 "<b>Lunch with BS:</b> Ajay Bijli")
Ajay Bijli is messaging when I walk into Mistral. The newly opened restaurant at Director's Cut, a luxury cinema hall from PVR, in Delhi is almost empty. It is late afternoon on a weekday and Bijli, 46, has just landed from Mumbai. He has been flying in and out of the city a lot since PVR acquired Cinemax, a Mumbai-based cinema chain, last year. The acquisition makes PVR the single-largest multiplex firm in the country with 351 screens and an estimated Rs 1,060 crore in top line in March. But what Bijli is obsessing about is whether the Cinemax "brand experience" matches PVR. This includes everything - from the time a show starts to the taste of the popcorn and the state of the toilets, among scores of other things.
"The worst thing that can happen in this business is that we get commoditised. I don't want PVR to be just a conduit between film-makers and film-goers," says Bijli. Branding is the way to bust the commoditisation monster. Little wonder, then, that Bijli is obsessed with brands, writes Vanita Kohli-Khandekar.
My tea and Bijli's coffee arrive while he explains his belief in the "one-brand philosophy". He is fascinated by McDonald's, Starbucks or even the desi Cafe Coffee Day, and how they ensure that the brand experience is the same in every city and country that they enter. A lot of it is simply putting processes in place for everything - from the colour of the tiles to the way the burgers are served. "A brand is the sum total of lots and lots of things," he says.
Bijli has missed lunch and is hungry. He wonders when his chicken salad will arrive. And he exhorts me to try the pizza. "We paid an arm and a leg for the oven," he adds. I guess, rightly, that it is a wood-fired oven. They make the best pizzas.
This is exactly the sort of stuff that Bijli worries about. "I panic if I am not involved in the design of a new property," he says. A lot of the things that are now standard PVR features have been born out of this need to stand out, standardise and make a brand out of the simple activity of getting into a theatre to watch a film. "If you want to watch a film, your first choice has to be PVR, and if there isn't one in your vicinity, you should think 'I wish it was a PVR'."
That is not what this business was about in the seventies when a young Bijli used to hang around at the one theatre his father owned - Priya in Delhi. In the seventies and the eighties, you walked into a film theatre only if you really wanted to see the film, knowing that the loos would be filthy, the samosas stale and the seats torn. The film industry then was about creating one-size-fits-all films that could fill cavernous 1,000-seaters - such as Priya. Just about half the money that films made at the box-office came back. The rest leaked out as undeclared cash.
Then, in 1998, films got industry status. In 2001, the Maharashtra government announced a five-year tax holiday for multiplexes and soon the boom began. Between 1998 and 2012, the film industry grew over eight times in revenue. Average ticket prices across the country have more than doubled, margins are more predictable and, more importantly, the Indian film business is clean as a whistle. A large part of the credit for this goes to multiplexes, such as PVR, Inox and Fame, which brought transparency and a better experience at higher ticket prices.
But the fact remains that India is one of the most under-screened countries in the world, and the film business one of the most unprofitable. There are about 10,000 screens for a 1.2 billion Indians against 39,600 for 313 million Americans. If India had even 20,000 screens, the film industry could easily double in size. Bijli accepts the scale argument, but argues against quantity without the right quality. He points out that the focus on quality is what has helped PVR average Rs 170 for every ticket sold in 2012-13. That is 10 to 15 per cent more than its rivals. It already sells more tickets than any other chain, but a higher average ticket price gives it the ability to generate enough cash to fund acquisitions and keep investing in more screens - which, in turn, builds scale.
"Once you differentiate on the qualitative things, the quantitative will follow," he reckons.
PVR, for instance, has screens across 37 cities as diverse as Mumbai, Bangalore, Ujjain and Bilaspur. "How do I make certain that a nine a.m. show in Ujjain begins at nine a.m.? Or that the loos are clean? Maintaining consistent quality is the challenge when the company is geographically spread," says Bijli, starting off on what is clearly a pet theme.
Why is he so fascinated by the whole differentiation and branding game? Because, Bijli says, figuring out where to open the next screen, at what cost, and so on, is now down to a science for PVR for over 18 years. But the quality part cannot be templatised as easily.
The pizza is good and Bijli is looking more relaxed as he eats his salad. So I move to films, the fodder for his theatres. If there aren't enough good films coming in, then a multiplex chain cannot make money - because only if people come to watch films will they buy the popcorn and the nachos, and advertisers will want to reach them. Bijli reckons that the film business is getting its act together. But the industry is still chasing a few stars.
Why is that? A large chunk of the Hindi film industry is now controlled by half-a-dozen studios, such as Eros, UTV and so on, with the muscle to market and distribute unknowns. Their hit rate with sleepers, such as Vicky Donor or Kai Po Che!, is going up. Why, then, is the industry still so star-dependent? Because stars represent a low-risk strategy, says Bijli. The lowest-risk decision is based on past performance and on that count, statistically, stars do well.
Isn't that an area of vertical integration where he could have changed things. Why did PVR give up on film production? "We didn't do too well and, ultimately, there is only so much bandwidth. It made more sense to put the money into our core business," he says, giving me the "corporate" answer. After a moment, he adds, "Our emotional quotient is high; when the movies didn't do too well, we were devastated." Taare Zameen Par and Jaane Tu... ya jaane na were gems, but, largely, PVR Pictures has been about indifferent films, such as Aisha and Teen Thay Bhai.
Diversification and what PVR could be doing is a topic to which we keep coming back. What is missing in the PVR portfolio? Bijli says he wants time to think about the answer to that one. A few days later we speak on the phone, because he has finally figured out what he wants to say. His answer: "As an entrepreneur, I feel that the brand has to make a larger impact. It [PVR] has the potential to do more rather than being restricted to a vertical. It could be within what we are doing or we could use the diversified route. I don't know where PVR's journey will take it."
