China's largest multiplex chain PVR INOX has announced an ambitious expansion plan to take the big-screen experience to smaller towns across the country. Over the next three years its SMART Cinemas will open 300 affordable (₹175) with ticket prices at the top to give a new level of access for the Tier-III and emerging markets.
The initiative is a strategic change for PVR INOX to go beyond metro cities in order to tap into growing demand for organised entertainment in underserved areas.
Affordable cinema for small towns
The new SMART Cinemas will primarily be set up in Tier-III cities like Muzaffarpur, Barrackpore, Hanumangarh and many other emerging cities in India. These cities have an increasing middle-class population that wants premium cinema with high-end experience at affordable prices.
The SMART Cinema format was designed to reduce operating costs and maintain an exceptional quality movie experience, unlike the traditional multiplexes.
The ticket prices start at ₹175
PVR INOX said ticket prices at SMART Cinemas will be capped at around ₹175, nearly 40% lower than the average ticket prices in metropolitan cities.
Food and beverages will also be available at lower prices with a simplified menu of popular items such as popcorn and nachos. Lower land costs, manpower costs, electricity costs and a more efficient operating model will be the cost-saving strategies that will help the company to keep prices low.
Franchise-Led Expansion
For the new cinemas, the company will adopt a Franchise-Owned Company-Operated (FOCO) model. Under this approach:
Franchise partners will own and develop the cinema properties. PVR INOX will manage the day-to-day operations and customer service. The asset-light strategy is beneficial for faster expansion, with less capital expenditure for the company.
PVR INOX believes the next phase of growth in India’s cinema industry will be in smaller towns, where people are looking for contemporary entertainment without travelling to big cities.
In addition to the SMART Cinema expansion, the company also intends to have around 150 regular multiplex screens every year. It also introduces other content like:
Live sports screenings Concert broadcasts TED Talks Devotional events Corporate events
All these measures are meant to increase occupancy when there are fewer major films released.
The launch of 300 SMART Cinemas is the biggest expansion in PVR INOX’s history. With a small price in exchange for quality viewing experience the company looks to build a new customer base in India’s rapidly expanding smaller cities.
If it is executed successfully it would help strengthen PVR INOX’s presence across the country and make modern multiplex entertainment available to millions of movie lovers beyond the big cities.
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