. Ad sales contribute 10% while smaller segments contribute 5%.
D-Box, he noted, is a pioneer in motion based immersive experiences within cinemas. The plan is to start with 11 screens in Delhi and Mumbai. Consumers’ propensity to spend, receptiveness to the new technology is among the factors that will determine the D-Box rollout. In the top 15 cities, the behaviour is homogeneous.
“PVR is constantly trying to augment its portfolio of formats and offer unique experiences to our patrons. We have been trying to work out a relationship for a long time. Finally, this marriage came about. Producers that we work with will decide whether or not D-Box is a format they want to work with.”
In terms of the investments being made he declines to share numbers saying that these are early days still. “What we can share is that on premium screens we tend to invest 50-60% more than on a regular screen.”
Talking about the role of technology for PVR he said, “Technology is a critical piece and it is playing a part in every business when you consciously advance initiatives and make them digitised whether they are internal processes or consumer-facing or backend stuff. Technology is key whether you are savvy and do it as a thought leader or even if you are not savvy. In that situation, market forces will make you move in that direction. Consumers are used to consuming digital services.”
Giving an example of the importance of technology for the exhibition business, he said that India continues to be a 3D market which is not the case with the West where 3D is sort of depleting. “Films that release in 3D and 2D in the country see 75 per cent of their revenue come from 3D. We don’t see this changing in the near future. Indians are technologically savvy, like to experiment, are aspirational. This contributes to this behaviour.”
Gianchandani said that PVR has a lot of technological interventions in different aspects of the business. Formats include IMAX, 4DX, the luxury format screens called Luxe, Playhouse for kids and family audiences. Then in Delhi, there is Director Cut and it includes a Clubhouse adjoining the cinema.