New Delhi: PVR and Inox, India’s top two multiplex chains, on Sunday announced a surprise merger to create the country’s largest multi-screen player as they looked to emerge from the pandemic-induced slump and seek to tackle the onslaught from content streaming giants.

Ajay Bijli of PVR and Siddharth Jain of Inox Leisure told TOI that the move would help the merged entity — to be called PVR Inox with over 1,500 screens — better compete with the new-age deep-pocketed rivals, and added that the benefits of the synergy may be passed on to consumers in terms of aggressive ticket prices.

“We will become an entity with much stronger balance sheet. There is a lot to be done, and India is still an under-screened country,” said Bijli, who will be the MD of the merged entity.

-----------------------------------

The merger of PVR and Inox comes in the aftermath of the pandemic, when there’s a need for a consolidation in the multiplex industry and “creating scale to achieve efficiencies critical for long term survival of the business” and to fight OTT platforms, said PVR’s Ajay Bijli, who will be MD of the merged entity.

“There is no doubt that consumer (content viewing) habits got changed (during the pandemic). One can say that there was no choice but to consume a lot of content on small screens and OTT platforms… you have big OTT players with very deep pockets. Only if you become stronger can you do that (compete). The pandemic expedited consolidation and made it more of an important thing to happen,” Bijli added.

Jain, who will be a non-executive director on the board of the merged entity, said that multiplex cinema screens were the “hardest hit” in the past two years and a stronger, merged entity was an effective way to make a comeback while also growing operations. “Someone has to start the investment cycle. What better way to do that than come together and do it… This partnership will bring in enhanced productivity through scale, a deeper reach in newer markets and numerous cost optimisation opportunities.”

The amalgamation is subject to regulatory approvals, which may take six to nine months. With the biggest screen population for any entity (India has around 9,600 theatre screens), the merger will also require approval over competition issues.

As part of the plan, Inox will merge with PVR. After merger, PVR promoters will hold 10. 62% stake while Inox promoters will have 16.66% in the combined entity. Inox shareholders will receive three shares in PVR for 10 shares of Inox.

The new company will have a board strength of 10 members, and both promoter families would have equal representation with two seats each.

-----------------------------------

Mumbai: India’s leading multiplex chain, PVR, will merge with INOX Leisure, the second biggest, to create the country’s largest film exhibition company — with 1,546 screens in 341 properties across 109 cities. The move is a surprise as PVR had reportedly been in advanced talks with the local unit of Mexican company Cinépolis for a possible merger.

Boards of both companies approved the all-stock amalgamation of INOX with PVR on Sunday. After the merger, INOX promoters will hold 16.66% in the merged company, while those of PVR will have 10.62%. The merger is subject to approval by regulators, shareholders and stock exchanges.

It will likely not require Competition Commission of India (CCI) approval, said some analysts, as the threshold of Rs. 1,000 crore won’t be exceeded, given the damage to the sector caused by Covid-19, which closed theatres for months on end. INOX shareholders will get three shares of PVR for every 10 they hold, according to the terms of the deal. On Friday, stocks of PVR and INOX traded at their 52-week highs.

PVR closed at Rs. 1,827.60, up 2.8%, for a market value of ₹11,120 crore on the BSE. INOX ended at Rs. 470.50, up 6.3%, for a market value of Rs. 5,740 crore.

The combined entity will be named PVR INOX, although the current branding of existing screens will continue. New halls will be branded PVR INOX.

“This decisive partnership would bring in enhanced productivity through scale,” said INOX director Siddharth Jain.

PVR chairman and managing director Ajay Bijli said, “The film exhibition sector has been one of the worst impacted sectors on account of the pandemic. Creating scale to achieve efficiencies is critical for the long-term survival of the business and (to) fight the onslaught of digital OTT platforms.”

The deal, if completed, will reshape the country’s film exhibition industry that’s seeing its first consolidation in the past decade and a half. After the merger, the promoters of INOX will become co-promoters in the merged entity along with the existing promoters of PVR. The board of the merged company will be reconstituted with a total strength of 10. Both promoter families will have equal representation with two board seats each.

