PVR Report

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Project Report of

PVR Group

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Table of Contents

Sr. no Topic Page no

1 Entertainment and Media Industry 1

2 Pest Analysis 3

3 Industry Competitors 4

4 PVR and Subsidiaries 5

5 Swot Analysis 15

6 Porter Five Forces 17

7 Marketing Mix 20

8 STPD Analysis 24

9 Promotions of PVR Cinemas 27

10 Financial Performance 28

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Entertainment and Media Industry

Indias Entertainment & Media sector to continue its double digit growth trajectory in 2011.The industry is expected to touch Rs 1199 billion growing cumulatively at 13.2% CAGR to

2015.

Indian E&M industry recorded one of the highest growth rates in the world growing at 11.2%

in 2010. This was largely due to rebound in consumer spend, advertising spend and most

importantly in the E&M spend. The industry grew a little slower than expected largely due to

the downturn in the film segment. All the other segments grew as predicted.

Outlook for major segments are as follows:

Television: The sector is projected to command half of the entertainment pie by 2015 as it is

estimated to grow at a 14.5% cumulatively over the next five years, from an estimated INR

306.5 billion in 2010 to INR 602.5 billion by 2015.

Film: The sector is projected to grow at a CAGR of 9.3% over the next five years, reaching

INR 136.5 billion in 2015 from the present INR 87.5 billion in 2010.

Print media: The sector is projected to grow by 9.6% over the period 2011-15, reaching INR

282 billion in 2015 from the present INR 178.7 billion in 2010.

Radio: The sector is projected to grow at a CAGR of 19.2% over 2011-15, reaching INR26.0 billion in 2015 from the present INR 10.8 billion in 2010.

Music: Due to the increase of the mobile VAS market, the sector is projected to grow at a

CAGR of 17.6% over 2011-15, reaching INR 21.4 billion in 2015 from INR 9.5 billion in

2010.

Internet advertising: With rebound in overall advertising, internet advertising too is

projected to grow by 25.5% over the next five years and reach an estimated INR 24.0 billion

in 2015 from the present INR 7.7 billion in 2010.

Out of home (OOH): The estimated size of Out of home (OOH) advertising spend is INR14.0 billion in 2010, which is projected to reach INR 24.0 billion in 2015.

Animation, gaming and VFX industry will continue to maintain its growth pace and is

projected to grow at a CAGR of 21.4% to INR 82.6 billion in 2015 from its current size of

INR 31.3 billion.

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PEST Analysis for PVR Cinemas

Economic Factors

Increase in disposable income in the hands of an ever expanding Indian middle class

Earning of revenue from sources other than only movies in the theatres.

Multiplexes are one of the anchor tenants in large format malls, as their presence increases

footfalls by approximately 40-50%. The expected organized retail boom should result in a

significant increase in the number of Multiplex Cinemas.

Social Factors

The movie experience goes much beyond just watching a film. The encouraging growth in thenumber of multiplexes is making the movie goers, especially in urban India, experience a new

way of enjoying movies.

Higher consumption spending and consequent changes in lifestyle are also spurring the

growth of the Indian Entertainment sector.

Multiplexes not only increased the number of available screens, but also provided them with

excellent acoustics and enhanced picture display.

Increase in Number of High Grade Hindi Films

Political Factors

Several state governments provided incentives to encourage the growth of multiplexes. A

positive concession given to the cinema theatre industry in 2002/03 was the deduction of 50

to 100% of the profit earned by multiplexes that came to them in the next two to five years.

To boost the sector, the government has opened large parts of the sector to foreign direct

investment (FDI). It allows 100 per cent FDI on automatic basis in the film industry with no

entry level pre-conditions.

Entertainment tax benefits

Technological factors

Film Distribution Holdups

One of the main features of the Indian film industry that differentiates it from those in western

countries is the limited initial release of films.

Pirated DVD/VCD copies of the film are generally available by the time the film is released

in B and C class centers, which reduces demand

If the film was not a hit on its initial release in the A-class centers it is unlikely to do well on

its delayed release

The quality of the celluloid film print is negatively affected each time it is played, so poor

picture quality is also an issue - often the dark and scratchy print is hardly visible on the

screen.

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Industry Competitors

PVR Cinemas

Big Cinemas : Division of Reliance MediaWorks Limited

516 screens spread across India, US and Malaysia.

Imax, 3D and 6D technology

Inox Cinemas : Diversification venture of the INOX Group into

entertainment. 30 multiplexes and 109 screens in 21 cities.

Cinemax: Largest Multiplex chain in Mumbai. First to Introduce Red

Lounge Luxury Viewing experience catering to Niche audience

Mumbai centric approach

Fun Cinemas : Promoted by the Essel Group, the company has about 140 screens across

India

Shringar Cinemas : oldest and well- known brands in the

Mumbai region

AA Films

Pyramid Saimira

UFO Movies

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About PVR and its SBUs

PVR Ltd. was incorporated in April 1995 pursuant to a joint venture agreement between

Priya Exhibitors Private Limited and Village Roadshow Limited, one of the largest exhibition

companies in the world. PVR pioneered the multiplex revolution in the country by

establishing the first multiplex cinema in 1997 at Saket, New Delhi. The opening of the first

multiplex heralded a new era in the Indian cinema viewing experience and which also

changed the industry forever. From then on PVR initiated many path breaking innovations in

the industry from launching in Bangalore the largest 11 screen multiplex in the country in

2004 to introducing Gold Class Cinema.

