How PVR INOX Hopes To Boost Indian Cinemas With FOCO Models

India’s largest movie chain, PVR INOX has big plans for the country’s movie buffs – in a country as large as this one, the company hopes to get multiplex movie theatres closer to every corner. In its process of expansion, PVR INOX also hopes to earn profits with Franchise Owned Company Operated (FOCO) model in cinemas. In this exclusive interview, PVR INOX Ltd. CEO (Growth & Investment) Pramod Arora explains the basics of how the new model will work for partners and what benefit it brings for Indian cinema lovers.

PVR INOX: The FOCO model

The company has been working on the model for three years. It has been more than a year since the first cinema under the model was inaugurated in the Indian state of Madhya Pradesh in Gwalior. Arora insists that they wanted to play down the first few cinemas to ensure success of the model before announcing it. He confirms that another one may soon come up somewhere in Northeastern part of India as well as one in Mumbai.

PVR INOX offers social hubs under FOCO model

Arora suggests that the idea of spreading wings across a country like India hit roadblocks because “It’s impossible (for a single company to do so). Just financial support cannot make it happen. India is a country that has a huge box office turn-out. Hollywood films contribute only eight percent of the total, the rest 92% of the box office collections come from regional, local and hyper-local and Bollywood content.” Getting to tier two and tier three cities will help PVR INOX further the popularity of regional content, he adds.

Arora says the new “social hubs” that will come up under FOCO model will offer people spaces to enjoy food or games, as well as movies. “It may not necessarily be just movies. This is a completely evolved model, not a cinema from yesteryears. It is a complete social hub wherein people can come in, have their food, do some gaming and just go back. They may not even watch a film. People may come in, do all the three things or just make a selection.”

Arora adds that the company aims at creating affordable luxury for the people, especially the youth. “They should get aspirational product when they choose to spend money on something like entertainment. We are going to make the best of cinema in India, for Indians. That qualifier remains constant irrespective of whether it is a FOCO model we are talking, or one of our regular ones. It is a discretionary spend and customer must get the best.”

He then goes on to explain that prospective partners must be ready to pay for the technical, manpower, safety and security measures that PVR INOX follows. He adds that partners will finance and the FOCO model cinemas while PVR INOX will design, develop and operate them.

Criteria for the partnership with PVR INOX

Arora insists that PVR INOX will strictly adhere to all safety, security, and operating measures around the brand for the new cinemas to be able to cater to the consumer perfectly. Right from the origin of the finances involved to basics like legal validity of the ownership of the space and standard of devices for the cinema, everything matters.

” The selection rate (for partners of FOCO model cinemas) stands at 20 percent right now. All the consumer and financial matrices have to align while deciding this model, therefore the selection rate is low. We have leveraged enough intellect to be harnessed into a black box for us to come up with this model which can help the cinema industry. We have certain compliances that the digital cinema initiative across the world has specified – such as the projection and audio systems. Similarly, other things in terms of technology, manpower and safety and security… the complete infrastructure (needs to be in compliance). We also hope to use insights from our partners to work around the consumer journeys that we want to create in these cinemas.”

Challenges of FOCO in cinemas

Asked about challenges that came on the way to creating cinemas on FOCO model, Arora says, “Creating a team was a challenge in itself when we began working on it three years ago. It needed a completely different mindset. It was a challenge to create the belief system – would people believe in this model? People do not talk about cinemas being franchised. We had to find logical answers and create rational behaviors. I believe most of the challenges have been taken care of. I’m sure there are many, many more which are going to come up. We do not claim it is an error free, problem free, challenge free model. It cannot be.”

Cinema Ticket fares in India

For the past few months, Indian cinemas are introducing various kinds of discounts and offers on ticket prices. Every few weeks, one ticket is offered free on the purchase of one; and there are times when tickets are sold for $1. Sometimes, it is a movie theatre chain offering these, and even the producers offer these at times. Prodded about the strategy for ticket fares, Arora says it is like a trial mode for the industry and will eventually decide a bar for industry-wide ticket fares in the country.

PVR INOX releases this month

Karan Sharma’s Bhool Chuk Maaf is set for a theatrical release on May 9. Sooraj Pancholi’s Kesari Veer and Suswagatham Khushaamadeed featuring Katrina Kaif’s sister Isabelle Kaif will will hit theatres on May 16. The horror film Kapkapii is slated for a May 23 release.

Apart from the fresh releases, PVR INOX has scheduled a few re-releases for the month of May. These include fan-favorite Shoojit Sircar’s Piku featuring Bollywood stars Deepika Padukone, Amitabh Bachchan and late Irrfan. Piku is set for a May 9 release. Paul Thomas Anderson’s There Will Be Blood will also release this Friday. Saif Ali Khan-starrer Hum Tum will re-release in PVR INOX cinemas on May 16 and Suniel Shetty-Akshay Kumar-Shilpa Shetty-starrer Dhadkan will hit theatres on May 23.

(This conversation has been edited and condensed for clarity.)