The last three years have hammered home the fact that the cinema industry is a global one, with shutdowns, delays, or recoveries in one market impacting the theatrical slate for the rest of the world. In the spirit of cross-cultural knowledge and understanding, and to explore some of these issues more closely, CinemaCon once again kicks off with International Day—with Ajay Bijli, managing director of Indian circuit PVR Inox Limited and founder of PVR Cinemas, delivering one of this year’s two international keynote addresses.
The timing is fitting, coming after a year in which Indian cinema has broken records in international markets—and with an Indian film, RRR, receiving the country’s first-ever Oscar roughly a month before CinemaCon begins. Though still recovering from the pandemic, PVR Cinemas is in some ways stronger than when the pandemic started, having merged with its biggest competitor—Inox Leisure Limited—in April 2022 to become by far the country’s biggest cinema chain. Below, Bilji and Kamal Gianchandani, CEO of PVR Pictures Limited and chief, business planning and strategy, PVR Limited, speak to Boxoffice Pro about the dynamic and exciting Indian cinema market.
Can you give me some background information on PVR Cinemas and the Indian market in general? What has the pandemic recovery been like?
Ajay Bijli: I’ve been in the business 33 years now. I used to run a single-screen cinema, called Priya Cinema, way back in 1989, 1990. Then, for the longest time, I ran single screens, because in India you did not have multiplexes. Then I did a [joint venture] with Village Roadshow of Australia. We were expanding in various parts of the world, and we formed a company called Priya Village Roadshow Limited way back in 1994. And in ’97, we opened our first multiplex, which was a conversion of a single-screen cinema into a fourplex.
Since then, we’ve been growing the company. I’ve been very passionate about this business for the longest time. I’ve also been very passionate about the Indian market as such, because the Indian market is very unique. It’s never expanded out of India. There’s been no temptation to do that, because India was always grossly underscreened. You still had a single-screen culture. Multiplexes were still something very new. Shopping centers were coming up, malls were coming up. Single screens were getting converted into fourplexes, three-plexes. We believed that was the way to expand our footprint.
About 1,500 films, on average, [are released] in India in different languages, including English. About 1.3 to 1.4 billion tickets get sold [per year], at a very low price point. It’s always been a very volume-driven country. Both on the supply side—there’s a lot of quantity and variety of movies—and on the side of demand. Lots of people visit the cinema; it continues to remain the number one form of out-of-home entertainment in India. That makes the market very unique.
[The Indian market’s] dependency on Hollywood is not that [strong]. Of course, when Hollywood movies do well, they do exceedingly well. They get dubbed in various languages. But, by and large, 90 percent of the box office is still Indian films. Pre-pandemic, at least, that is what the numbers were. And even now, post-pandemic, [films skew heavily local], with the number of Hollywood films that are coming [to India] theatrically having been reduced. Still, India did not get impacted so much, because we still had a huge flow of domestic movies coming into the cinemas.
[PVR Limited’s] own journey, from ’97 to now has been that we’ve grown organically through shopping centers, malls—leasing spaces there. We’ve also grown inorganically. We acquired three very large chains, [which] took our screen count to 800, 900 screens. And then we realized that our balance sheets would get very badly battered by 18 months of [pandemic] closure. We decided that the only way to make the company stronger would be to merge with the number two player. We were number one. But then we realized that, since this business is about scale, we needed to mitigate our risk—from streaming services, from all sorts of consumer behavior changes that Covid partly resulted in. I would not say that the customer behavior has changed fully. India is a land of contradictions. You’ve got some older audiences that are still taking some time to come [back to the cinemas]—and they do come, but not in the same frequency as before Covid. The youngsters are coming back in throngs. We still felt that it was important to get the circuit much stronger. Our screen count has gone up to 1,700-odd screens, and our balance sheets have become much stronger. The company has now been rechristened as PVR Inox Limited. We have a task ahead now, to navigate through the post-pandemic period and take the company to greater heights.
I continue to remain very sanguine about the business. I’m still very positive. It’s only been 11 months, 12 months maximum, since we’ve been open after Covid. When people start comparing pre-pandemic to post-pandemic—you’re [comparing] 100 years of cinema to a post-Covid period of only 12 months. I find it an apple-to-pineapple comparison. I think we need to give cinema much more time before we start drawing any conclusions that streaming services or OTT platforms are going to take over, because this is something that will coexist. Home theater has always coexisted. Of course, the [imbalance] has gotten accentuated simply because that’s all people were doing when they were at home for 18 months. But if you give it a little more time—maybe another 12 months, or maximum 24 months—cinema is going to bounce back. Everybody seems to be in a bit of flux right now. It’s not as if even the streaming services have gotten their act together. They’re putting a lot of money into content creation, but not everything moves the needle on the subscription base. Bob Iger coming back and announcing Disney again doing theatrical—lots of things have happened worldwide.
