The Hindu Business Line : Pyramid to be world’s biggest theatre chain by year-end

The experiment of having teachers take private tuitions in movie theatres is one among the initiatives PSTL is trying out. Another one, now being test-marketed, is to sell subscriptions instead of tickets.

M. Ramesh

Chennai, July 15 Want a maths tuition? Go to a movie theatre.

Pyramid Saimira Theatre Ltd (PSTL), the Chennai-based film production-cum-distribution company, worked on such an experiment in Belgaum last month. “The response was massive,” says the company’s Managing Director, Mr P.S. Saminathan.

The company has (on lease) 402 screens at 340 cities and towns and these movie halls are unused in the mornings. Why not get teachers to give their private lessons to students there, of course, free of cost?

For the Rs 165-crore PSTL, its business is all about increasing footfalls. The company, which expects to become the world’s top theatre chain company by the year-end, has one big asset to sweat — space. Get people come, and you can do many things. For example, won’t the students buy a cup of coffee?

Today, PSTL has 3,00,000 seats across locations, which according to Mr Saminathan, only half of the world’s biggest theatre company — Regal of the US.

With the Rs 370-crore raised through an FCCB issue last month in its kitty, the company intends to lease another 400 screens. When that happens, it expects to occupy the global top slot with over 7,00,000 seats.

But 800 screens is a lot of space. Even with half the number of screens today, Mr Saminathan reckons the company uses only a third of the 4 m sq ft space.

Backed by this asset, PSTL feels that its business could be defined in two tasks — get people to come, get them to spend money.

Getting footfalls

You will get a biometric smart card, using which you may get into any theatre of PSTL and stay there for any length of time. (Of course, for peak hour shows you may have to make a reservation, for which there is a call centre.)

“We want theatres to be a good place to hangout, like Starbucks,” says Mr Saminathan. Today, when a person exhausts his monthly film budget, he doesn’t come to the theatre.

“But with the subscription, he could come again and again, because he is not charged per transaction.” The use of the card will also generate a huge database, which could be further leveraged for business opportunities.

Making them spend

Any revenue sacrifice due to selling subscription instead of tickets is made good by spends at the concessions.

But apart from foods and beverages, PSTL has a few offerings for the customer. For example, it has got a marriage exchange to set up offices in its theatres. On the anvil is a plan to get retail showrooms too. So, you go to a theatre, buy groceries, have a cup of coffee, watch a movie for sometime and head back home.

PSTL’s strategy has been to first eliminate the middleman — the distributor —and straddle the market with presence in both film production and exhibition.

According to Mr Saminathan, each year, the company wants to produce movies worth Rs 1,000 crore.

For the current year, the company has earmarked Rs 100 crore of its FCCB proceeds for production.

Its wholly owned production subsidiary, Pyramid Saimira Productions Ltd, is close to getting Rs 250 crore of private equity funding. Thus, with a corpus of Rs 350 crore, the company expects to make movies worth about Rs 1,300 crore in the current year.

Part of the FCCB (conversion price: Rs 454 a share) money will be used for buying theatres.

Today, PSTL does not own a single theatre; all its screens are leased. But it now intends to buy movie halls “for depreciation benefits.”