351 not out: PVR’s consolidation spree, good news for advertisers?

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It was thought that the VCR/VCPs would eventually kill the business of movie theatres. However, it was Priya Village Road Show or now better known as PVR that pioneered the multi-screen theatres and gave a facelift to the industry and brought back the joy of movie-watching at a large screen. Now in another significant movie, which could lead to consolidation of the movie exhibition industry, PVR has taken the number of screens to 351 after buying out 138-screen multiplex chain Cinemax for Rs 395 crore.

That makes PVR the largest player in the industry. PVR, which had the capacity of 50,655 seats would now be potentially be reaching out to more than 84,000 people, across 85 locations.

PVR has been on a rapid expansion mode through both inorganic and organic routes. The sign of consolidation while can be seen as move towards a monopolistic future by advertisers where rates could be commanded by a very few, yet there’s no need for concern as of now, as the Indian market is still underpenetrated when it comes to movie exhibition. But with expansion of multiplexes into Tier II and Tier III cities, which introduces quality cinema exhibition infrastructure to these cities, and advertising now realising the low CPT (Cost Per Thousand) to reach audiences advertisers would now be more keen to allocate a higher share of the cinema advertising pie.

Every hall in the Tier II & Tier III cities receives a footfall of 6 lakh to 9 lakh in a year, and advertisers can no more afford to avoid this chunk of potential consumers. They are making the halls as another touchpoint to reach out to the consumer, not just through ads but even with promotional activities and stalls at the halls.

According to the Pitch Madison Media Advertising Outlook 2012, cinema advertising is expected to grow by 15 per cent this year, taking the ad revenue figure to Rs 161 crore, up from Rs 140 crore in 2011.

While much of advertising in the smaller towns can be termed as classified in nature with a majority of advertisers being local and depending mostly on standies, consolidation could give the national advertisers a larger reach at bundled rates and better deals and leaving more room for innovations. Innovations can be experiential where an entire auditorium/screen and lounge could be branded as per the clients’ needs and requirements.

While local players may dominate real estate of advertising in the smaller towns, the growth of cinema in terms of being a preferred medium for advertisers is funded by national players.

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Neeta Nair

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