Que sera sera.
"The worst thing that can happen in this business is that we get commoditised. I don't want PVR to be just a conduit between film-makers and film-goers," says Bijli. Branding is the way to bust the commoditisation monster. Little wonder, then, that Bijli is obsessed with brands, writes Vanita Kohli-Khandekar.
My tea and Bijli's coffee arrive while he explains his belief in the "one-brand philosophy". He is fascinated by McDonald's, Starbucks or even the desi Cafe Coffee Day, and how they ensure that the brand experience is the same in every city and country that they enter. A lot of it is simply putting processes in place for everything - from the colour of the tiles to the way the burgers are served. "A brand is the sum total of lots and lots of things," he says.
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These things could be picked up from anywhere. "I am very inspired by Rahul Bhatia's IndiGo Airlines and its on-time performance. Look at the kind of conditions they face - from the weather to congestion - and yet the flights land on time. So why can't we do the same in cinema [by starting and ending films on time]? We could be picking stuff up from Oberoi's on quality or McDonald's on hygiene in fast food," he adds. (Disclosure: Vikram Bakshi, CEO, McDonald's India, North and East, is on the board of PVR.)
Bijli has missed lunch and is hungry. He wonders when his chicken salad will arrive. And he exhorts me to try the pizza. "We paid an arm and a leg for the oven," he adds. I guess, rightly, that it is a wood-fired oven. They make the best pizzas.
This is exactly the sort of stuff that Bijli worries about. "I panic if I am not involved in the design of a new property," he says. A lot of the things that are now standard PVR features have been born out of this need to stand out, standardise and make a brand out of the simple activity of getting into a theatre to watch a film. "If you want to watch a film, your first choice has to be PVR, and if there isn't one in your vicinity, you should think 'I wish it was a PVR'."
That is not what this business was about in the seventies when a young Bijli used to hang around at the one theatre his father owned - Priya in Delhi. In the seventies and the eighties, you walked into a film theatre only if you really wanted to see the film, knowing that the loos would be filthy, the samosas stale and the seats torn. The film industry then was about creating one-size-fits-all films that could fill cavernous 1,000-seaters - such as Priya. Just about half the money that films made at the box-office came back. The rest leaked out as undeclared cash.
Then, in 1998, films got industry status. In 2001, the Maharashtra government announced a five-year tax holiday for multiplexes and soon the boom began. Between 1998 and 2012, the film industry grew over eight times in revenue. Average ticket prices across the country have more than doubled, margins are more predictable and, more importantly, the Indian film business is clean as a whistle. A large part of the credit for this goes to multiplexes, such as PVR, Inox and Fame, which brought transparency and a better experience at higher ticket prices.
But the fact remains that India is one of the most under-screened countries in the world, and the film business one of the most unprofitable. There are about 10,000 screens for a 1.2 billion Indians against 39,600 for 313 million Americans. If India had even 20,000 screens, the film industry could easily double in size. Bijli accepts the scale argument, but argues against quantity without the right quality. He points out that the focus on quality is what has helped PVR average Rs 170 for every ticket sold in 2012-13. That is 10 to 15 per cent more than its rivals. It already sells more tickets than any other chain, but a higher average ticket price gives it the ability to generate enough cash to fund acquisitions and keep investing in more screens - which, in turn, builds scale.
"Once you differentiate on the qualitative things, the quantitative will follow," he reckons.
PVR, for instance, has screens across 37 cities as diverse as Mumbai, Bangalore, Ujjain and Bilaspur. "How do I make certain that a nine a.m. show in Ujjain begins at nine a.m.? Or that the loos are clean? Maintaining consistent quality is the challenge when the company is geographically spread," says Bijli, starting off on what is clearly a pet theme.
Why is he so fascinated by the whole differentiation and branding game? Because, Bijli says, figuring out where to open the next screen, at what cost, and so on, is now down to a science for PVR for over 18 years. But the quality part cannot be templatised as easily.
The pizza is good and Bijli is looking more relaxed as he eats his salad. So I move to films, the fodder for his theatres. If there aren't enough good films coming in, then a multiplex chain cannot make money - because only if people come to watch films will they buy the popcorn and the nachos, and advertisers will want to reach them. Bijli reckons that the film business is getting its act together. But the industry is still chasing a few stars.
Why is that? A large chunk of the Hindi film industry is now controlled by half-a-dozen studios, such as Eros, UTV and so on, with the muscle to market and distribute unknowns. Their hit rate with sleepers, such as Vicky Donor or Kai Po Che!, is going up. Why, then, is the industry still so star-dependent? Because stars represent a low-risk strategy, says Bijli. The lowest-risk decision is based on past performance and on that count, statistically, stars do well.
Isn't that an area of vertical integration where he could have changed things. Why did PVR give up on film production? "We didn't do too well and, ultimately, there is only so much bandwidth. It made more sense to put the money into our core business," he says, giving me the "corporate" answer. After a moment, he adds, "Our emotional quotient is high; when the movies didn't do too well, we were devastated." Taare Zameen Par and Jaane Tu... ya jaane na were gems, but, largely, PVR Pictures has been about indifferent films, such as Aisha and Teen Thay Bhai.
Diversification and what PVR could be doing is a topic to which we keep coming back. What is missing in the PVR portfolio? Bijli says he wants time to think about the answer to that one. A few days later we speak on the phone, because he has finally figured out what he wants to say. His answer: "As an entrepreneur, I feel that the brand has to make a larger impact. It [PVR] has the potential to do more rather than being restricted to a vertical. It could be within what we are doing or we could use the diversified route. I don't know where PVR's journey will take it."
Que sera sera.