Business News. India’s largest multiplex chain, PVR, raised ticket prices by up to 23% on account of inflation, cost of labour and redevelopment costs, helping the company post its best ever quarterly revenues that crossed the Rs 1,000-crore threshold, CEO Gautam Dutta told media.
“Every year, we used to hike the prices by 5–7%, but we couldn’t do that in the last two and a half years. During this time, electricity costs, rent and maintenance charges have gone up, so we had to hike the prices,” said Dutta.
The CEO said he expected growth to continue even as footfalls at cinemas are yet to reach the pre-Covid levels.
The movie chain also expects to generate pre-pandemic level advertising revenues by Q3 FY23 as it plans to roll out new ways of audience engagement within theatres, Dutta said.
Revenue from advertising currently stands at 68% of the pre-pandemic level.
About 11% of the company’s revenue used to come from advertising, which dipped significantly during the pandemic, and PVR expects to reach that number by Q3 FY 2023.
It has introduced 270-degree on-screen experiential in-cinema advertising for the first time in India to drive higher excitement for brands.
“We are confident that this innovative method of advertising, which is ideal for product debuts, will help brands make a lasting impression on theatregoers’ emotions. PVR is really looking forward to collaborating with more brands and advertisers to revolutionise in-cinema advertising,” Dutta added.
After the pandemic, PVR has been trying hard to break the inertia of inaction on advertising and film promotions.
“We play close to about 16–18 minutes of advertising. Now, within that, there are certain brands which are saying, I really need to pop out, and I’ve got a big launch. So can you make it more impactful for me? So we did this exercise, and you will never imagine that the sidewalls of a cinema would also light up. It clearly means better engagement, better impact, and more recall for advertisers, and that’s exactly what we tried,” Dutta said.
As part of experiential advertising, the side walls, roof, and seats of the theatre can be used for advertising by extra projectors.
PVR has planned to open about 100-110 screens in 2022-23, which is more than the 80–90 screens on an average in the year before the pandemic. This fiscal year, the company intends to invest Rs 400 crore, a large portion of which will go toward redeveloping the existing theatre.
PVR reported losses of Rs 748 crore in FY21 and Rs 488 crore in FY22 as cinema operations were impacted due to restrictions imposed by various state governments to curb the spread of the Covid-19 pandemic in March 2020.
Footfalls at theatres are at 87% of the pre-Covid levels, and the company plans to enter seven new cities this year.