When French cinematographers Auguste and Louis, famously known as the Lumière brothers, first came to India to showcase their films at Bombay’s Watson Hotel on July 7, 1896, it was called the “miracle of the century”. For ₹1 a ticket, a rapt audience was suddenly transported to the magical world of motion pictures, where they could watch trains move and waves soar.

A lot has changed since then. Motion pictures have become bigger and grander. Heroes have turned into superheroes. And Indian movies have gone global. But the one thing that has not changed over time is the feeling of awe while watching a movie. Keeping that magic alive in movie-mad India today is the country’s largest multiplex operator PVR, founded by Ajay Bijli around two decades ago. Bijli wants people to feel the same thrill each time they watch a movie—as if they are going to the theatre for the first time. “Watching a movie is a suspension of disbelief. The moment people buy a ticket and come into the foyer, that’s when entertainment should start. I can’t be responsible for what happens on the screen. But I can be responsible for making the environment very exciting,” says Bijli, 51, who is often seen taking notes about seating, lights or sound whenever he watches a movie in a theatre. “I try to wear a different hat when I watch a movie in PVR. My family keeps reminding me to concentrate on the movie rather than the hall.”

Bijli has always been particular about his movie-watching experience. When he was younger, he would watch show after show at the family’s famous Priya theatre in Delhi’s tony Vasant Vihar neighbourhood. The family owned a trucking business, which Bijli inherited after his father’s death in 1992. (His surname, Bijli, comes from his grandfather Bijli Pehalwan, whose electric persona and energy in the rehabilitation of refugees during the Partition got him this nickname.) But his heart was always in cinema. Priya had gone to seed and reviving the cinema was his first big venture as a young entrepreneur. The B.Com graduate’s plans worked like a charm. By 1997, he had found a partner in Australian media and entertainment company Village Roadshow and started Priya Village Roadshow, or PVR, ushering in the era of the multiplex in India. “I sensed some gap between moviegoers and movie makers… I like to have very exacting standards for myself, then why shouldn’t others have it,” he says.

Gautam Dutta, CEO, PVR Cinemas
Gautam Dutta, CEO, PVR Cinemas
Image : Sanjay Rawat

That was 1997. Two decades later, Bijli has not just built a formidable business but also a brand almost synonymous with multiplexes. He has completely transformed the movie-going experience in India, which for decades was dominated by singles creen theatres. Along the way, PVR has faced competition from companies like DT Cinemas (which PVR later bought in 2016) and Mumbai-headquartered INOX Leisure. But the Gurugram-based PVR has continued to grow: From just four screens in 1997, it has 741 screens across the country today. PVR’s growth has been impressive: Its revenue rose over 70% to ₹2,365.45 crore in FY18 from ₹1,377.98 crore in FY14 and operating profit has jumped more than 90% to ₹431.86 crore from ₹226.20 crore during this period, according to Capitaline data. “Today, if any advertiser wants to look at pan-India advertising in this space, the only player they can look upon is PVR. Because of its presence in the north, west, and south,” says Karan Taurani, vice president-research (media), Elara Capital.

You can copy PVR by getting the same carpet and the seating.You can duplicate the skin but you cannot duplicate a soul.”   
Gautam Dutta, CEO, PVR

Expanding its footprint is the result of a carefully crafted strategy of acquiring existing players in a market where opening a cinema isn’t easy because of the number of licences required. This year, it bought a majority stake in SPI Cinemas, one of the largest cinema exhibitors in the south with a presence in Tamil Nadu, Telangana, Andhra Pradesh, Karnataka, and Kerala. Earlier, PVR acquired DT Cinemas and multiplex chain operator Cinemax which was strong in the western part of the country. “Unless you do that, how do you grow? It is a natural progression of a market. As the market becomes more and more mature, the smaller players find it more beneficial to sell off,” says Kamal Gianchandani, who heads strategy and business planning at PVR. And the company is also looking at Sri Lanka, Dubai, and the newly-opened Saudi Arabian market.

With such aggressive expansion, PVR graduated to the Fortune India 500 list from the Next 500 two years ago. But the world around the company, ranked 455 this year, is constantly changing. Film exhibitors are facing competition not just from within the industry but also from video-streaming platforms like Netflix, Hotstar, and Amazon Prime. Netflix is investing in India more than anywhere else in the world and has started producing original content in the country. According to a Boston Consulting Group study, the online streaming market in India could grow about 10 times to $5 billion in size by 2023.

So how does the cinema exhibitor maintain an edge in a competitive market and keep a fickle consumer hooked on to the joy of watching films on the big screen? I meet Bijli and his team to find out. I visit PVR’s corporate headquarters in Gurugram, and inside, it is a different world compared to the incessant traffic and chaos on the roads. The walls are lined with framed posters of classic Hollywood films—there is even a larger-than-life wall art depicting Bijli’s personal DVD collection. I ask Ajay’s brother and joint managing director of PVR, Sanjeev Kumar Bijli, if the rise of Netflix worries him. Without flinching, he says he binge-watches shows on Netflix himself. “I see it as an exciting challenge to have an ecosystem in which we’re living where there are many choices and you have to fight for the rupee and fight for your time,” he says. “We have been inundated with so much of competition over the years… But we have always survived because there is an innate, social need for people to go out and entertain themselves with a new release.”