INOX’s Pavan Kumar Jain will be non-executive chairman, while PVR’s Ajay Bijli will be MD and his brother Sanjeev Kumar Bijli will be executive director of the merged company. Jain will be non-executive, non-independent director in the combined entity.

As theatres remain shut, talks of reintroducing the concept of drive-in theatres in India are revving up
Prashant Singh (HINDUSTAN TIMES; August 28, 2020)

Ever thought of watching a film under the open sky? Well, that could soon be a reality as the concept of drive-in theatres seem to be vrooming ahead in India. As per reports, while PVR Cinemas is readying to launch its first drive-in theatre in Mumbai, Carnival Cinemas has “identified three locations in Bengaluru, Mumbai and Kochi.” It’s believed that the latter plans to kick off some operations “in the next two months”. A realty consulting company is apparently in talks with an Indian firm for drive-in cinemas around various places such as Delhi, Mumbai, Hyderabad and Punjab.

Novelty factor
So, are drive-in theatres the next big thing? “It could be a big market if planned properly. They could also be the ‘big-screen experience’ in a totally new way. Also, after multiplexes, we haven’t had a new addition in the space of movie consumption, so this could shake things up,” says trade analyst Taran Adarsh, who remembers watching numerous films at a drive-in theatre in Bandra in the 70’s.

Experts feel the investment on a drive-in theatre could be anything between ₹3-5 crore depending on the location/size of the property, facilities and the capacity of vehicles. Drive-in theatres used to be popular in places such as Mumbai, Ahmedabad and Bengaluru but lost its appeal due to the multiplex boom. They, however, are still very popular in European countries as well as the US.

Economically viable
“For audiences, it can be a totally new, unique experience. But the most critical part is that it has to be planned and executed in a manner wherein it’s financially feasible – in terms of earmarking properties, ticket prices and number of shows etc. – in every way possible,” says exhibitor-distributor Akshaye Rathi, adding: “However, in India, where we are under-screened, drive-in theatres could also be a great, novel way to add screens. Especially, in tier-2 and tier-3 towns, where the land prices are reasonable/affordable, it can provide people new ways of entertainment.”

At the same time, industry insiders feel “very limited number of shows” [only post-sunset], higher ticket prices [including car parking fees] as compared to regular theatres and India’s extreme weather pattern could be a few reasons why drive-in cinemas may be a challenge. “Safety is also a huge concern. Back in the day, at Bandra’s drive-in theatre, patrons’ safety became a problem due to incidents of looting and attacks on vehicles. Such things have to be taken care of on priority,” says Manoj Desai, executive director of the G7 multiplex and Maratha Mandir.

Safety & privacy
Experts agree that at a time when social distancing and lockdown have become a part of life, drive-in theatres are likely to attract audiences in a big way. “For me, more than watching a film, drive-in theatres would be all about enjoying that special experience,” says filmmaker Nikkhil Advani, who watched many movies at a drive-in theatre, as a kid in Mumbai.

He adds: “Now, with high-end technology such as Bluetooth, great sound systems, LED screens etc., let’s see how things go. I’m sure besides the younger generation who haven’t experienced it yet, there are going to be many like me who would want to have that experience all over again.” Adarsh puts things in perspective: “This concept may sound appealing to people considering the times [Coronavirus pandemic] that we are living in.”

Industry insiders weigh in on crisis brought on by Coronavirus pandemic as the face-off between exhibitors and producers escalates
Himesh Mankad (MUMBAI MIRROR; May 16, 2020)

On Thursday, after the makers of the Amitabh Bachchan and Ayushmann Khurrana-starrer Gulabo Sitabo announced a digital release for their film, given the looming uncertainty over theatres reopening, the multiplex chain Inox made its displeasure clear, calling the decision “alarming and disconcerting”. Inox said it will now be constrained to examine its options, and reserves all rights, including taking retributive measures in “dealing with such fair-weather friends”. The statement ended with a request to content creators to follow the age-old, established windowing pattern, which is in the best interests of all stakeholders in the value chain. On Friday, another Bollywood film, the Vidya Balan-fronted Shakuntala Devi, was announced for a direct-to-digital release, as did five south films, Ponmagal Vandhal, French Briyani, Law, Penguin and Sufiyum Sujathayum, fuelling the debate further.