PVR also entered into a JV with Major Cineplex Group in 2008, a leading Film exhibition

and retail entertainment company based out of Thailand, to bring lifestyle entertainmentconcepts to Indian consumers. The Joint Venture enjoined setting up of bowling alleys,

karaoke centers, ice skating rinks and gaming zones across the country to enhance the out of

home entertainment experience for Indian consumers.

The company has four subsidiaries namely CR Retail Malls (India) Pvt Ltd, Sunrise

Infotainment Pvt Ltd, PVR Pictures Ltd and PVR bluO Entertainment Ltd. The company

operates a film distribution and production business through their subsidiary, PVR Pictures,

which acquires and distributes Indian and international films. The PVR cinema circuit in

India consists of 35 Cinemas with 154 screens spread over 20 different cities covering major

markets across the length and breadth of the country: Delhi, Faridabad, Gurgaon, Ludhiana,Ghaziabad, Mumbai, Bangalore, Hyderabad, Chennai, Lucknow, Indore, Aurangabad,

Baroda, Allahabad, , Ahmedabad, Udaipur, Chandigarh, Surat, Latur and Raipur.

In 2011 the PVR brand has been successful in entertaining more than 19 million esteemed

patrons across its properties. Currently, PVR Cinemas contributes 20-25% of domestic box

office collections of any leading Hollywood movie and 12-13% of any leading Bollywood

movie, highest across the Indian Film Exhibition space. PVR Ltd has established itself as

India's leading and most premium entertainment company, with presence in the entire value

chain with leadership position in Film Exhibition, Distribution and Production. It has also

successfully forayed into retail entertainment formats such as bowling Centres with BluO-

India's largest 24 lane bowling centre which was set up in Gurgaon in 2008.

The company also operates a film distribution and production business through PVR Pictures,

a 100% subsidiary of PVR Ltd. The movies co-produced by PVR Pictures include

"TaareZameen Par", "JaaneTuYaJaane Na", "Aisha" etc. Apart from the movies co-produced,

some of the other movies distributed by PVR include "Ghajini", "Golmaal Returns", "Sarkar

Raj", "Lions of Punjab", "Tum Mile", "Aviator", "Chicago", "Hannibal Rising", "Don",

Twilight Series", " Action Replay" to name a few.

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PVR Pictures, the film distribution and production business arm of Ajay Bijlis PVR Limited,

is launching a new division called Springboard for distribution of specialized, independent

films.

PVR, in order to solidifying its exhibition growth and strength also ventured into the business

of film distribution, set up PVR Pictures, a fully-owned subsidiary of PVR Ltd. PVRPictures, a strategic business unit, specialises in acquisition and local distribution of films.

The company in order to fuel its charted expansion plans has recently listed itself on the stock

exchange raising Rs. 150 crores from the market.

PVR FIRSTS

First to launch a multiplex in India - PVR Anupam Saket, Delhi

First to launch India's biggest 11 screen multiplex - PVR, Bangalore

First to bring premier movie viewing to India with the exclusive Europa Cinema and

Lounge at PVR Gurgaon

First to introduce Gold Class Cinemas in India at PVR, Bangalore

First to form a foreign joint venture with Village Roadshow, Australia

First to receive institutional funding in the cinema industryfrom ICICI Venture

First to offer computerised & online ticketing

First to accept credit cards in cinemas

First to introduce mobile based information & ticketing service

First to launch a loyalty program for movie-goers in IndiaFirst to launch 'Movies First' - a monthly magazine that updates the movie lovers on

the latest happenings in Bollywood and Hollywood

Our Competitive Strengths

Our cinemas are in prime locations Our cinemas are in prime locations, with

large catchment areas, surrounded by a good mix of retail and food and

beverages outlets and with adequate car parking facilities, making themattractive destinations.

We are considered a preferred anchor tenant and have strong relationships with

mall developers We are considered a preferred anchor tenant by shopping mall

developers because our Multiplex Cinemas generate significant footfalls. Our

presence in a development helps the developer to market the mall to other retail

businesses. As a result, we are able to obtain prime locations for our Multiplex

Cinemas on attractive terms.

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Strong relationships within the film industry

Our position as the largest Multiplex Cinema operator in India, our transparency

in reporting box office collections and our emphasis on film marketing have

helped us to build strong relationships within the film industry, both Indian andHollywood, enabling us to obtain an assured supply of films at competitive

rates.

Largest Multiplex Cinema operator in India As the largest Multiplex Cinema

operator in India, we are able to reap the benefits of economies of scale for our

operations. We obtain discounted rates on our capital equipment, food and

beverage supplies and for advertisements in newspapers. The size and

geographical spread of our cinemas enables us to offer a wide cinema footprint

to advertisers and sponsors.

