ABOUT PVR PVR (Priya Village Roadshow) Cinemas is one of the largest cinema chains in India.

The company, which began as a joint venture agreement between P riya Exhibitors Private Limited and Village Roadshow Limited, began its commercial operations in June 1997 with the launch of PVR Anupam in Saket, India's first multiplex. By introducing the multiplex concept in India, PVR Cinemas brought in a whole new paradigm shift to the cinema viewi g experience: high n class seating, state-of-the-art screens and audio-visual systems. As of 2009, PVR had a total of 106 screens in 26 multiplexes across India. PVR commands a significant presence in New Delhi and NCR with 37 screens in 13 multiplexes. PVR also has a strong presence in Lucknow, Indore, Hyderabad, and Bangalore. It is expanding to other parts of the country, especially in Mumbai with openings of PVR Juhu, where there are many other established multiplex. PVR recently launched its premium brand, PVR Premiere, targeted at urban consumers in metros, with the opening of PVR Select Citywalk. The company operates two other brands, PVR Talkies, the no-frills cinemas for consumers in tier II cities and the original PVR Cinemas targeted at the urban & semi-urban consumers. PVR additionally plans to invest Rs 300-400 crore to open 250 screens by 2010. PVR is a brand name synonymous with state-of-the-art cinema exhibition in India. PVR specializes in developing and operating state-of-the-art Multiplexes. PVR Cinemas are the leading cinemas in the country with an emphasis on design, technology and service. Ove the last three r years, PVR has established itself as a very strong brand associated with movies, quality exhibition and youth-targeted promotions. The company was conceived as a Joint Venture between the Bijli family, headed by Mr. Ajjay Bijli as Indian Promoters and Village Roadshow Limited of Australia, one of the largest multiplex operators in the world with more than 1500 screens under operation.

Coimbatore. stadium styled high back seating with cup holder arm-rests. will continue its expansion into places like Jodhpur. a selection of Hindi. construct and operate the prestigious multiplex in Goa that hosts the International Film Festival of India. TAAL Multiplexer 2006 and Emerging Superbrand of the year 2006 ± 2007 Award. All INOX cinemas have state of the art facilities in terms of modern projection and acoustic systems. varied theatre food. etc. With strong financial backing. Winner of the µICICI Entertainment Retailer of the Year¶ Award 2005. Vishakhapatnam. INOX currently operates 30 multiplexes and 109 screens in 21 cities making it a truly pan-Indian multiplex chain. Bhopal. Hubli. Bhuvaneshwar. has given INOX access to an additional 9 multiplexes in West Bengal and Assam. impeccable track record and strong corporate ethos. Mangalore. in every aspect ri ht from the quality and choice of cinema to the varied services offered and eventually the hi hest market share Indian Multiplex Industry INOX has traversed its own path by bringing in a professional and service oriented approach to the cinema exhibition sector. . Its merger with CC L (89 Cinemas). interiors of international standards. English and regional movies.AB T IN X LEIS E LTD INOX Lei e Li ited i t e di ersi i ti vent re of t e INOX Group into entert inment and is a subsidiary of Gujarat Flurochemicals Ltd. INOX has established a strong presence in the cinema exhibition industry in the short span of a little over six years since the opening of its first multiplex. Ahmedabad. computeri ed ticketing and most importantly high service standards upheld by a young and vibrant team. INOX was also chosen post a nationwide tender to design. Kanpur. high levels of hygiene. INOX Leisure¶s mission is to be the leader in the cinema exhibition industry. INOX Leisure Ltd.

It has a diversified presence thus it caters to all segments of movie goers. According to the research Multiplex owner has conducted. Westerner 3. PVR offers variety for all segments of consumers     PVR general screens ±middle market audience PVR premiere screens ± upper middle market and premiere segment PVR Gold Class ±hi-end and premiere segment PVR Talkies ±value conscious market in tier 2 cities INOX currently operates in 109 screens and 30 multiplexes. in 21 cities. It also has lower rates during mornings to accommodate the price conscious market. Groucho 2. the come up with three categories signifies different groups of people and their behaviour which plays a very important role in making decisions. PVR has a total of 106 screens in 26 multiplexes and is in around 18 cities.TARGET MARKET As of 2009. They are explained in the following ways: 1. although mainly the middle class segment. Geeks .

Come late to movies at least by 15 minutes. Prefer to watch with spouse and children. war Dubbed English movies either alone or with friends Enters 5 minutes late in the movie hall. Prefer to watch movie with family and children. Age group is of 15 ± 24 yrs .Groucho: y y y y y y This group consist of 32% of Mumbai audience (Premium grp. prefer suspense. For Hindi. Age grp.) They visit the cinema halls occasionally (once¶ in 3 month) Prefer to watch Hindi Thriller movies and also Regional movies. animation. Come 10 minute late to movie hall. Westerner: y y y y y y y y This group consist of 5 % of Mumbai population residing in western part of the city. 25 ± 44 yr. Visit cinema hall frequently (Once in a month) Prefer to watch hindi action. Visit cinema hall regularly (Once per week) Prefer to watch English movies as action. Age group is 35 ± 55 yr. Geeks: y y y y y This group consist of 27 % of the population from other part of the city.

