PVR woos Netflix n Chill crowd back to big screens with its Passport

• PVR INOX Passport allows users to watch 10 movies/month on weekdays for ₹699, consumers can watch.
• It’s targeted towards senior citizens, housewives and more importantly students and youngsters.
• Passport can energize weekday theater occupancies and improve F&B sales, say analysts

How many people watch ten movies a month? Not even in the hay days, when movies were a key source of entertainment. Now, at a time when theaters are struggling with occupancies and footfalls, India’s largest multiplex chain has brought out its PVR INOX Passport. For ₹699, consumers can watch 10 movies in a month on weekdays but without access to its IMAX, Gold, LUXE and Director's Cut services.

Even as the movie industry saw post-pandemic successes with RRR, Pathan, Pushpa and Rocky and Rani Ki Prem Kahani, occupancies haven’t yet hit pre-Covid levels. Now, PVR is hopeful that with this limited period offer, they can bring back some of those who have lost the habit of watching movies on the screen.

“The three significant target groups we are focusing on are students, housewives, and senior citizens, where we believe lies a great opportunity. We expect this innovative offering will not only revitalize weekday cinema attendance but also introduce a new dimension to how our patrons interact with and enjoy the world of cinema,” said Gautam Dutta, co-CEO of PVR INOX.

The big screens are being hurt by OTT’s weekly and monthly launches of shows and direct-to-OTT movies. Moreover, GenZs with mobiles and easy data access, find little allure of watching movies in a size larger than life.

Unlimited OTTs plus limited theatrical releases

PVR is trying to build a habit of making movie watching a social outing that it has been for generations before. OTTs have also upped their ante during the pandemic and has brought back movie loving public into its fold. The time lag between a theatrical release and their satellite/OTT debuts have come down drastically. In some cases, it’s a matter of a few weeks.

Added to that, a few superstar-starring, much awaited movies are going directly to OTTs. Case in point – Knives Out ‘Glass Onion’ starring Daniel Craig had a ‘limited’ release before it hit Netflix. Even Martin Scorsese planned the same for his ‘Killers of the Flower Moon’ but canceled it. There are more examples closer home too.

One of Bollywood’s most-awaited debuts with three star kids directed by Zoya Akhtar is The Archies. The off-beat movie starring Shah Rukh Khan’s daughter Suhana Khan, Amitabh Bachchan’s grandson Agastya Nanda, and late actress Sridevi’s daughter Khushi Kapoor, is coming to Netflix.

More reason for the young to subscribe to Netflix and chill, instead of making a movie date. “This move may eventually bring the youth back to the cinemas, which will be a big positive structural trigger. The only ponderable is if lower pricing or good content would be the decider to usher in this change,” says Karan Taurani, research analyst at Elara Capital in a note on the offer.

Without the price-barrier

If there ever was a good way to bring back young people to try something, price reduction is the way to go. Many apps and new-age businesses are built on this theory. PVR’s Passport plan however does zero or no damage to their economics.

As per Elara’s calculations, pan-India, annual average occupancy for exhibitors for weekdays (Monday-Thursday) is around 17%. Discounted ticket prices may prop occupancy towards 20-25% it believes.

“Increased occupancy may not come at any incremental costs and may drive better F&B and ad revenue which is high-margin in nature,” Taurani adds.

The Passport offer which is not available in the South of India, is also limited in nature. Only 20,000 of these passes are available. The idea behind it is not merely to boost weekday occupancy, claims PVR.

“With the Passport, we have sought to break the barriers of cost and allow our newer audiences to immerse themselves in a wide array of movies across diverse genres. We expect this innovative offering will not only revitalize weekday cinema attendance but also introduce a new dimension to how our patrons interact with and enjoy the world of cinema,” said Dutta.

Small vs Big

Apart from limited releases, a lot of quaint small movies, whose surprise performance vitalized box offices are also missing. These are the movies that are being swept off by OTTs and as per media reports, producers and distributors are also getting tight-fisted with marketing spends.

Taurani says that theaters’ dependence on large-budget films increased to around 85% in Hindi Box Office (BO) which is a structural risk. If there is an option to watch ‘many movies’ with a prepaid option, the small movies which are hitherto undiscovered can get a boost.

“It's about making every visit to the cinema an opportunity to discover something new, to be entertained, and to be captivated by the magic of storytelling on the big screen, even with the smaller films,” said Dutta.

Be it big or small, a movie on a big screen is always an experience. Whether the younger generation who is reportedly more keen on experiences than anything will subscribe to it, is yet to be seen.

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$PVRINOX.NSE TechnoFunda Analysis - Fundamental view - PVR, led by MD Mr. Ajay Bijli, showed resilience during the pandemic, acquiring INOX in 2023, expanding to 1650 screens in 110+ cities. As the Indian economy reopens, the cinema industry is thriving with blockbuster releases. In FY 2024, PVR INOX aims to capitalize on star-studded films and PVR Passport subscription. Technical view - Similarly, PVR INOX's stock is looking interesting. The stocks has experienced a reversal after a false all-time high breakout. It has found strong support within the range of 1450 to 1550 levels. This range aligns with a long-term trendline that the stock has been respecting for a long time. Furthermore, these levels correspond with the Fibonacci 0.5 retracement level enhancing the likelihood of a reversal. PVR INOX can be bought at CMP 1607 with a stop-loss set at 1220 on a weekly closing basis. The stock could move towards levels of 1870 and 2445 over a 12-18 months periods

— (@ArthaCapital) November 01, 2023