Strong brand equity

Our brand, PVR, is one of Indias most recognized film exhibition brands. Our cinemas have

been designed with an emphasis on ambience and customer delight, with quality fit-outs,

comfortable seating and state-ofthe art audio and projection equipment. This coupled with

our customer-focused approach has made our brand name synonymous with high quality

cinema viewing in Delhi, Gurgaon, Faridabad, Ghaziabad and Bangalore. This has positioned

us an exhibitor of choice for movie patrons, enabling us to maintain stable occupancy rates at

ticket prices that are significantly higher than the industry average. Our strong brand equity

has also allowed us to enter into corporate alliances and co-marketing exercises with leading

companies such as Pepsi, Samsung, Hero Honda, Hyundai, LVMH, Airtel, Master Card, LG

Electronics, Nokia, Seagram, General Motors, Hindustan Times, and Lipton.

Emphasis on film marketing

We believe that one of the factors contributing to our success has been our use of innovative

techniques in the Indian film exhibition context to market films shown at our cinemas. We

organize movie screenings with film stars, conduct preview screenings for film critics,conduct movie-based promotions, distribute movie memorabilia and information and publish

an in-house movie magazine called Movies First. We also have a customer loyalty program.

We focus on local area marketing and sales, which allows us to build loyalty with customers

in the immediate catchments.

Promoter focus on film exhibition and innovative management Mr. Ajjay Bijli, our

Chairman cum Managing Director and one of our Promoters, is a pioneer in the Multiplex

Cinema segment in India and has over 15 years experience in the film exhibition sector. He

is focused on the film exhibition business and has contributed to our development and

growth. He was awarded with the Theatre World Newsmaker of the Year Award for 2003

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at FRAMES 2004, a global convention on the business of entertainment organised by FICCI.

In 2004, CineAsia, a prominent Asian film industry convention, gave him a special award for

his significant contribution to India's Multiplex Cinema segment.

He was recognized as Entrepreneur of the Year Entertainment by the Indian Retail

Forum held in Mumbai in September 2005 and Delhi Ratna by the PHD Chamber of

Commerce and Industry in August 2005. Our management team, led by Mr. Bijli and Mr.

Sanjeev Kumar, our Executive Director, has demonstrated its ability to think ahead of our

competition and remain innovative. Our current executive management team has a blend of

film exhibition and hospitality industry experience and professional expertise drawn across

different industries. Some of our current key employees have received formal training at

cinemas in Australia and Singapore operated by Village Roadshow. Proven project selection,

development and implementation skills We have evolved and implemented a structured

system of project evaluation and approval. Decisions on projects are taken on the basis of

extensive market research undertaken on the location and quality of the development by ourbusiness development team and leading specialized research organizations. We frequently

reject opportunities for cinema developments that do not meet our stringent project selection

criteria. We have an in-house specialized team for cinema design and implementation. This

team is supported by international and domestic project consultants. We have successfully

managed the development and implementation of 10 cinema projects. Scalable systems and

processes and uniform staff training Our uniform operational systems, processes and staff

training procedures will enable us to replicate our high operating standards across all future

cinemas. We use Vista software, which is used worldwide, across all our cinemas to capture

box office sales, food and beverage sales and sale of tickets on the internet. We use the same

rigorous cash and inventory control systems, and procedures for film scheduling, contracting,

advertising and management for all of our cinemas. All our systems and processes are

documented in a single manual. We have also developed robust and uniform staff training

systems.

PVR Strategy

With a strong appetite for movies and an upward migration of household income levels in

India, we believe that the Indian film industry, and the film exhibition sector in particular,

will continue to experience strong growth. Our main goals are to remain Indias largest and

most preferred cinema exhibition company. To achieve these goals, our business strategy

emphasizes the following elements:

Continue to provide the highest exhibition standards to achieve customer delight .

Increase the number of cinemas under our operation on a pan India basis. Our strategy is to

adopt a price-based differentiation model, offering our patrons a superior cinema-going

experience at each price point. Indias largest and most preferred film exhibition company.

Plan to open lower cost cinemas using digital technology along with the refurbishment and

remodeling of the cinema to give patrons a superior movie experience at an affordable price

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Capitalise on our market leader position and source consulting, development,operating and management business under the management fee/franchise model

Continue to maximise revenue from our existing cinemas.

We plan to increase box office revenue from our existing cinemas through flexiblepricing to attract patrons at various points in time of the day and by the week, bymaximizing the number of screenings of popular movies, corporate bulk sales of

tickets, and making the purchase of tickets easier through our website, the telephone

and electronic ticket kiosks.

Increase sales of food and beverages through product incentives, combo products ata cheaper price, which increases the average value of each transaction; and

Utilise additional areas adjacent to a few of our cinemas for restaurants/food courtsand sale of music CDs and cassettes. These additional areas are available in our

existing Multiplex Cinema, PVR Gurgaon, at Metropolitan Mall, Gurgaon and in our

properties under development at Juhu, Mulund and Sahara Mall in Gurgaon. We have

already sub-let the additional spaces at the MGF Mall to food and beverages outlets

on higher rentals.

