PVR expands IMAX screen footprint

Its five-screen deal with IMAX amounts to an investment of Rs 55 cr

Cinema exhibition chain PVR has signed an agreement with the IMAX Corporation to add five more IMAX theatres by the end of 2019. The Ajay Bijli-led exhibitor currently runs four IMAX screens in the country with a fifth screen installed and ready for operation in the coming weeks. This deal with PVR Cinemas marks one of the largest single theatre signings for IMAX in the country, bringing the total number of IMAX theatres to 26, with 11 currently open and 15 contracted to open.

Through this roll-out, PVR will reach a count of 10 IMAX screens and will retain its position as the largest IMAX partner in India. Two of the five new screens will be rolled out by August and the rest will follow. The new IMAX theatres are planned to be located in metros like Delhi and will comprise a combination of new and existing PVR properties.

"The tremendous success of our existing four IMAX theatres, along with the upcoming slate of differentiated and exclusive IMAX content, provided us the confidence to double our commitment and continue to leverage IMAX as a strategic part of our business," said Ajay Bijli, Chairman & Managing Director, PVR Limited. "With IMAX anchoring our most important locations, we look forward to further strengthening our presence in India by offering our patrons the most technologically advanced movie going experience available."

The cost per IMAX auditorium (or screen) is in the range of Rs 10 to 10.5 crore (including the civic cost and infrastructure cost), which puts PVR's investment on this expansion at Rs 50 to 55 crore. the average cost of setting up a normal screen (organically setting it up or acquiring an existing screen) is in the range of Rs 2 to 3 crore, depending on the location of the property. IMAX screens thus come at a premium of 3 to 5 times the cost of a normal screen. However, Gautam Dutta, CEO, PVR Ltd says that adding IMAX screens has a positive impact on EBIDTA since it adds revenues streams that can be exploited over the long term.

"IMAX screens add three major revenue streams/avenues. For one, the ATP (average ticket price) for these screens is easily Rs 100 to 150 more than the normal screens. The occupancy, when we compare on an annual basis, is five to seven per cent more than the normal screens. Also, it opens the avenue of getting on board naming sponsors. Globally, the practice IMAX has a practice of launching co-branded screens and the sponsorship revenue significantly adds to the revenue bucket," he explains. The practice of name sponsorship is already in place at PVR for its IMAX screens. For example, the exhibitor has Kotak Mahindra Bank as a co-branding partner for its IMAX auditorium in Mumbai.

"We are really pleased to continue to develop the IMAX footprint in India, the fifth-largest film market in the world, with PVR," said IMAX CEO Richard L Gelfond. "We've been trying to develop the Indian market for 15 years, and now finally have the momentum to build out our brand nationwide and release Indian films. Our 26 theatres in India, signed or open, and our 10 signings in the last year show that India is becoming a very important market for us."

PVR Cinemas currently operates a cinema circuit of 579 screens at 126 properties in 50 cities with four IMAX screens in Mumbai, Bengaluru and Noida.