He joined the company in 2001 when it was poised for the typical big leap. Today, PVR Cinemas is one of the largest cinema chains in India, yet not the largest. Nitin Sood, CFO, PVR Cinemas tells B&E, what it took to reach here and what it would be like ten years later by Amir Moin
B&E: How has the exhibition business evolved in the past ten years or so?
NS: The single most important and the most revolutionary evolution has been the introduction of the multiplex. About 8-10 years ago, there were in general only single screen cinemas. If you look globally, 75% of all cinemas are multiplexes; in India, the number is completely opposite. We have only 10-15% multiplexes compared to 85-90% single screen cinemas. So the industry is evolving in such a manner that people are gradually realising that single screen is a dead model to operate with. Multiplex offers a variety of choice therefore further evolution that takes place will also be the ‘multiplex-isation’ of single screen cinemas.
B&E: There are issues in every industry that hinder growth. What are the challenges for your industry?
NS: I think the biggest challenge has been the regulatory issue. The industry is being plagued by different state tax laws. Different state governments have a different take on how they want to promote cinema and entertainment. That I think is the biggest challenge. The recent amendments that have been introduced on transfer of copyrights is also another challenge. According to this amendment, service tax would be levied on transfer of copyrights. This already comes under the purview of state level VAT laws. Now, the central government is saying that state governments will levy VAT and service tax on the same transaction. However, if the GST gets implemented, we would be able to work on a much more uniform structure. That, I think is the biggest change that this industry should foresee.
B&E: Do you think global companies would be setting base in India?
NS: That would be happening but the size and scale of the Indian movie exhibition industry is too small for global giants right now.
B&E: Does this business have potential to give you a Fortune 500 status?
NS: It definitely has the potential, but the size and scale to reach a Fortune 500 status will take a lot of time. From that perspective, India and exhibition alone would not make a Fortune 500 recipe. It is a very capital intensive business.
NS: The single most important and the most revolutionary evolution has been the introduction of the multiplex. About 8-10 years ago, there were in general only single screen cinemas. If you look globally, 75% of all cinemas are multiplexes; in India, the number is completely opposite. We have only 10-15% multiplexes compared to 85-90% single screen cinemas. So the industry is evolving in such a manner that people are gradually realising that single screen is a dead model to operate with. Multiplex offers a variety of choice therefore further evolution that takes place will also be the ‘multiplex-isation’ of single screen cinemas.
B&E: There are issues in every industry that hinder growth. What are the challenges for your industry?
NS: I think the biggest challenge has been the regulatory issue. The industry is being plagued by different state tax laws. Different state governments have a different take on how they want to promote cinema and entertainment. That I think is the biggest challenge. The recent amendments that have been introduced on transfer of copyrights is also another challenge. According to this amendment, service tax would be levied on transfer of copyrights. This already comes under the purview of state level VAT laws. Now, the central government is saying that state governments will levy VAT and service tax on the same transaction. However, if the GST gets implemented, we would be able to work on a much more uniform structure. That, I think is the biggest change that this industry should foresee.
B&E: Do you think global companies would be setting base in India?
NS: That would be happening but the size and scale of the Indian movie exhibition industry is too small for global giants right now.
B&E: Does this business have potential to give you a Fortune 500 status?
NS: It definitely has the potential, but the size and scale to reach a Fortune 500 status will take a lot of time. From that perspective, India and exhibition alone would not make a Fortune 500 recipe. It is a very capital intensive business.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri's Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM's Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri's Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM's Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