In India, the same things are happening. The big stars—not just for romantic reasons or egoistic reasons—love the big screen, and they’re coming back. Some of the results have been staggering. Another level altogether. The movies that have done well, post-pandemic, have done numbers [that have never been seen] pre-pandemic. If you look at movies like K.G.F: Chapter 2, RRR, Avatar 2, and now a recent film called Pathaan—in their own genres and languages, these are the highest-grossing movies of all time. The peaks are very, very high. Of course, there are valleys as well. But the peaks are so high that they’ve never been seen before, even pre-pandemic.
And you have Indian films making more money outside India than ever before, too. RRR and Pathaan were huge successes in the United States. I saw them both in packed auditoriums. U.S. distributors have the screens to program these films, and new audiences are being exposed to Indian cinema and finding out that they like it.
Ajay Bijli: Which is very good, because if you look at India—there’s something called regional cinema. India is such a large country, and you have languages like Tamil, Malayalam, Kannada, and Telugu. And then you have Bollywood, which is the Hindi film industry. But then, suddenly, the filmmakers are now looking at India as one country. They’re not saying, “We’re making movies only for our region.” Therefore, when they resonate and when they do well, they do well everywhere.
Even some Indian filmmakers like [Pathaan star] Shah Rukh Khan, one of our most famous actors who now has the accolade of having the biggest Hindi film ever—he’s making a movie releasing in June called Jawan, by a talented regional director, Atlee, and then of course it has regional South Indian actors. He’s again making a movie that will not resonate just with North India, or West or East. He’s making a movie that will resonate with the whole country. And these movies are also resonating globally, which is very good. This is good news for exhibitors, because they don’t have to depend only on content from their stables. Even international content can play across various continents. That’s all we’re looking for: consistency of content that resonates with everybody. Our business is a momentum business, and 12 months is too short a period to come to any conclusions [about whether] the momentum is back. It is going to come back—no question about it.
PVR opened its first multiplex in 1997, which isn’t all that long ago. Is India still severely underscreened? What potential exists for expansion in the market?
Kamal Gianchandani: We have a total of about 10,000 screens—give or take 500. Out of which about 3,500 are multiplex screens, and the balance, 6,500, are traditional single screens. As to your question on the headroom to grow: At minimum the multiplex screens can go up to 10,000. From 1997 to 2023, we built about 3,750 screens. I think we can get to 10,000 over the next five to seven years, looking at the kind of growth opportunities which are being offered in the market. Definitely 10,000, but maybe over twelve and a half, 15,000.
It sounds like a very dynamic business to be working in right now.
Ajay Bijli: One leg of our business is, of course, joined at the hip with the film industry, and one leg of our business is joined at the hip with the retail industry and shopping center developments. India is also going through that phase where organized retail is replacing mom-and-pop retail. All cities in India now have shopping centers and malls coming up. And because cinemas are such an important part of any shopping center or mall, whoever is making a mall always puts in four to six screens, minimum, depending on which part of the market you’re in. That growth is what is giving us momentum as well.
As we speak, between PVR and Inox, we’re adding close to 150 to 200 screens every year. Sometimes markets do question us: “Where is the logic? Because your current screens are [still not back at] optimum level.” My answer to them is, “Because we are not a short-term player.” I’m not going to make a long-term decision based on 12 months. I’m going to make a long-term decision based on the history of the exhibition business in India and the future that it holds in every small- and medium-size town and metro.
In places where we are going, these cities and these catchments, the consumer still hasn’t seen organized multiplexes. They haven’t seen stadium seating or Dolby digital laser projection. The whole “wow” factor of cinemas. And our cinemas are very, very high on design, because Indian movies are colorful. Indian movies are vibrant. The whole philosophy of PVR has been to not make cinemas that are dull. They’re not utilitarian cinemas. They’re very exciting cinemas, because it’s an event for people to go out and watch movies in India. They dress up when they go. I was in one of my cinemas today. At three in the afternoon, I saw couples sitting and watching Scream 6. Then I went into another auditorium, they’re watching 65. I went to another auditorium, and they’re watching a Hindi movie. It was running at about 40 percent capacity at one in the afternoon, and they were all dressed up and enjoying a Friday. I was so happy. I said, “You can’t get this at home.” It’s a celebration here. If we make the cinemas colorful and exciting, give [patrons] big-screen projection systems, sound systems, they’ll say, “This I can’t get at home.” And that’s what we’re banking on.
