PVR INOX bets on FOCO model to expand footprint beyond metros

New Delhi: Cinema exhibitor PVR INOX is betting big on franchise owned company operated model to expand its presence beyond metros in India while also seeking to spread its affordable luxury offering, according to its CEO Pramod Arora.

The company is hoping that by developing cinema exhibition infrastructure in different parts of the country it would be able to provide economic benefits to local filmmakers and artists through box office receipts and sustain content creation, Arora told PTI.

Through the franchise owned company operated (FOCO) model, PVR INOX provides its expertise to oversee design, development, execution, and day-to-day operations of properties developed by investors who own the assets.

PVR INOX, which opened a 5-screen multiplex in Raipur last week, is banking on the FOCO model to accelerate expansion across the country, particularly scaling up premium cinema formats in high-potential Tier II and Tier III cities.

"The beginning of FOCO actually happened with Gwalior which opened last year and this one (in Raipur) which is opening in the beginning of this (fiscal) year. Now we are going to go ballistic on this...," Arora said.

He said the company needed to completely understand and set up the right SOPs and has been working for the last three-and-half years to perfect the model, which has enabled to reduce the time for execution by 50 per cent.

"It has now been completed and the rollout will be swifter and smoother...," he said, adding "whether it is tier I, tier II or tier III the franchise owned company operated and asset light models are relevant for all these cities".

In its third quarter earnings, PVR INOX had stated that it had signed 100 screens across 22 cinemas with 31 screens, 8 cinemas in FOCO, and 69 screens, 14 cinemas in asset light mode.

Arora said the upcoming planned screens will be on the affordable luxury concept to cater to the rising demand from customers for experiential cinema.

"Whenever guests are spending their discretionary money they are looking forward to a component of luxury. Affordable luxury as a concept does not mean that it is going to be expensive. Prices are defined by market dynamics," he said.

What is important is giving 'experiential cinema' which gets qualified as affordable luxury today in the Indian context. It is like a bridge to experience not a bridge to luxury, Arora noted.

Stating that more parts of India will be covered, he cited the example of North East India which "while being a part of larger Bharat, they have missed out on the entertainment opportunity".

PVR INOX will be coming up with screens in Shillong, Gangtok and Siliguri on a similar model.

On the need to develop cinema exhibition infrastructure across India, Arora said 92 per cent of the industry is dependent on national, regional, local and hyperlocal content while only 8 per cent of content in terms of box office value is imported.

"This content needs to have a better showcasing. There will be economic benefit to local filmmakers and artists only when there is cinema infrastructure around it...Cinema is the only format wherein you are able to get the box office which gets shared with the production houses by virtue of which more films can be made," Arora asserted.