Pointing out the need to stay united in the wake of the “greatest public health and economic emergencies of our lifetimes”, the Producers Guild of India slammed the multiplex chain’s “unconstructive messaging”, maintaining that by calling for retributive measures, they do not lend themselves to constructive or collaborative dialogue, which is the way forward for the industry.

The Guild’s statement, issued on Friday, went on to reiterate that the production sector, like the exhibition sector, is suffering hundreds of crores of losses on a daily basis as insurers refuse to cover the cost. “Interest costs are mounting on amounts raised to fund films, with producers having to bear this additional burden with no date in sight for cinemas to re-open; in fact, with the knowledge that cinemas may be one of the last sectors of the service industry likely to be given permission to re-open,” it pointed out, adding that re-opening of cinemas, when it happens, is bound to be staggered across the country and the overseas market, which will impact the performance of a film. The Guild also reasoned that there will be a huge backlog of releases, and the smaller and medium scale films especially will suffer as a result.

The statement concluded by stressing on the importance of emphasising the predicament of the other, rather than adopting an adversarial stance which is counterproductive for the entire value chain. It maintained that a theatrical release will always be the preference for movies that were conceptualised as cinematic experiences.

Reiterating this, Kamal Gianchandani, CEO, PVR Pictures, pointed out that his multiplex chain believes that a theatrical release is the best way for audiences to experience the labour and creative genius of filmmakers, not just in India but globally. He is confident that once this crisis is over, there will be a demand from cinegoers, who’ve been cooped up at home for several weeks, to open theatres.

“We are disappointed with some producers for going straight to streaming platforms instead of acceding to our request to hold back releases till cinemas reopen. That said, this is not the first time films are being premiered on OTT. Cinema exhibition has regularly faced competition from new emerging distribution platforms over the last many years and still continued to enjoy the patronage of cinegoers,” he pointed out, saying that they appreciate producers who have publicly supported theatres and decided to reschedule their releases.

Shariq Patel, CEO of Zee Studios, who is co-producing Khaali Peeli and Gunjan Saxena, says he can understand theatre owners being disappointed, but points out that halls have been shut for the last two months and no one knows when they will re-open across India and the world. “So, every producer is well within his right to monetize asset that has been ready for a while. It’s a rational call and not a vindictive step. As and when cinemas open, there will be a steady flow of films again,” he promises, saying they are considering options like everyone else in the industry but no contracts have been signed yet and conversations are happening between theatre chains and distributors. “Equilibrium will be restored once normalcy returns.”

Shibasish Sarkar, CEO, Reliance Entertainment, reveals that they have been approached by digital platforms for all their films, including Sooryavanshi, ’83, The Girl On The Train and Anurag Kashyap’s next. “But we, along with our directors and the creative team, are clear on a theatrical release and be patient for the next three to six months,” he says, but concedes that both sides are right, in that every filmmaker aspires to take their film to the big screen, but given the current scenario, most are under a lot of financial stress. “At the same time, the theatre owners are also bleeding, so it natural for them to be disappointed. Ultimately, the ecosystem has to survive. But the tone of appeal is important, there has to be some warmth in every discussion. Both OTT and cinema halls will co-exist in the longer run.’

Akshaye Rathi, theatre owner, argues that exhibition and production are two sides of the same coin and it is critical that the sectors engage in dialogue before taking any action. “The least we can expect is the courtesy of getting a call given our long-standing relationship. Dream Girl and Bala did a business of Rs 100 crore theatrically, so in Gulabo Sitabo, the exhibitors would have been a solid stakeholder,” he avers, confident that Sooryavanshi, ’83 and Radhe will wait to come to the cinemas so people can enjoy an outing. “Some films are meant for big screen consumption. For instance, you wouldn’t enjoy a horror film on the small screen as the ambiance enhances the experience.”