Increase revenue from advertisers. As we increase our number of cinema screensthere will be an increase in the number of our patrons, which will increase the

attractiveness of our cinema circuit to advertisers. This should enable us to increase

our advertisement revenue.

Utilise economies of scale as we grow in size and expand our reach. Our goal for ourfilm distribution business is to be the preferred distributor for both English and Hindi

movies. Our strategy is to distribute Hindi films in the same territories where our

cinemas are located, whilst our strategy for international films is to purchase the entire

suite of distribution rights including the theatrical, satellite/television and DVD rights

for international films on an all India basis. With respect to international movies, we

intend to position PVR Pictures as the distributor of choice for independent

production houses that do not have a base in India for distributing their movies. We

intend to continue to follow primarily a derisked distribution model, which will be

based on commission and/or revenue sharing

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SWOT Analysis for PVR Cinemas

Strength

First mover advantage in the multiplex business in India.

Updated technology using Xenon technology for better movie viewing and also one of

the first multiplexes to introduce DOLBY digital surround systems.

Premium positioning.

Operating at higher margins.

Plays Hindi, English, Regional & foreign movies.

PVR is usually located in areas that will soon be developed and filled with retail

outlets and hence they have a strategic location advantage.Ambience.

Started the concept of a complete movie going experience.

Very strong brand equity.

TOM recall.

Original multiplex because it was the first to introduce the multiplex concept in

India.

Blend of retail & entertainment because along with cinema there is also provision for

F&B, shopping, etc.

WEAKNESS

High cost perceptions.

Overdependence upon uninterrupted supply of electricity / water etc.

T.A very specific (not mass service).

Disjointed images for all PVR properties.

Customer retention as many competitors are cropping up with competitive prices.Parking problems at some locations as they are inside malls, etc which interferes with

the space availability.

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OPPORTUNITIES

First mover advantage.

Growing family spend on entertainment due to high disposable income.Large film industryover 200 Hindi films every year and also many international

releases giving preference to India.

Alternative sources of contentCricket, F1 etc at PVR.

Distribution of electronic films to combat piracy.

PVR loyalists who prefer no other brand.

THREATS

Competition blooming large and many small players emerging in the market.

Governments interference.

Entertainment Tax.

Single screen theatres scattered all around which show same movies at very low

prices by compromising on the quality and ambience.

Other means of entertainment such as plays, recitals, concerts, etc.

Very little control over piracy.

Movies becoming bigger than the brand due to increased marketing of movies in

recent times.

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Porters 5 force analysis

THREAT OF NEW ENTRANTS

Investment Barriers

The investment barriers for the film exhibition are relatively insignificant. The cost of setting

up a 1200 seater multiplex in a metropolitan city is between Rs. 8-9 Crores apart from the

cost of leasing the land. Assuming a 40% occupancy rate and average ticket price of about

Rs. 100 and an operating margin of 25% the payback period is between 4-5.5 years. If food

and beverages earnings are taken into account this reduces to 3.5-4.5 years. Theatres have a

negative working capital requirement. This means that a multiplex project can generate free

cash flow in a very short while.

Regulatory Barriers

There are regulations that require that new films released in cinemas, may not be shown

on television or released on home video for a fixed window of time. This regulation is

intended to protect distribution in the cinema from the development of television and

video. The clearance periods may vary according to the box office success of a film, thus

creating further discrimination. This ensures that depending on the films potential, the

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exhibitors have sufficient period to lock-in as much profit as they can before the video

and television release of the film.

Established relations with the major distributors

Big players who have been in the film exhibition business for some time have established

close relationships with distributors. With lobbying with the distributors being extremely

important for rights acquisition to first-run movies; these relationships prove to be crucial

in getting rights to the most anticipated films.

Squeezing out small players

The rapid growth of the multiplex variety of film exhibition and its growing dominance

in deals with the distributors has meant that small theatres have to be content with the second-

run movies leading to major competition for the first-run big-banner movie exhibition

between the multiplexes only. All these factors result in this factor being attractiveto the new

entrants. In fact new entrants to the industry are mostly in the form of producers / distributors

entering as a vertical integration strategy.

THREAT OF NEW SUBSTITUTES

Though not a direct substitute, video and television releases for a movie are close substitutes

for movies exhibited in cinemas. Due to the regulations as mentioned before, this substitution

is mainly for the second-run of the movies. This effect is bound to increase as pay-per-viewtelevision is introduced and producers find television releases more profitable.

Where multiplexes differentiate from these substitutes is in the entire experience that

watching a film in a theatre provides. Watching a newly released film on the big -screen

with the entire family is a major attractant for the movie-goer.

Hence the avid movie-goer (which is a large proportion of the audience for a first-run film)

will never exchange the experience for watching the movie on video. For some families a

movie might be a form of a family outing. For such cases other forms of entertainment like

amusement parks might be considered as remote substitutes.

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All of this suggests that the ambience and quality of movies and infrastructure would play a

major role is mitigating this threat of substitutes.

Hence there is little threatof substitutes for first run films and is mildly unattractive for

second-run films.

