‘We expect to touch the 1,000 screen-mark by 2021-22’

Leading exhibition player PVR Ltd, which opened its first multiplex nearly two decades ago, aims to touch the 1,000 screen-mark in the next 4-5 years. On the sidelines of CineAsia 2017 held at Hong Kong, Ajay Bijli, Chairman & Managing Director, PVR, spoke about organic and inorganic growth opportunities, international markets and new formats. Excerpts:

PVR currently operates 600 screens in India. What are your future growth plans?

India is still grossly under-screened when we compare it to markets such as the US and China. So there is plenty of scope for expansion. We need to focus on growing our presence in smaller towns. At the same time, we need to increase our screen count per property and focus on building bigger multiplexes. So, on an average, we aim at adding about 80 screens a year.

We are also investing on refurbishing our older multiplexes, adding new formats and bringing in new technologies such as 4DX, IMAX, P(XL). So on an average, we invest about ₹200-250 crore annually. If we just grow organically, we expect to touch the 1,000 screen-mark by 2021-22. We are also looking to launch a new sub-brand targeted at smaller towns.

Are there any inorganic growth opportunities?

There are some opportunities. There are many regional players with about 50-60 screens who do not have the capabilities to scale up. But it has to be at the right valuation and it needs to be the right fit for PVR, with good quality multiplexes in the right location.

As you receive the “Exhibitor of the Year” award at CineAsia 2017, it has been two decades since you launched the first multiplex. What has been the key milestone in this journey?

It’s great to be recognised, and it gives you a chance to pause and reflect upon the journey. But there is still a long way to go, and (there are) many accomplishments that need to be achieved and challenges that need to be navigated. There have been many milestones in this journey.

Whether it was getting a global major such as Village Roadshow to take a punt on India and forming a JV and opening our first multiplex back in 1997, getting private equity investments at a time when they hadn’t yet looked seriously at the multiplex space, getting listed and building a multiplex chain at a time when there were no such chains in the country, or making acquisitions to expand our presence... there have been many milestones in our journey.

PVR recently bought a minority stake in the US-based luxury restaurant and theatre company, iPic-Gold Class Entertainment. What are your plans for international expansion?

We found that iPic has a very unique model. It is completely experiential and there is a lot of emphasis on food and beverage as well as on diversified content. For a small investment, I will get a seat on the board. So, we thought it will be a great learning opportunity, which will help us bring best practices into our luxury cinema format in India.

It is important to be in touch with what’s happening in the developed markets. As far as international expansion is concerned, we are open to it. But I don’t think we will go with a “me-too” strategy. Some of these markets are very developed and we are under no illusion that we can disrupt the market. So, we will only go in such markets if we can offer a differentiated experience.

Do you see expansion opportunities in the less mature or emerging markets?

We have been examining such markets. We will open two properties in Sri Lanka. These will get launched in the next 24 months. But we really want to examine and study a country before we enter any new market.

With the emergence of various digital platforms, the theatrical windows are shrinking. How are you looking to navigate this challenge?

Nearly 60 per cent of the revenues of a movie still come from big screens. We think it’s a short-term strategy to bypass the theatrical window and straight away move on to other platforms. People are still keen to watch movies on the big screen and, of course, we have to work harder and offer a differentiated experience.

From an economic point of view, it is not viable for producers to miss or shrink the theatrical window and go to other platforms. We are collaborating with the studios and are confident that we will find a solution that works for all stakeholders. Even in mature markets, such as the US and the UK, a three-month theatrical window is still maintained.

(The writer was in Hong Kong at the invitation of PVR Ltd )

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