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Small Is Big

Mimicking the explosion that once transformed the country’s metros, smaller cities and towns are now poised for phenomenal growth in the entertainment sector

As the Indian economy experiences a boom in all sectors, triggered by its economic and investment policies, the metros or the Tier I and II cities are inundated with burgeoning investments in the industrial, entertainment and services sectors. Along with large-scale investments, the realty sector has boomed, creating congestion, arising out of an increasing demand for residential and commercial properties. This congestion in realty structures has forced the respective governments and many companies to seek out alternative smaller cities, leading to a demand for Tier II and III cities.

One of the basic reasons for investments flowing in to the smaller cities is available properties and affordable prices. Moreover, the special initiatives taken by the respective governments in providing the smaller cities with infrastructural facilities and creation of SEZs (Special Economic Zones), has played a vital role in promoting these small towns as cities of the future.

Keeping in view all the congenial factors necessary for setting up corporate infrastructure, the investing companies range from multiplexes to pharmaceuticals to financial institutions to automobiles to the IT and ITES (Information Technology Enabled Services) sectors to the retail and real estate sectors which are opting for the smaller cities and transforming them into India’s fastest growing cities in a matter of few years.

The large-scale investments by the corporate sector in the smaller cities, apart from initialising economic prosperity and job opportunities, has also created demand for realty spaces. The rising prices and promising future of these cities are driving investors to buy properties predicting long-term gain.

Of late, Tier II cities like Pune, Kolkata and Hyderabad have experienced business opportunities and infrastructural developments like never before. Now it is the turn of Tier III cities or the smaller cities like Jaipur, Ghaziabad and Kochi, to make it big in the realty business as the government and corporate sector target them as ‘India’s Next Destination Cities’.

PVR, besides increasing its presence in metros, has strongly geared a substantial portion of its expansion in cities such as Jalandar, Ujjain, Ludhiana, Mysore, Bilaspur and Panipat, with its low-cost model, PVR Talkies, operational since 2007. PVR Talkies, which has been growing at 100 to 120 per cent, is looking at adding 20 to 25 more screens for the Talkies model in the next two years. PVR plans to increase its screen count by adding another 130 to 140 screens to the existing 197 screens in 13 states across India.

With a relatively saturated retail real estate scenario in metros and the multiplicity of multiplexes therein, smaller towns and cities are emerging as new centres of growth. Since screen density in India is as low as 12 screens per million, a number of leading cinema chains are eyeing this gap as a
profitable marketing proposition and fast setting up shop, especially tapping smaller towns.

The strategy of expanding in Tier II and III cities works well for us in many ways. One, it can tap into the increasing population of viewers who value experience over mere viewing and have high purchasing power. Two, with increasing land prices, increasing presence in metros would place a strain on the company’s balance sheet and also does not ensure high footfalls.

PVR is looking at making the brand omnipresent with respect to cinemas with the highest recall value. We believe that the aspirational base of patrons and the consumer demand for movies is growing faster in Tier II cities than Tier I cities. Tier II-III falls in a high potential growth area for us and we aim to provide a PVR in every town and city in the country.

The opening of a cinema chain in smaller towns has now become a more profitable venture for us and other multiplex players than before because of the higher return on investment which they are able to generate. The primary reason for this is the digital cinema revolution, which has resulted in lower distribution costs. Every small town is witnessing a shopping centre or a mall spring up, which are adding screens to increase their footfalls.


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