View source for PVR (Priya Village Roadshow) group

==Eye on Profitability==
Renuka Ramnath, who has invested twice in PVR (first in her capacity as head of ICICI Venture and as CEO of Multiples Alternate Asset Management, a private equity firm that owns 15.2% in PVR), said in her line of business, the proof of the pudding is whether investments are successful or not. "Financially, it has been a tremendously rewarding journey in both investments in PVR." Ramnath said the few cornerstones on which Bijli was building the were obvious. "He was putting a lot of attention on building a brand that transported consumers to a make-believe world."

PVR has decked the path to that world with top-of-theline technology, plush interiors, great ambience, comfortable chairs and good service. At least 50 properties of the chain are located in prime locations, where the company has invested in interiors that resemble a five-star hotel as well as cutting- edge formats such as ECX and Imax. 

Each cinema is designed different. Typically, PVR revamps a property after five years, driven by a 10-member team that hires a mix of Indian and foreign architects.

But wouldn't these investments be lost on an audience that loves to watch Humshakals rather than Edge of Tomorrow? Sanjeev Kumar, joint MD of PVR, said it's a given that multiplexes have to offer excellent customer experience. "No chain can be agnostic to that. If the AC is not working, seats are dirty, sound system is compromised, a customer will not go back. That's what keeps us on our toes."

That calls for running a round-the-clock operation. Multiplex as a business doesn't sleep, according to Arpan Dutta, chief customer officer, PVR. When the last customer exits — usually at 1 am — a housekeeping team starts cleaning. When their work is over, an operations team — which works in shifts — takes over. Preparations to sell tickets and food and beverages (F&B) begin an hour before a show starts.

Once the first ticket is sold, the cinema manager's key task — how to maximise revenue — begins. The bywords are strike rate and 'upselling'. The first relates to selling food and drinks to all the people queuing up before stalls and the second to selling extra goodies — a person who comes to buy salted popcorn, is coaxed to also part with a soft drink.

Box office collections are still the mainstay of PVR's operations, but in recent years, the F&B business has become a money-spinner. "In F&B, there was a perception, probably rightly so, that cinema food was not good. We have worked to change that," said Bijli.

The man driving that change is Gautam Dutta, chief operating officer of PVR Cinemas. He hired a corporate chef to prepare food and a five-star hotel veteran to oversee services. The PVR menu today would give a restaurant a run for its money. The results are showing. The spend per head — a measure of F&B revenues — long tapered around 20-25%, or Rs 45, of the average ticket price (ATP) of Rs 175. It has since risen to 35%, or  Rs 62, according to Dutta.

Dutta is a marketing veteran, but selling movies is primarily the prerogative of producers and distributors. (PVR's marketing budget is less than Rs 20 crore, peanuts for a Rs 1,350-crore group). That has allowed him to devote time to other aspects of the business. Besides the F&B drive, another brainchild of Dutta has been the Super Saver. On Wednesday in the west and Thursday in the north, PVR sells tickets at a discount of Rs 75-125, to woo fans who find prices daunting or are not keen to catch a particular movie.

The surge in footfalls on a Super Saver day makes up for the rest of the days, even the weekends. It is still a cautious pricing strategy — a multiplex wouldn't want to wean away its affluent weekend customers with steep discounts.

PVR executives said they are acutely aware that customers reject high prices. Still, ticket prices have been growing at 4-5% a year. Many squirm at the steep ticket and food prices.

Nitin Sood, chief financial officer, PVR, doesn't quite agree. " We test prices to check what customers are willing to pay (based on a cinema manager's advice)." Sood argued that the bulk of the cinemas — PVR Cinemas with 340 screens — is targeted at the masses. And multiplexes cannot charge lesser than single screen cinemas.

Reducing prices is nevertheless the last resort, according to Arpan Dutta. People will not watch for free a bad movie.  The alternative is to reduce the shows of a dud, inject fresh movies and rework the schedules 

This is the task of the programming team, which is also overseen by Gautam Dutta. The team receives a forecast of movies from producers. It also helps that multiplexes offer customers the flexibility to offer different movie timings — a gap of usually five minutes between shows and up to five shows a day at one auditorium — but exhibitors must understand consumer behaviour. The right time slots can draw crowds, the wrong ones will push them to a competitor.

If PVR appears to be running a well-oiled machine, it boils down to Bijli's mantra of running one business efficiently. He is clearly not a big fan of diversification. He said he would rather absorb something really intrinsic to his business.

PVR Pictures, which distributes Hindi and English movies, and PVR Rare, which offers a platform for Indian indie flicks, bear the stamp of this motif. The first unit is the largest distributor of English movies in India. The second makes five times its budget. Shiladitya Bora, head, PVR Rare, said he releases these movies and documentaries not only in PVR screens but also on other platforms such as Netflix and iTunes. 

The bottom line is profitability. PVR has opened two restaurants to complement its multiplexes. Likewise, customers exiting a PVR cinema cannot miss outlets of PVR bluO, a bowling alley venture with Major Cineplex.

Bijli is loath to diversification, but he said in every entrepreneur's journey, there tends to be a distraction. The distraction in his case happened to be film production. It remains the only blot in an otherwise spotless journey.

PVR Pictures actually had a great start in production. The first two films — Taare Zameen Par and Jaane Tu Ya Jaane Na — were big hits. But a series of bombs followed, the biggest being Khelenge Hum Jee Jaan Se. PVR exited on a high, though. Its last film Shanghai was a moderate hit and received critical acclaim.