August whets Indian appetite for cinema, augurs well for Q3, says PVR INOX co-CEO

'Every location we need to look at, we have to do some macro planning. We do a very deep analysis of the consumer, the quality of consumer within a catchment of 5 kms and their propensity to pay,' he said.

Luxury screens may be a new concept for the Indian audience, but the surge in footfall witnessed in August show a diminishing price sensitivity in this market and the growing appetite for cinema - something the multiplex chain PVR INOX expects to cash in on in the upcoming festival season, which will see many a big ticket release. Speaking to DH’s Anjali Jain, co-CEO Gautam Dutta, talks of its strategies to harness the renewed interest in the big screen and options opening up in the premium segment, having just opened its first Immersive Cinema Experience (ICE) screen in the South.

Edited Excerpts.

What are your plans for expansion in the luxury or premium segment?

In our current portfolio, roughly about 13.5 per cent of our total screens are premium which includes the Insignia, Lux, 4DX, Director’s Cut, Sapphire, Big Pix, all brands of Onyx like Screen X and Club X. These 13.5 per cent normally end up generating a lot more revenue and contribution, close to about 16-17 per cent of the total revenues. We want to get to between 15-18 per cent over the next couple of years. ICE is the new kid on the block and hopefully if the response is good, then we may expand to many more cities with that. We already have one experiment with Delhi, one with Gurugram and one now in Bengaluru and one that should open in Mumbai soon.

Overall, we'll be opening close to about 150-170 screens every year. These are new screens, which is an amalgamation of the normal screens and some technology screens.

How do you scout for locations in the luxury segment?

Every location we need to look at, we have to do some macro planning. We do a very deep analysis of the consumer, the quality of consumer within a catchment of 5 kms and their propensity to pay. There are certain technologies that only work with Hollywood films, like IMAX, so deploying an IMAX in our Tier-II or Tier-III market doesn't make sense because they don't consume Hollywood films that much. Within the premium screens, we've got 10-15 options, so it's not something which is very linear or one size fits all.

We keep scouting for new, better, more premium technologies from across the world. We deploy the technology in about 4-5 locations across the country to gauge consumer reaction. If they enjoy that experience and are willing to pay a little extra for it, we look at expanding to phase two.

How have recent collections been and what is driving their growth?

We've ended August on the highest footfalls ever, with PVR. We've done 1.89 crore footfalls in the month of August alone, with the total box office exceeding Rs 500 crore. ICE, specifically with big banner films, has done exceedingly well.

This business is all about momentum. If one film does well, and is able to get a certain audience out of their homes, the consumer is very keen to come and watch it the second time. It sort of really wets their appetite. I think we are riding a great momentum of consumers and backed by some great content.

We can carry this momentum into the festive season in the third quarter. Some large films are slated for release then.

What are your plans going forward for Karnataka and the rest of South India?

There are a couple of properties which should open in Bengaluru soon. South sort of delivers a very good, healthy EBITDA to us and contributes about 42 per cent of our total footfalls. This year, we have one huge project coming up - Phoenix Market City, Bengaluru - with about 14 screens, which is one 4DX, one ScreenX, three Insignias and nine mainstream podiums.

There are a couple of projects coming up in Hyderabad, one in Coimbatore and one in Machilipatnam, Andhra Pradesh. And from Tier-I to Tier-II markets, we would want to get to every nook and corner of this country, provided we get a great location and a great model developer.