POWER OF SUPPLIERS

The suppliers here are the film distributors and vendors for the food and beverages. Of these

the maximum power is wielded by the distributors. Although the process of giving exhibition

rights is supposed to be through inviting for bids, such transparency rarely exists and most of

the deals are closed through lobbying. Refusal to supply is a major concern for any exhibitor.

A decision by either of the two largest distributors to refuse to supply first run to an exhibitor

may lead to the destruction of that exhibitors business where that exhibitor is in acompetitive market. The decision

by a distributor not to supply may also be due to the exhibition site being of inferior

quality or that there is insufficient demand to justify a first release print.

This results in the power of suppliers being unattractive for the incumbents.

POWER OF CUSTOMERS

The customers usually choose a theatre based on the proximity of the theatre to the place of

residence / work. They dont differentiate much between theatres unless the ambience is very

different. Also there is a interesting heuristic observed in the location of the multiplexes

summarized by the 5-mile rule which states that no two theaters (competing or otherwise)

can show the same film if those locations are within five miles of each other.So a customer

is forced to go to the only theatre in her proximity which is showing the film she wants to see.

She will go to a theatre even if she is unhappy with it provided her desire to see the movie is

high enough. Besides this, many exhibitors are coming up with Customer Loyalty Programs,

further reducing the power of the customer. This results in the power of customers being veryattractivefor the new entrants.

INTERNAL RIVALRY

The major players in the multiplex business are PVR, Inox Leisure, Adlab Films and Shringar

Films. Now there are many new players competing with each other. The rivalry among these

players is mostly restricted to location selection. With new malls springing up very rapidly,

and multiplexes also looking to expand in numbers and into new areas negotiating lease deals

with mall owners is very important. A new trend emerging (as shown by the entry of Shringar

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Films, is that of vertical integration by production houses / distributors into the multiplex

business. Producers / distributors have realized that their operations could be enhanced by

joint control of distribution and exhibition. With producers wielding all the control over their

films, this could mean squeezing out of competition from independent exhibitors. But as of

now the integration have benefited to improve efficiency without much of a negative effecton competition.

Overall the internal rivalry in the industry is attractive for the incumbents.

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MARKETING MIX7 Ps

PRODUCT - While developing a service product; it is important that the package of

benefits in the service offer must have a customers perspective. Core Benefit is theMOVIES that the customer comes to a cinema hall for, along with the attendant

experience of PVR. The expected product in PVRs case would be ambience,

hygiene, good service, parking, candy bar etc. PVR has augmented its product

offerings:

Luxury cinema - PVR has brought to its customers the experience of luxury cinema.

After the tremendous success of Cinema Europain Delhi, PVR Cinemas has

introduced the concept of luxury viewing to Bangalore as well. Gold Class Cinemas

have been introduced for the first time in India, are two ultra luxurious exclusiveauditoriums, each equipped with 32 plush and fully reclining seats and generous

legroom. Patrons can also enjoy star like treatment at the exclusive Gold Class lounge

which provides an excellent pre cinema experience with scrumptious food and

beverages.

Bulk Bookings - There are special arrangements for bulk bookings (of twenty or

more tickets) done by corporate. Details can be filled online and PVR executives

themselves get in touch with the concerned people.

E-booking and tele-booking - PVR also provides the factility of e-booking, which

was first started by PVR, it has now been copied by Satyam cineplexes as well. It also

offers telebooking.

Parties at PVR - PVR has also started helping customers in planning birthday/kitty

parties at PVR. They have made PVR a wholesome entertainment experience than

just a movie watching spree.

Movie newsletter and magazine - To keep its customers hooked on to movies and to

PVR, it has also come out with an online newsletter called PVRWire is directly

mailed to the subscribers and can also be downloaded from their website. They have

also launched a movie magazine called Movies First.

Movie vouchers - They have also taken out the unique concept of movie vouchers

which people can use as gifts. Many corporates have also started using these asincentives and rewards for their employees. The vouchers are available in

denominations of Rs 100 to Rs 350 and a minimum of 25 coupons needs to be

purchased to avail of the offer.

PRICE - PVR when started off had a huge advantage of being the only one of its kind

in Delhi to begin with. Therefore, they could charge a higher amount to its target

audience, as they did not hesitate to pay the sum for the new concept. This high

pricing helped them make maximum gains. Also, PVR had, and still has a very well

planned market position. Its premium positioning affects the customers perceptual

positioning. In case of PVR, they make use of all their tangible elements to prove to

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their customers that their movie tickets are worth the price they are paying. Also,

since some of the other movie theatres (which are not multiplexes) are still offering

movies at rates as low as Rs 35, it is the task of its marketer to ensure that PVR comes

across as a superior brand in terms of cinema viewing as well as the experience. The

movie theatres market is a Free Market, even though the government in the pastregulated it. This allows PVR as the market leader to set its own prices. Prices that

had originally started from Rs 125 (for evening shows) and Rs 90 (for morning shows

and weekday plans) have increased to a high of Rs 150 and the lowest is Rs 100. The

high pricing however has not led to any change in the footfalls that PVR gets. Even in

slighter crowded shows, the occupancy rates as low as 35% reaches PVRs break-

even points. The pricing at PVR Europa is Rs 160 and a Gold Class ticket is charged

at Rs. 750 and even goes upto Rs. 900. It offers superior ambience, environment,

seating, viewing etc in the sum.