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with Delhi and Haryana accounting for 78% of its total cinema seating capacity followed by Banglore (22%). Banglore and Kolkata. food and beverages and advertisement.THE COMPARISON Extensive Reach: Earlier PVR Cinemas was largely concentrated in the Northern parts of India. it intends to set up multiplexes in Indore. With penetration in Tier 1 cities having increased considerably. if one were to compare the profitability. During the period FY03 to FY06 total revenues of Inox had increased by a CAGR of 88% whereas that of PVR Cinemas had grown by a CAGR of 40%. On comparing these two companies on financial parameters. the growth for PVR Cinemas has been 40% and 42% respectively. Further. As seen from the adjacent chart. It remains to be seen who will be able to garner a larger share of these markets. Inox revenues are growing on account of economies of scale. Inox had a slightly higher 71% of its revenues coming from ticketing in FY05. The company is having an edge over local competition in accessing content. Goa. Delhi and Haryana's contribution to total seating capacity fell to 60% of its total cinema seating capacity and Mumbai and other states emerged as new markets. their contribution to the topline of each company is in varying proportions. Inox Leisure scores over PVR Cinemas. While ticketing accounted for 64% of PVR's revenues in FY05 and 68% in FY06. Mumbai. INOX already has a more diversified presence with screens in Jaipur. while EBIDTA margins for Inox Leisure have moved in a range of 29% to 34% during FY03 to FY06. On the other hand. Advertisement revenues as a percentage of total revenues at 5% were much lower for Inox as compared to 13% for PVR. Break up of Inox's revenues for FY06 is however not available. the same . sale of tickets. while Inox Leisure has grown revenues and net profits compounded rates of 88% and 482% during the period FY03 to FY06. both these player have now set their eyes on the Tier 2 cities. Food. Chennai. Lucknow and many more places in the country. In FY06. But now the scenario seems to be changing. Hyderabad. However. the next largest contributor accounted for 21% and 17% of PVR's and Inox's topline respectively in FY05. The company is planning to establish further new cinemas and new screens across the country. However. If we compare the revenue segment of both the companies then we will observe that the revenue segment of Inox is growing at a faster speed as compare to the PVR Cinemas. It is among the few players to establish a national presence at such an early phase. Pune. Business Mix: Both the companies earn their revenues from three major sources vi .

PVR Cinemas and Inox Leisure are trading at price to earnings multiples of 106 times and 56 times their FY06 earnings respectively. the industry is a high fixed cost industry and hence the kind of funding both the companies will utilise for their expansion plans is likely to decide who will emerge as a winner. Comparative valuations At their respective current prices of Rs 243 and Rs 163. POINTS OF PARITY y y y y y y y y The multiplexes offer a world class cinema experience One place where all genre of movies can be watched Quality of viewing is similar E ticketing services Tie ups with cola companies and various food stores Located in malls generally Venturing into film production Services like food delivered at the seat POINTS OF DIFFERENCE y y y y y y Tickets are priced higher in PVR PVR is more focused on premium segment ( Gold Class and Europa) The food offered in PVR is off a wider range and is more expensive PVR has various programmes like parties. corporate packages and Loyalty Schemes Inox offers more value for money movie viewing Inox covers more regions than PVR . As for now. Having said that.for PVR Cinemas have declined from 17% to just over 15% during this period. Scenario on the net profit margins front is no different with Inox's margins at 16% are far better than the 5% margin that PVR earned during FY06. near term expansion plans for Inox seem to be greater than its rival thus leading to better visibility. Inox seems to be trading at a discount to PVR. Inox seems to have an edge over its rival. Moreover. Despite its superior growth and better margins.

POSITIONING PVR PVR comes across as a superior brand in terms of cinema viewing as well as the experience. Every time. Its positioning is quite consistent with its brand.´ PVR offers and does just that. . It¶s positioning is evident in its mission statement also which says ³A commitment to deliver the best quality cinema viewing Every where. however it can take a few steps to become more evolved brand. offers a world class cinema experience though at premium prices. INOX Inox believes in making its customers ³Live the Movie´ by offering quality cinema viewing.

During evenings. Like the IMAX theatre that Adlabs has introduced. To add on to the excitement they could couple this with cricket contests and give pri es like paraphernalia with autographs of eminent sportspersons. PVR and Inox could do promotional campaigns and reduce the prices marginally for one show a day. example. A crucial India Pakistan match. The growing popularity of soccer and other sports can also be tapped. PVR and Inox could capitali e the same by screening matches live for eg. PVR and Inox should also foray into new technological advances in the entertainment business. World cup semi-finals/finals etc. Such promotions could happen once or twice a month without diluting the superior brand image. This would encourage more people to experience the PVR and Inox experience. We also feel that introduction of a food court that has a variety of offerings. For eg.S GGESTIONS Technological Innovations When PVR and Inox came into being they were at the forefront of the technology involved in the Movie business but now much more has been done in this field and they needs to keep up. A lot of audiences that were interviewed feel that the leg space in between the rows is less and it makes the audience uncomfortable after sometime. not just snacks but wholesome meals as well would greatly improve the movie going experience as people would spend greater amount of time in the theatre and the food court could work as an ancillary to the theatre. Once inside.Service must match the price charged Many of the audiences feel that some of the services inside do not command the prices that is charged for them. . even the first two rows in the theatre command a price of Rs. Most people feel that a lesser price should be charged as sitting too close to the screen is not as good an experience as sitting in one of the back rows. This would be an instant hit even at very high prices charged. 150/-. especially those that are inhibited by high prices. Riding high on sports Cricket is an obsession in India. Expanding reach Once a movie is past its prime and running in the second or third week where sales are low. Special promotional campaigns for students for instance could help in attracting the vast price sensitive student audience. Also the prices charged at the food and beverage counter are way above the MRP. which we feel is an undue premium that is being charged.

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