To treble screen count, build 6 ‘entertainment cities’ over 3 years through mix of debt and own funds.
With an eye to grow as a complete retail entertainment provider, theatre chain operator PVR Cinemas plans to invest around Rs 580 crore to set up six entertainment cities and add 350 screens to its existing 154 across the country over the next three years.
The first of the entertainment cities will come up in Noida. The project will house a state-of-the-art, 15-screen multiplex, with four gold class theatres, a 24-28 lane bowling alley, an Olympic size ice skating rink, food courts, casual dining restaurants and a microbrewery, based beer island.
| PVR LIMITED |
| 351.99 Revenues |
| 360.02Total Income |
| 16.34 Net Profit |
| 154 screens (as of Sep 2011) |
“We have a target of operating 500 screens by the end of 2014. Of this, around 100 screens would be set up in smaller towns and cities and would run on a low-cost model under PVR Talkies,” said Sanjeev Bijli, joint managing director, PVR Cinemas.
It has lined up an investment of Rs 300 crore for the screen expansion programme, which would be funded through a mix of internal accruals and debt. At present, PVR Cinemas has 154 screens across 35 properties. “We have low-cost screens running on a pilot at three locations. There is considerable demand for theatres in tier II and tier III cities, but the pricing of tickets has to be on the lower side in such places. We have done value engineering to reduce the cost per screen. Our model has been quite successful.”
Industry observers said, though the number of multiplex screens stands at around 1,000, nearly 75 per cent of domestic theatrical revenues for a Bollywood movie filters in from these theatres. The remaining comes from single-screen theatres. There are 12,800 single screen theatres in India. Rakesh Jariwala, partner and segment champion, film entertainment, Ernst & Young, said: “The cost of assembling components and operating a single screen theatre is unsustainable. Companies are increasingly investing in multiplexes, where revenues also come from add-on services such as food courts and bowling alleys. The number of multiplexes is expected to double over the next five years.” There were 408 multiplex screens in India in 2007.
According to a Ficci-KPMG report on the media and entertainment industry for 2011, screen density in India is at 12 per million people. With the film exhibition business expected to grow at 12 per cent year-on-year, companies are looking aggressively to expand their share in this space. Reliance Big Cinemas and Inox Leisure have, for one, been locked in a tussle for over a year to acquire a majority stake in Fame India. Fame has 97 screens and the consolidation would give Big Cinemas and Inox to grow exponentially.
| SHOW TIME | |||
| Company | No. of Screens | Financials FY11 | |
| RELIANCEMEDIAWORKS (which owns Big Cinemas) | 260 | Revenues | 524.90 |
| Total Income | 542.87 | ||
| Net Profit | -256.21 | ||
| FAME INDIA | 97 | Revenues | 160.25 |
| Total Income | 161.23 | ||
| Net Profit | 1.99 | ||
| INOX LEISURE | 144 | Revenues | 337.32 |
| Total Income | 342.37 | ||
| Net Profit | 6.96 | ||
| CINEMAX INDIA | 114 | Revenues | 153.83 |
| Total Income | 159.53 | ||
| Net Profit | -1.54 | ||
| * To set up six entertainment cities and 350 screens over the next three years | |||
| * To invest around Rs 580 crore | |||
| * Entertainment cities at Noida, Bangalore, Hyderabad, Chandigarh, Pune and the NCR | |||
| * Of the 350 screens, around 100 would be operated on a low-cost model under PVR Talkies banner | |||
| * PVR BluO to come up at eight new locations across Bangalore, Pune, Mumbai, Chandigarh and Ludhiana by the end of the financial year | |||
| Source for financial figures : BSE website; All figures are in ' crore Source for number of screens : PWC India Entertainment and Media Outlook 2011 (except for PVR all numbers are for 2010) | |||
To realise its aspiration as a complete retail entertainment services provider, PVR has decided to invest huge sums to set up entertainment cities and expand its bowling alley arm PVR BluO.
The firm, which has two BluO units in Delhi and Gurgaon, has firmed up plans to start outlets in Bangalore, Pune, Mumbai, Chandigarh and Ludhiana by the end of FY12. “Overall, eight such facilities would be set up this year in association with our joint venture partner,” said Bijli. PVR Bluo is 51:49 joint-venture between PVR and Major Group of Thailand. Together, the firms will invest around Rs 75 crore. Also on the cards are six entertainment cities in Bangalore, Hyderabad, Chandigarh, Pune and the NCR.
PVR has earmarked Rs 280 crore to set up the complexes. PVR's revenues stood at Rs 104.49 crore for the quarter ended June 2011.