What’s the role of premium formats in the Indian market?
Ajay Bijli: Indians are very, very particular about the moviegoing experience. My daughter was in Bombay when Avatar: The Way of Water came out, and she saw it in all formats. She saw it in 3D, in Imax, and she saw it in a new format called ICE [which integrates side panels in a theater to create a more immersive experience.] Today, in fact, I went to one of the cinemas where they were showing Ant-Man and the Wasp: Quantumania in its third or fourth week on ICE, and it was busy. It was 40 percent occupied. 4DX is there. [Premium formats] enhance [the cinema experience]. They make it more experiential. That’s what cinema is all about. India’s like any other country, where if a big movie is opening—a Mission: Impossible, a Fast and Furious, Shazam, John Wick—people will pay that premium if it’s playing on a big format.
As you mentioned, the Indian markets—like every other market—isn’t completely recovered from the pandemic. It’s an unreasonable expectation in so short a time. Given that, what are some of the initiatives you’ve had success with in bringing people back to PVR cinemas, in terms of marketing efforts, but also things like diversified programming to appeal to different audience sectors?
Ajay Bijli: Diversity of content has definitely played an important role [in the recovery]. As I said, people have gotten the taste of watching regional content as well. We’ve [also] been very careful about our pricing. Even though in two years of a shutdown inflation was very high—7 percent inflation in India— we still stuck to a not-more-than 5 percent increase annually [in ticket pricing].
[We’ve also done] a lot of segmented marketing for the slightly mature audiences. We’ve done a lot of festivals; we brought certain [older] movies back. We also did Cinema Day, which was done worldwide, to get people in. All marketing aside, the most important thing is still the stickiness of the content with the consumer. Ultimately, once the content connects with the consumer, then that’s it. That’s when they throng back.
Kamal Gianchandani: Apart from the regional languages, which became a big force, we always spoke about crossover in the realm of Indian specialty films crossing over to the global audience. But with regional films, the crossover took place [between] local markets—like, for a Tamil film, from [its home] market to the rest of the country. The definition of crossover films has changed.
Also, what you touched upon earlier: our ability to market our core content, whether you call it “Bollywood,” or “Indian films” with song and dance. Our ability to market and be successful in international markets with our core content also became a big success. Producers have been able to garner a lot of success, be it with RRR or Pathaan, in the overseas markets. That is also contributing heavily to the bottom line.
[We’ve also focused on] diversity of content in terms of event cinema, cultural programming, sports, musical concerts—not at the cost of feature films, but as incidental programming that also has been quite successful. [Another part of our recovery is] the persuasion we managed to do in terms of pushing content creators to release films in a much more consistent fashion. We reduced the window from eight weeks to four weeks. India’s pretty much the only market which did not do any day-and-date releases on streaming and theatrical. All these factors, put together with the factors that Mr. Bijli spoke about, have been the highlights for the exhibition sector in terms of bounce-back.
[The windows] have gone back to eight weeks. During Covid, we reduced the window to four weeks. But India was the only market that had a window between theatrical and streaming all along, versus the U.S. and many other markets, which had day-and-date releases of films in theaters as well as streaming platforms. That never happened in India.
That’s the dream for exhibitors in the U.S. I would imagine the Hollywood studios took some convincing there.
Kamal Gianchandani: I would say, by and large, Hollywood studios have been extremely supportive, and they’ve looked at this whole matter through a local lens. There was a bit of give-and-take involved, but eventually it all worked out well.
What are the international films that you’re most looking forward to in 2023 in terms of attracting Indian audiences?
Kamal Gianchandani: As far as Hollywood films are concerned, it’s the usual slate of event films that most of the exhibitors across the world are looking forward to. Fast X, Mission: Impossible, Oppenheimer, Guardians of the Galaxy Vol. 3, Aquaman and the Lost Kingdom, Indiana Jones and the Dial of Destiny—these are some of the films which are likely to do well in this current year.