Businesswise, we are hopping across boundaries of the box: PVR CEO and MD

Ajay Bijli, chairman and managing director, PVR Ltd, and Gautam Dutta, CEO of PVR Ltd
Among the last to be allowed to resume business (that too partially) after months of restrictions, Indian cinemas had to close their doors again as the second wave of Covid struck. Ajay Bijli, chairman and managing director, PVR Ltd, and Gautam Dutta, CEO of PVR Ltd, tell

 

After the first lockdown lifted, you were repeatedly asking for cinemas to be allowed to open and then for capacity to be increased. This time the messaging from you is quite different.

 

Ajay Bijli: This virus is something that likes human interaction; that’s how it spreads. And because we are a business that congregates people, we are one of the most affected industries. It’s not a good sign at all to be shut for so many months. No business can look good if you have zero revenues. So, it has been devastating from that point of view. But I still believe in the long run of the cinema business. And as Gautam has very nicely articulated in a message that we are sending out to everybody: “For the show called life to continue, this intermission is a must.”

 

After the first lockdown, our outreach was aggressive. Then we took a pause because the second wave became a very reflective and introspective phase. It didn’t seem right to start talking about entertainment when people and hospitals were overwhelmed.

 

Now again we are starting to reach out, but not by saying “come to the movies”. We all have to become more compassionate and give the right messages, which are relevant at this particular time. So our outreach is going to be on those lines – for example, “our doors are shut but our hearts are open”. And when the time comes and movies get announced, we’ll be here – that’s not a big deal for a company that has been doing entertainment for the last 30 years.

 

So, you are optimistic about the future of the business?

 

Bijli: Yes, and there are two or three factors that keep us optimistic. One, that the Indian market considers movie-going as the Number 1 form of entertainment. We got a small glimpse of this when we opened from October 15 (2020) to March 15 (2021). Movies such as “Master” that released during this period did very well even with depressed and controlled capacities.

 

Staying locked up does not come naturally to people, no matter how big your home. That is the No 1 thing that is making us confident.

 

The second is that we in India have a lot of movies that come out every year – some 1,800. So, cinema will bounce back. It always does.

 

Does that mean the threat of OTT gaining at the cost of theatre isn’t really there?

 

Bijli: OTT versus going to the movies is comparable to “utilitarian versus experiential”; like eating out of a microwave versus going to a restaurant. The film fraternity continues to believe in the theatrical business – not just for nostalgic and emotional reasons but also for economic ones; 60 to 70 per cent revenue of any content that is created comes from theatre.

 

The film fraternity has been very supportive; and we’ve also been very understanding with them. I mean if my shop is shut, then how can I stop them from selling their movie to OTT? So if they sold it, they sold it. But I know for a fact that a lot of movies are lined up, both Indian and international (for when the cinemas open).

 

There are also positive indicators coming from countries where cinemas are opening up. I was talking to somebody who runs a streaming platform in England. Because England has recently opened up, all of a sudden the number of his subscriptions has come down.

 

 The industry is bleeding. How could things have been helped?

 

Bijli: In this difficult period the only thing that would have helped was if we had got some government support. We made many representations to the government, yet no relief has come. This is the only thing that bothers because the government is also a stakeholder – after all, every ticket we sell has a GST on it. This one stakeholder could have done something for the industry. Be that as it may, we have still tried to keep our chin up. There is, however, one way the government can help, if not directly: by vaccinating at a faster pace. That is very critical. Do it for the sake of humanity.

 

The bulk of our customers is in the 12 to 39 age group – they also should be vaccinated. We ourselves are doing our best within what all is available, legitimately, to get our people (some 6,700 employees) and their families vaccinated.

 

In this period of zero business from cinema, how do you keep the show going?

 

Gautam Dutta: We looked within for business ideas to keep the wheels rolling. We innovated around food and launched PVR microwave popcorn that is selling like hot cakes today. We have also set up a core team to look at businesses like merchandise that can go online. Another venture we launched is Café V to deliver food to homes through cloud kitchens. We are also looking at alternative content stories within cinemas. In short, we are hopping across the boundaries of the box to see how PVR can leverage its position of strength from here on.

 

What about overhead expenses such as rental?

 

Bijli: I am happy to say that we got rental relief from more than 95 per cent of the developers, who realise PVR is a good tenant.

 

We are a listed company, so we also had to keep our heads up and keep talking to our investors. We were able to do a rights issue of Rs 300 crore – a testimony to the belief in our company. We were also able to do a QIP of Rs 800 crore later on. A huge chunk of investors came in. And we were able to raise debt. All this in a shut business is not easy to achieve when everybody is only talking OTT.

 

 What have been the lessons during this period?

 

Dutta: This lockdown has helped us look within – to assess where we need to be and what we need to create. One realisation was that we need a robust communication system within PVR, drilling down about 10 levels.

 

During this trying time, we needed to make sure that everyone was communicating and reaching out if they had a problem, say, about food, money, medical bills, hospital beds, oxygen, anything. All you needed to do was call your cinema manager and she was given a hotline number to a call centre through which we had done numerous corporate tie-ups for various facilities. Several lives could be saved that way. The teams helped quietly.

 

What challenges did you face in the process?

However much (seniors in) the organisation tell the employees to call if they need anything, they don’t call. We realised the pivot points remain only two people: those that work under you or those you report into. So we made a structure, a kind of a circle within cinemas, with cinema managers, head of HR, duty manager and duty officer. They were the cluster heads and they would manage a team of 60-200 people to ensure that everyone was in touch and communicating. Once that was done, the second part was about empowering: Telling section heads that whatever and however much is required, please go ahead and spend; there will be no assigned budget (for immediately necessary services). For instance, we have tied up with a caterer who is supplying to any family that needs food; we have had Unicef-validated videos by doctors, ambulance services, and so on. We just kept harping on one thing: Inform us, let us know. Today, 100 per cent of our cinema staff is vaccinated. Each cinema manager is taking personal pride in this mission.

 

 What next?

 

Bijli: I only have one thing to insist on and it has nothing to do with PVR, that vaccination must happen at a very fast pace. Once people get their confidence, their mojo back, cinema too will bounce back. Cinema has always been resilient.



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