PLACE - The issue of location here plays a very important role, as all PVR Cinema

Halls are stationed at good locations in the city, which gathers a large number of

footfalls for them every day. PVRs usually open at an eventful yet untapped location,

followed by which (as we saw in case of Anupam PVR Saket) other retail chains get

opened around it as well. Their places are always well situated and are well linked.

PVR does not have any other channel of distribution, as their service is sold solely at

their chains. They do not follow any franchisee outlets, even though they indulge in

ticket sales online and via tele-booking. The only intermediary involved for procuring

movies are Indian as well as international movie distributors, by way of whom they

acquire the movies.

PROMOTION - PVR as a brand indulges into print advertisements on every Friday

giving out the latest movie schedules. Any new developments are communicated to

the audience via press releases. Hence there is a strong element of PR involved. Apart

from that, they usually have contests pertaining to latest festivals like Valentines Day,

New Years Eve, Oscar Movies Week etc. PVR also has a host of online promotional

contests associated with movies. They are also in collaboration with cellular services

like Airtel have SMSand- win contests and give out free tickets to the winners. Also,PVR attracts a lot of commercial shooting / media coverage via programmes etc

which promotes it as a brand in a big way. Organizing Star Events on Premiers of

movies like Kuch Kuch Hota Hai helps PVR relate better with its target audience i.e.

the youth. The whole PVR banner and its exterior environment including movie

hoardings, banners etc help promote the concept of movie viewing as well as PVR as

a strong and successful brand. PVR also hosts premiere shows with leading movie

stars visiting the various PVR cinemas. They also host numerous fun events for

children while screening animations etc.

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PEOPLEThis indicates the Employees and Customers. Service must be fully

developed and internally accepted before its launched. PVR indulges in the

following: Complimentary ticket on payment of entertainment tax amount at any

point of time (2 days in advance) to the employees, subject to Availability, Tickets to

employees are given for: 1+1 oneself and employees guest and 2 for immediatefamily i.e. parents, spouse etc. This has been done to encourage movie going among

employees as well as customers, Gives 10 national holidays to employees, Report

customer grievances to managers, Strict on rules on no smoking, drinking on job etc,

They are given personalized badgessymbolizes that the employees pride themselves

on being a part of the PVR family, Very great importance is given to person hygiene

and appearanceClean uniform and shoes, Not allowed to make a gesture to ask for

any sort of a tip / gift from customers, Job performance evaluation at the completion

of first 90 days of employment. They are evaluated once a year on their anniversary of

date of joining by individual superiors and records regarding employees progress are

evaluated, all employees are taught to deal with safety problems like accidents, Fire,

bomb threat, armed robbery etc. All trainees are made to train at all departments like

ticket sales, computer ticketing, telebooking, sales enquiries, customer service skills,

cash handling sales, credit card sales etc. Lastly, it is made sure that all employees

represent PVR in the best way possible and sell it as a strong and well-established

brand. All employees are given full details on what they are representing and

informed all about PVR to make them a part of the family. For the customers

convenience, it is ensured by the organisation that there are no loopholes. In case of

any customer complaints, the employees are immediately directed to report the same

to their managers. The nature of all employees is very friendly, informed, helpful,reliable, soothing, cheerful and youth-like. Therefore, the audience can easily relate

and communicate with them.

PHYSICAL EVIDENCE - Though customers cannot see a service, but they can

definitely see various tangible clues of the service offer like facilities, communication,

objectives, employees, other customers, price etc. On basis of these, he forms his

opinion as they help us to make the service tangible. Therefore, it is essential to

manage physical evidence. Atmospherehelps to shape opinions. The building,

layout, colours of interiors, tickets, labels, logo of the organisation etc help to

formulate a good unified corporate image / identity

.

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PROCESS - It was the first cinema company to introduce computerized ticketing

through use of international box office software in its cinemas; first cinema to accept

credit cards in

PVR Talkies PVR Premiere PVR Gold Class

Product 3 screen multiplexes 6-10 screen

multiplexes

6 screen multiplexes

Price Approx. 60-100 Rs Approx. 80-350 Rs Approx. 600-900 Rs

Promotion Print Ads in local

newspapers, Contests,

Bulk ticketing

Print Ads, Movie

events, contests, bulk

ticketing

Print Ads, Movie

events, contests, bulk

ticketing, pressreleases, private

screening, venue hire

Place Tier 2 & 3 towns

EG: AURANGABAD,

LATUR ETC

Tier 1 cities

Mumbai, Bangalore

etc

Tier 1 cities

Gurgaon, Delhi NCR ,

Hyderabad etc.

Physical Evidence Air cooled theatre, non-

recliner seats

Air conditioned

theatre, recliner seats,

ticket dispensing

machines

Air conditioned

theatre, controlled

recliner seats, ticket

dispensing machines

People Training & Benefits

Process Online ticketing, tele- booking, Booking at the venue

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STPD for PVR Cinemas

Segmentation

On the basis of customer preferences, we may classify PVR under the Clustered category.