Kamal Gianchandani, CEO, PVR Pictures
Kamal Gianchandani, CEO, PVR Pictures
Image : Photo Courtesy: PVR
Reports suggest that people who come to cinemas more often are the ones who are binge-watching on Netflix.”  
Kamal Gianchandani, CEO, PVR Pictures

Unfazed by the rise of digital, PVR is banking on India’s love for the big-screen experience. “There are movies like Baahubali, which you have to watch in cinemas, and because of this I don’t see the footfalls dropping [in theatres] because of digital as of now,” says Taurani. According to Gianchandani, also the CEO of the group’s distribution arm, PVR Pictures, it is important for cinemas to coexist with over-the-top (OTT) platforms. “Reports suggest that people who come to cinemas more often are the ones who are binge-watching on Netflix and the probability of them watching in cinemas is a lot more as they have an increased appetite for content,” he says.

PVR is perhaps looking at a more amicable resolution to all of this. Gianchandani talks of the possibility of PVR screening shows made for television or the Internet: “Many collaborations are possible. Cinemas could go into a subscription model where cinemas and OTT are bundled together. There are many permutations and combinations possible but cinemas are not going anywhere.” But OTT is just one form; the way people consume media and content has also changed drastically over the years. With smartphones in their hands and faster Internet speeds, consumers today don’t need to go to the theatre to watch a film. So firms like PVR have to experiment with technology to appeal to the young crowd. One such experiment is Vkaao, an on-demand theatre service, which allows users to create a screening session at a PVR cinema of their choice and select a date and time for the screening. Vkaao has a library of around 1,000 films, and PVR releases three-four niche films directly on Vkaao every month. All these experiments are aimed at fending off growing competition. “Our competition could be anyone—a food court, a hotel chain or the airline industry. We try to learn from across the spectrum. You can copy PVR by getting the same carpet and the seating. You can duplicate the skin but you cannot duplicate a soul,” says PVR CEO Gautam Dutta.

The competition is not sitting idle either. The Indian arm of Mexican exhibitor Cinepolis recently bought two prime properties of DT Cinemas in Delhi, taking its total screen count to 348 screens. The two were not part of the earlier deal with PVR. “India is an important market for us and it is our constant endeavour to upgrade the cinematic experience by bringing the latest technology and customer engagement into the industry,” says Javier Sotomayor, managing director, Cinépolis Asia.

Alok Tandon, CEO, INOX Leisure
Alok Tandon, CEO, INOX Leisure
Image : Photo Courtesy: INOX
Inox’s strategy is focussed on creating our multiplex locations as destinations welcoming all segments of customers.”  
Alok Tandon, CEO, INOX Leisure

PVR’s closest competitor INOX Leisure, with 542 screens, is inching closer both in terms of screen count and investor interest. INOX also plans to invest heavily in technology such as LED screens, laser projection, and IMAX. “Cinema exhibitors today face competition not just within the industry but also from new forms of entertainment like OTT, smart TVs, etc. In such a scenario, how does INOX make sure that it bites into the closing gap as well as ensure footfalls don’t dwindle with consumers now spoilt for entertainment choices on their smartphones,” says Alok Tandon, CEO, INOX Leisure. “INOX’s strategy is focussed on creating our multiplex locations as destinations welcoming all segments of customers who experience comfort, luxury as well as specially curated food and service.”

With competition closing in, how is PVR going to hold on to its position? “All our acquisitions have worked well with our location strategy. The first challenge after acquiring a property is to integrate it with the company culturally. We are not in too much of a rush to change things immediately,” adds PVR CFO Nitin Sood.

What PVR and its competitors are probably banking on is the immense opportunity in India. According to a CRISIL report, the U.S. has 125 screens per million people and China has 16, but India has just nine. Lured by this potential, PVR also moved into distribution with PVR Pictures that was launched in 2000 with Oscar-winning musical drama Chicago. Today, it is a full-fledged distribution company that doesn’t just deal in Hollywood films but also in Bollywood blockbusters. Shah Rukh Khan-starrer Zero is the latest big film for PVR Pictures which clocked a standalone revenue of ₹80 crore in the last financial year. “We realised that smaller, independent Hollywood films were not coming to India as those producers don’t have their own distribution network here,” said Gianchandani. Even with so much happening in the industry, the Bijli brothers are calm. The only thing they worry about is complacency. “We’re not sitting on our laurels. There’s miles to go before we sleep,” Sanjeev Bijli says with a smile.

(This story appeared in the December-March Fortune India 500 quarterly special issue.)

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