Tanuj Garg, producer of Neerja and Tumhari Sulu, informs that seven-10 films due for release this year will have straight-to-digital premieres. “If these platforms record disproportionate subscriptions and viewership, this could well open the floodgates for more commissioning and acquisition of OTT movies, thereby creating a parallel economy in itself,” he reasons, but at the same time doesn’t think cinemas will or can disappear. “No one is denying the power of the big screen experience. But I see no issue with the digital medium emerging as a credible alternative to its cinematic counterpart. It just means that we’re going to have a lot more movies, and therefore a lot more new stories and new talent in our midst.”

Mohua Das (THE TIMES OF INDIA; May 10, 2020)

Theaters faded to black and movies vanished from the box office as the Coronavirus turned into a massive speed bump for the burgeoning movie exhibition industry of nearly 9,600 screens in the country. After all, cinema houses are about large numbers of people huddled together, just inches away from each other.

“The pandemic has left a massive impact on the cinema exhibition industry. Movie releases are deferred, operations are shut, inflow of cash has entirely stopped. The industry has faced various crises in its history, but what it is going through was not envisaged,” said Alok Tandon, CEO, Inox Leisure, a multiplex chain with screens across 68 cities.

“Movie theatres were one of the first public spaces to shut with no visibility on when we might reopen. Most multiplexes were on a growth trajectory with funds deployed in new multiplexes which have all come to a sudden halt,” rued Sanjeev Bijli, joint managing director, PVR Cinemas.

The Multiplex Association of India (MAI), that represents around 90% of the multiplex industry in India, made an appeal to landlords in March asking for a “complete waiver from payment of rent & common area maintenance dues during the lockdown and recuperating period,” while multiplexes like Inox and PVR have already invoked the force majeure clause to their developers, to tide over the pandemic. In another plea last week, MAI urged studios, producers and content creators to respect “exclusive theatrical window” — holding and releasing their films in theatres, once they open again before opting for broader distribution, such as release on DVD, satellite channels or streaming platforms.

“This temporary relief would ensure that the cinema industry does not die an instant death leaving a significant impact on shopping malls across the country, millions of lost jobs and unwanted litigation,” explained Deepak Asher, president of MAI.

The challenge is trickier for single screen theatres that have been battling depleting revenues for years. Nitin Datar of Cinema Owners & Exhibitors Association of India (COEAI) wrote to the chief minister’s office last week appealing for “waiver on property tax” and “sharing of 70% of staff salary” to prevent retrenchment.

But even as the movie theatre business cracks under the pressure of uncertainty — with revenues of at least Rs 1,500 crore a month plummeting to zero — movie operators believe that the charm of a larger-than-life screen and people’s desire to step out will remain intact.

If history is anything to go by, many a thing has threatened movie theatres in the past — the 1918 Spanish flu, war-time restrictions, invention of television, VCRs, the Internet, and more recently the streaming platforms — yet, like a phoenix, the big screen has always found its way to rise and cope. “Because it’s integral to our social fabric,” pointed out Bijli.

Preparing to re-emerge in a world where physical distancing is crucial to survival, both multiplexes and standalone theatres are devising a chapter that will be different from what was built as a communal experience.

Apart from thermo-guns, sanitiser stations, hygiene kits, paperless transactions, and rigorous disinfecting procedures everyday, multiplexes like Inox and PVR will introduce seat distancing through “cross-allocation” of seats. “The model ensures that there’d be no one seated behind, ahead, or adjacent to the seat assigned to a guest. Online booking will be programmed to allocate seats in that order. Movie shows would be scheduled in a manner to avoid overlap of entry, intermissions and exits and to avoid crowding of lobbies and restrooms,” explained Tandon.

“The menu will be truncated to ‘hero’ items — popcorn, cola and nachos, that can be machine dispensed,” said Bijli, adding that “although it is difficult to contemplate the future, it’s reassuring when we look at China, Sweden, Korea and America that recently re-opened a limited number of theatres. We’re in touch with the Global Cinema Federation and trying to set protocols according to their standards.”

Apart from assuring seat distancing in standalone cinemas, COEAI has also urged the government for an interest-free loan of Rs 50,000 for each owner of ‘touring talkies’ — a dwindling exhibition culture of travelling theatres in rural areas — that now fears total extinction under the weight of the virus.