This is owing to the fact, that out of the entire masses they have clearly defined their target

audience and aim to cater to them. Also, PVR is a Concentrated Market because they only

cater to the premium movie-going audience i.e. SEC A and SEC B. PVR Cinemas has

approx. 22 million movie goers per month

Consumer Demographic Segmentation

Age: 61% between 18 and 49

Gender: 47% Males / 53% Female

Income: 61% have income over 50K

Education: 55% of adult movie-going audience has attended/graduated college. Of these

adults, 37% have college degrees or higher

Consumer Psychographic Segmentation

PVR Movie Goers are people with high resources and can be classified as Experiencers

who seek variety and entertainment. Spend a comparatively high proportion of income on

fashion, entertainment, and socializing.

PVR Movie Buffs generally have the following major tendencies:-

-Go outside the home for entertainment

-Participate in sports and other active lifestyles

-Hard to reach through other traditional media

-lighter television and radio users, but heavy internet users

-Receptive to advertising in movie theatres, consider as part of their movie going experience

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PVR Talkies targets SEC B and C whereas PVR Premiere and Gold target segment A1, A2

and B1

Targeting

PVR being the first of its kind has always been a market leader and therefore its offeringto

the customer is Innovative.

PVR has premium pricingand they target mainly SEC A and SEC B. PVR has brought to its

customers the experience of Luxury Cinema. PVR uses the concentrated method as they have

target a much focused audience out of the entire masses. PVR witnessed tremendous success

Europa Loungein Delhi. PVR Cinemas has also recently introduced the concept of luxury

viewing to Bangalore. Gold Class Cinemashave been introduced for the first time in

India, are two ultra luxurious exclusive auditoriums, each equipped with 32 plush and fully

reclining seats and generous legroom. Patrons can also enjoy star like treatment at the

exclusive Gold Class lounge which provides an excellent pre cinema experience with

scrumptious food and beverages

PVR Priya ofPVRs chain use Differentiation method for pricing. It practices different price

slabs for different target audience. For instance, they have tickets ranging from Rs 45 (for theyouth) to Rs 140 (for the upper class i.e. SEC A).

Positioning

PVR had, and still has a very well planned market position. Its premium positioningaffects

the customers perceptual positioning. Therefore, they decided on their marketing strategy and

pricing, keeping the target market in mind. In case of PVR, they make use of all their tangible

elements to prove to their customers that their movie tickets are worth the price they are

paying. Also, since some of the other movie theatres (which are not multiplexes) are still

offering movies at rates as low as Rs 35, it is the task of its marketer to ensure that PVR

comes across as a superior brand in terms of cinema viewing as well as the experience. Its

positioning is evident in its mission statement also which says A commitment to deliverthe

best quality cinema viewing Every where, Every time.

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Differentiation

The points for differentiation are as follows

Provides multiplex experience at certain locations within the budget at PVR Cinemas

where they have differential pricing and PVR Talkies which are budget theatres.PVR Gold has a bar and a lounge inside the theatre which provides complete

entertainment and not just a multiplex theatre experience.

PVR Gold has ticket rate inclusive of freebies and merchandise.

PVR Premiere has differential pricing as per area and show timings

PVR Saket has the distinction of having the widest screen in India.

First to offer online ticketing facilities and also the first to accept credit card payment.

Has its monthly magazine called Movies First that updates the

movie lovers on the latest happenings in Bollywood and Hollywood.

The only cinema to introduce the Gold Class concept in India.

Has the best design in current multiplexes and thus gives the customer the best movie

experience.

PVR talkies PVR Premiere PVR Gold Class

Segmentation SEC B,C SEC A2, B SEC A1,A2

Target Age 3+ Age 3+ Age 3+

Positioning Value Positioning Quality Positioning Luxury Positioning

Differentiation Multiplex

experience within

the budget

Differential Pricing

as per area & show

timing

Freebies, Bar,

Lounge, Controlled

recliner seats

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Promotions by PVR Cinemas

PVR customers who use Visa Platinum, Visa Signature or Visa

Gold cards who buy cinema tickets through http://

www.pvrcinemas.com/will receive one free ticket out of every

two tickets purchased

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Financial Performance of PVR Group2010-11

Financial Review:

While the performance of the Company for the first nine months of 2010-11 was decent,

however the fourth quarter was impacted due to the Cricket World Cup as no blockbuster

movies were released during the period. On an overall basis, the company has been able to

demonstrate promising growth in revenues led by 7%-10% growth in ticket pricing and food

& beverage realizations across the same stores.

The success of big blockbuster movies like Rajneeti, Housefull and Dabangg boosted the film

industrys fortune. Small Budget movies like Peepli Live, Phas Gaye Re Obama, Tanu Weds

Manu among others also did well at the Box Office.

During the financial year under review the total income of the Company were Rs. 360 Crores

as compared to Rs. 280.6 Crores in 2009-10, up by28%. EBITDA for 2010-11, were Rs. 60.7

Crores as compared to Rs. 31.7 Crores in 2009-10, up by 91%. Profit

The company at present operates 33 properties with 142 screens in 18 cities across the

country. The company added 19 Screens at 3 locations i.e. Chennai, Ahmadabad and

Lucknow in 2010-11. The Company had signed

Agreements/MOUs for 75-80 screens for the coming financial year in different parts of the

country including cities like Udaipur, Vijaywada, Delhi, Mysore, Bangalore, Bhopal, Pune

etc. which will further boost the revenues and profitability of the company.

