Multiplex operator PVR delivered one of its strongest results with most metrics, including box-office business, performing better than pre-COVID numbers in Q1FY23 but did not see a similar recovery in in-cinema advertising.
To address this, the company on July 26 announced the launch of experiential in-cinema advertising to boost brands’ interest.
But what is experiential in-cinema advertising? “This is using walls across the auditorium to project a story that complements the main screen. Imagine a Woodland or a Maruti ad where you can see the car driving from the side walls to the main screen. The side panels will open up,” PVR CEO Gautam Dutta said..
The company plans to use 3D projection mapping on the sides of the auditorium and has started this for around six screens across India.
Maruti Suzuki was the first to come on board to use this platform to announce the launch of its new SUV Brezza. “We are in conversation with eight to nine brands including categories like telecom, car and fashion. They (brands) want to make commercials that fit this technology,” added Dutta.
But will this cost advertisers more? “The pricing doesn’t change but advertisers taking this (such) auditoriums will have to pay a lump-sum amount,” the PVR CEO said.
Pre-COVID, advertisers spent Rs 12,000-15,000 a screen a week for premium metro locations and in Delhi, this went up to Rs 20,000, said analyst Karan Taurani, senior vice-president, Elara Capital. However, the rates have fallen 30 percent, he added.
Dutta said that this was not due to any discounting in ad rates but because they offered special packages. “We bundled on-screen with off-screen. If somebody has done a four-week activity, we have given one week extra. It was largely done in Q1 and Q2 (FY22) because cinema advertising was out of action for long,” he added.
Cinema advertising across the multiplex business took a severe hit in the last two years due to the impact of COVID-19 which led to the shutting down of movie halls, phased reopening and capacity restrictions that kept advertisers away from the big screen.
Pricing was down to 70 percent; annual deals, which accounted for almost 40 percent of ad deals in the pre-COVID-19 period, shrank to less than 5 percent last year.
In Q1FY23, PVR’s advertising revenue was down 32 percent at Rs 62.7 crore compared to Rs 91.6 crore in Q1FY20. “What is not performing is government advertising, that has dried up. Telecom is slow, handset is slow because of players like Oppo, Vivo (holding back ad spends) and also because of the shortage of chips, which has also impacted auto (companies).
“Plus, auto companies are seeing huge demand and waiting periods are going up. So, with more demand than supply, they do not need to advertise. Education is also under pressure,” said Dutta, referring to companies that conduct online tutorials.
During the Q2FY22 investor call, Kapil Agarwal, joint managing director, UFO Moviez India, an in-cinema advertising firm, had said half of their advertising revenue comes from the corporate sector and the other half from the government.
PVR is now counting on the upcoming festival period to revive advertiser interest and expects its new cinema advertising offering to drive brand partnerships.
“In-cinema was 11 percent of the total revenue and we should get to that by Q4 (FY23). Electronics, retail, fashion are all back, FMCG has recovered 90-95 percent, real estate, jewellery are status quo and personal care, building industrial equipment are back to pre-COVID levels. Banking is also back in a big way,” he added, charting out the sector’s spending pattern. Money Control