How PVR Is Gearing Up For 8-12 ‘Very Tough’ Weeks Once Theatres Reopen

The multiplex chain, with the largest number of screens across India, expects the first month after reopening to be dedicated to bringing back viewers despite the fear of public places, Chief Executive Officer Gautam Dutta said during an interview with BloombergQuint’s Menaka Doshi. "We have to create our consumers as evangelists who will not only come and watch this cinema but also go out and talk about what they have seen and experienced.”

Here are the key highlights of PVR’s strategy:

• Based on state government permissions, PVR will reopen 400-odd screens of the total 845 it controls. Of these, 60-70% will be reopened on Oct. 15 while the remaining will be opened up in two more phases by Nov. 15.
• PVR has kept two teams on standby in every city to ensure smooth operations and safety from Covid-19. “In case there is any issue with our employees, the entire team gets pulled off and a new one replaces it,” Dutta said.
• Other situations such as local lockdowns, rising cases or implementation of containment zones have been thought of.

Content To Determine Pricing

Alongside cinema halls, the movie business suffered a near-total shutdown, leading to delays in film production and completion. A few international films such as ‘Tenet' and ‘Mulan' will help PVR draw audiences. The rest of the content strategy rides on re-upping old classics at cheaper ticket prices, to help counter the hit on viewer incomes.

• In phase one of reopening screens, Dutta plans to attract footfalls by hosting film festivals of older movies—possibly in remembrance of late actors Rishi Kapoor or Irrfan Khan.
• Tickets to these festivals may be sold at a cheaper price since the content is old.
• Meanwhile, the company is collaborating with its content partners to secure new releases such as ‘Laxmmi Bomb’, ‘ Sooryavanshi’, ‘83’ in addition to regional movies from West Bengal and Punjab. New content will be positioned at pre-covid pricing.
• PVR will introduce offers, incentives and weekly passes to its corporate clients and its 1.1 crore privilege card members, he said.

Tight Ship

While making virtually no revenue in the April-June quarter, PVR was able to keep costs low on account of no rent payments, layoffs and salary cuts. Actual expenses dropped to Rs 32 crore versus Rs 150 crore in Q1 FY20, according to the company’s financial statement. Dutta said cost control has sustained in the second quarter as well.

• PVR incurred zero rent cost in Q1 and Q2 and is now working with developer partners to keep costs low as it reopens in Q3 and gains momentum in Q4.
• 50% of developer partners have agreed to our proposals (on rent) and the company is negotiating with others.
• Managerial employees will continue on a lower salary for a while longer.
• Have met estimated cost run-rate between Rs 22-25 crore month in Q2 versus Rs 32 crore in Q1.
• Targeting the Ebitda margin of 18-18.5% on average in the second half of the financial year.

As of Q1, the company had a gross debt of Rs 1,267 crore and claimed sufficient liquidity of Rs 550 crore, including funds raised via a rights issue and undrawn bank lines. Dutta did not confirm whether a loan restructuring may be on the anvil but said the finance team was looking at the best available options.

Watch | CEO Gautam Dutta On PVR's strategy After Multiplexes Reopen