The pipeline of the movies for FY 2011-12 looks exciting and the company expects its

revenues to consolidate further on the strength of its properties in the best locations.

The company expects that about 25-30 3D films that are expected to be released in financial

year 2011-12, will fetch higher ticket prices.

The company also has a plan to install digital IMAX theatre systems at its four locations in

India. The first two of them would be installed within the next 12 months at Companys two

multiplexes in Mumbai and Bangalore.

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Subsidiaries

As on March 31, 2011 the Company had three subsidiary companies namely M/s CR Retail

Malls (India) Limited (CRR) a wholly owned subsidiary, M/s PVR Pictures Limited (PVRPictures) and M/s PVR bluO Entertainment Limited (PVR bluO).

CR Retail Malls (India) Limited (CRR)

CR Retail Malls (India) Limited operates the 7 screen Multiplex at ThePhoenix Mills

Compound at Lower Parel, a prime retail and entertainment destination in Mumbai. CRR

during the period 2010-11 recorded an income of Rs. 28.65 Crores and a Net Profit of Rs.4.06 Crores.

On 5th May, 2011, PVR Ltd. entered into an arrangement with JM Financial group of

Companies for sale of equity shares of CRR. Under the terms of sale of entire equity share of

CRR, PVR Ltd. has realized Rs. 100 Crores. PVR has also entered into a lease agreement

with CRR to continue to operate the multiplex property on a long term lease basis.

PVR Pictures Limited (PVR Pictures)

PVR Pictures is in the business of film production & distribution. The year under review was

adversely impacted on account of poor performance of companys production Khelein Hum

Jee Jaan Sey. As a result the company incurred a loss of Rs. 22.18 Crores at PAT level

during 2010-11. The loss after excluding Minority Interest was Rs. 13.31 Crores.

Due to these losses both the investors i.e., JP Morgan Mauritius Holdings IV Limited and

India Advantages fund (IAF) have shown their intention for exiting from the company. Your

company (PVR Limited) has now decided to purchase balance 40% equity share capital of

PVR Pictures Limited from the said two investors and pay Rs. 60 Crores i.e., Rs. 30 Crores to

each of the said two Investors. Post acquisition of 40% share capital by PVR Limited, PVR

Pictures Limited shall become a wholly owned subsidiary of your Company.

The company is in the process of completing a movie Shanghai which is being directed by

Dibakar Banerjee starring Abhay Deol and Emran Hashmi and is expected to be released in

the third quarter of the FY 2011-12.

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PVR bluO Entertainment Limited (PVR bluO)

PVR bluO in the financial year 2010-2011 earned a Net Revenue of Rs.14.27 Crores and a

Profit after Tax of Rs. 2.08 Crores.

Presently the company operates Indias largest bowling alley center in Ambience Mall,

Gurgaon. The center has been able to establish itself as a premier leisure and entertainment

destination for consumers in NCR.

The Company has made a roadmap for expansion of its business and has plans to open

additional 3-4 bowling centres in India in next 12 months.

6D Technology

Originally, 6-D technology was perfected by the Brainstorm Institute for use in PowerPooint

presentations. Although PowerPoint presentations can be viewed on the desktop, spectacular

results are achieved when they are projected onto a large screen for conferences, shows,

exhibits, or other presentations.

Another use for Amazing 6-D (twice as good as 3-D!) Technology is to create stunning

HyperFlash animations. HyperFlash is an ideal way to add some extra "pop" in your

PowerPoint presentation or on a web site.

Speaking of web sites, Amazing 6-D (twice as good as 3-D!) Technology can also be used

throughout your web site to add an extra dimension of fun to the viewing experience.

Doc Collins and the rest of the The Brainstorm Institute's faculty are currently exploring

methods of incorporating Amazing 6-D (twice as good as 3-D!) Technology into videopresentations, theme park exhibits, medical, technical and scientific applications, live theater,

clothing, and other innovative forums. In addition, Amazing 6-D (twice as good as 3-D!)

Technology can be adapted for use in print materials as well as electronic

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References

http://www.bestmediainfo.com/2011/07/indian-entertainment-media-industry-to-grow-by-13-2-cagr-

pwc/

http://www.pvrcinemas.com/corporate/about-us.aspx

http://www.indiainfoline.com/Markets/Company/Background/Company-Profile/PVR-Ltd/532689

http://www.pvrpictures.com/about-us/

http://www.pvrbluo.com/about_bluo.html

http://www.filmfare.com/articles/top-10-exhibitors-1286.html

http://www.sebi.gov.in/dp/pvrlimited.pdf

http://www.indiaprwire.com/misc/pvr-cinemas.htm

http://www.selectcitywalk.com/cinemas.htm

http://www.4psbusinessandmarketing.com/24042008/storyd.asp?sid=1872&pageno=2