The country’s largest movie exhibitor PVR INOX had a windfall last weekend. In the three days of August 11-13, its theatres welcomed around 3.3 million guests and earned gross box office revenue of Rs 100 crore-plus. The chain logged its highest ever — 1.2 million — admissions in a single day on August 13, earning gross box office revenue of around Rs 40 crore.
That’s great news when ticket prices are 15% higher than pre-Covid levels and retail inflation is at a 15-month high of 7.44% (July). “The recent successes show that audiences were ready to go back to the cinemas, they just needed an excuse and good content to do that,” says Gautam Dutta, co-CEO, PVR INOX.
“Cinema/multiplex occupancy moved up sharply towards 55%-60% that weekend against average weekend occupancy of 35%-40% in the post- Covid era,” says Karan Taurani, senior vice-president & research analyst (media, consumer discretionary & internet), Elara Securities.
PVR INOX Ltd — which has 1,708 screens across 361 properties in 115 cities — has put in a lot of efforts to get there. It has tweaked ticket prices with flash sales; it has cut down food and beverage prices with myriad offers and combos; and in April it launched a curated trailer-based 30-minute show for the big screen. It recently launched a new campaign, ‘Fresh Dekho, Bada Dekho’, bringing out the difference between out-of-home entertainment and home entertainment, urging audiences to visit theatres.
“If you watch and like a trailer of a movie, there’s a very high likelihood that you will come back and watch the film. The flash sale is a game to get more topicality within the youth segment,” Dutta says. In the case of F&B, the “delight offers” of `99 on weekdays and bottomless cola and popcorn during weekends along with attractively priced family meal combos could all translate into a 40% overall savings per visit to the theatre for the consumer.
The PVR stock has also been on an upswing for the past one month, rising nearly 20% on the back of successful recent releases such as Gadar 2, OMG 2, Jailer, Mission Impossible 7, Oppenheimer, Rocky Aur Rani Ki Prem Kahaani, and Satyaprem Ki Katha. Following its merger with Inox Leisure in May this year, the stock registered an 18% growth in the past three months.
So is the tide turning for PVR? More importantly, is the momentum sustainable?
Content is king
Much will depend on the upcoming releases, say observers.
There’s another issue the company has to contend with. Audience preferences have shifted since theatres started operating in full swing post the Covid restrictions. What seems to be working best now are VFX-driven films, and big-ticket franchise-and IP-based films, besides original stories (not remakes). Look at the big grossers in recent months — RRKPK had an original story, Gadar 2 and OMG 2 were franchise films and Pathaan was an original story + VFX-led.
Girish Upadhyay, CMO, Axis My India, agrees: Audiences like to watch bite-sized, untold stories on OTT and magnum opus movies like RRR, Pathaan, and RRKPK on bigger, cinema screens. “Hence there is need for a balanced marketing and content strategy ,” he adds.
There is another issue here. The number of Hindi films releasing in cinemas has dropped 22% in the post-Covid era to 14 films every quarter (FY23), from 18 every quarter (FY19). This, in turn, has increased dependence on large-budget Hindi films, which currently contribute about 82% of the box office revenues versus 44% in FY20. “These films doing well on a consistent basis will be key until we see the trend reverse to more small and medium budget films doing well,” says Taurani.
Dutta of PVR INOX believes footfall levels will hit the 2019 levels this year itself. What gives him confidence is the strong Hindi content lined up over the next few months —from Jawan (Shah Rukh Khan, September) , Ganapath Part 1 (Tiger Shroff, October), and Tiger 3 (Salman Khan, November) all the way up to Dunki and Animal (both slated for release in December) — meaning “original material” and “star power” is unlikely to be in short supply.