Report on Usage of Technology in Entertainment Industry

Submitted By group A 4 201206 7 201206 9 201207 8 201211 6 201212 1 201223 0 201224 6 Akshay Uday Phal Amandeep Sheokand Himanshu Jain Sunil Pandey Swayambhar Majumder Rajdeep Deb Roy Tarika Chopra

Contents
Report on................................................................................................................. 1 Usage of Technology in Entertainment Industry......................................................1 Contents..................................................................................................................... 2 Entertainment Industry........................................................................................... 2 Description of the Company................................................................................... 3 Objective................................................................................................................. 3 Solution Description................................................................................................ 4 Process / Business Component chosen................................................................4 What is the Unlimited Card?.............................................................................. 5 Technology / Practice (description of what).......................................................5 Edge / Advantage it brings...................................................................................... 5 Performance Parameters......................................................................................... 6 Financial Feasibility................................................................................................. 6 Maintenance and Up gradation...............................................................................7 APPENDICES............................................................................................................ 8 Required Calculations........................................................................................... 9

Entertainment Industry
Entertainment industry on India is at an inflexion today with major changes in various segments. The industry comprises of Television, Films and Print. Our focus

is on the film segment. The industry will grow by 12.5% this year 1. The size will be hit USD 20.9 Billion by end of this year. In term of numbers of films, India produces highest number if films in world. Bollywood accounts for close to 46% of film revenues in India2. The Indian entertainment and media (E&M) industry has out-performed the Indian economy and is one of the fastest growing sectors in India. The E&M industry generally tends to grow faster when the economy is expanding. The Indian economy has been growing at a fast clip over the last few years, and the income levels too have been experiencing a high growth rate. Above that, consumer spending is also on the rise, due to a sustained increase in disposable incomes, brought about by reduction in personal income tax over the last decade

Description of the Company

Priya Village Roadshow (PVR) Cinemas is one of the cinema chains in India. The company, which began as a joint venture agreement between Priya Exhibitors Private Limited and Village Roadshow Limited in 1995 with 60:40 ratio, began its commercial operations in June 1997 with the launch of PVR Anupam in Saket, India's first multiplex. Priya Exhibitors were the owners of the Priya theatre in Basant Lok Market, and they acquired Anupam Theatre in Saket and under PVR launched a multiplex. Currently PVR controls 385 screens in 90 locations across 37 Indian Cities. It
plans to open 500 screens by 20153.

PVR commands a significant presence in New Delhi and NCR with 55 screens in 16 multiplexes. PVR also has a strong presence in Chandigarh, Bhopal, Ludhiana, Nagpur, Chennai, Lucknow, Indore, Hyderabad, Bangalore, Mumbai, Nanded, Ahmedabad, Kochi, Udaipur, Vijayawada and Visakhapatnam. PVR currently operates India's largest multiplex, PVR Orion,in Bangalore with 11 screens including three ultra-premium cinemas known as the Gold Class 4. PVR recently launched its premium brand, PVR Premiere, targeted at urban consumers in metros, with the opening of PVR Select Citywalk in Select Citywalk. The company operates three other brands, PVR Talkies, the no-frills cinemas for consumers in tier II cities, the original PVR Cinemas targeted at the urban & semiurban consumers and PVR Director's Cut for ultra-luxury watching.

Objective
The objective of this technology is to provide the customers is unlimited cinema. Customers can use the card to watch films at cinemas as often as they like! They also enjoy 10% off all in-cinema food and drink purchases at all times. They may also choose to receive regular email newsletters, updating them on the latest film
1 2 3 4

Survey by KPMG and FICCI www.filmfed.org Business Standard. September 15, 2012.

http://www.thehindubusinessline.com/companies/pvr-opens-3-gold-class-screens-at-orionmall/article4720493.ece

releases, exclusive unlimited cardholder offers/competitions, and invitations to exclusive advance screenings. Few examp0les of such cards are, UGC Illimit passes for all UGC/MK2 movie theaters in France and Belgium (620 screens), for 19.80 euro/month or 35 euro/month for two people, and an entrance fee of 30 euro. (since 2000) Carte Le Pass for the chain of movie theatres of Path/Gaumont in 40 French cities (with a total of 800 screens), for 20.50 euro/month. UGC Unlimited passes for the four UGC movie theaters in Belgium (56 screens), for 16,90 euro/month. Path Unlimited Card (PUC) for the chain of 16 multi- and megaplex theatres of Path in the Netherlands (129 screens), for 19/month. Path Unlimited Gold for the same movie theaters, but including 3D and IMAX, for 26/month. Cineville Pass for 20 movie theaters in the west of the Netherlands, in Amsterdam, Haarlem, Den Haag, Delft and Rotterdam, for 18.50 per month. Groninger Filmkaart for 20/month for the two movie theaters MustSee Euroborg (10 screens) and Images (3 screens) in Groningen. Must See All Card for 18/month for movie theater MustSee Euroborg only.

Unlimited Card for the chain of movie theaters of Cineworld (formerly UGC) in the UK and Ireland, for 14.99/month, or 17.99 including those in London's West End (plus 1.50 per 3D film viewed)tickets can only be purchased on the day of the showing. SF Movie Passport pass for all the movies shown in SF Group theaters in Thailand, valid for a month for one person and one showing per movie, at the price of 800 baht or eqv USD 20. Membresa Club Cinpolis $125 Pesos(10USD)/month for the regular membership grants access to all the facilities across Mxico for unlimited viewing. 1 Year of forced membership is required. There are also VIP and double memberships. Hot lips adult movie theater The Hague, for 55 euro/month.

Solution Description
Process / Business Component chosen
We will provide PVR with a solution that will change the way they operate. The process of purchasing of cinema tickets & its payment will our Unlimited Card will 4

allow customers to watch unlimited movies and they never have to worry about standing in a queue to buy a movie ticket. All they have to do it swipe their Unlimited Card or scan their thumb at one of the many terminals kept at the cinema, choose a movie, pick a seat and print the ticket. They dont have to carry any cash, not even their credit card.

What is the Unlimited Card?

Unlimited Card is a card, which allows cinema lovers to watch unlimited movies on a monthly subscription charge. They have to sign a six months or a yearly contract with PVR to avail the services of the Unlimited Card. They also need to link their thumbprint & their bank account with the Unlimited Card. So every month a fixed amount will be deducted from their bank account. They dont need to pay for the tickets they purchase with the Unlimited Card. They can ever purchase a ticket for their partner and the price of 1 ticket will be added to their monthly bill. So those customers who usually watch a lot of movies will be saving a lot of money along with getting a hassle free service. An online portal will allow them to book tickets using their Unlimited Card. Then they can come to the cinema, scan their Thumb & print the tickets on the terminal. Unlimited Card holders can use their card in any of the PVRs across the country.

Technology / Practice (description of what)

Software capable of reading biometric devices will be integrated with the already existing ERP system of PVR, which will allow users to purchase tickets using terminals that will be connected to PVRs server. Storage of data related to the cardholders will be stored in a central database. The name, photo and other details need to be printed on the card.

Edge / Advantage it brings

Allows a customer to book tickets hassle-free. Customer loyalty will be created for the cinema. Users will be locked into a contract so they will not go to competitor multiplexes. Customers save because they dont have to pay for tickets anymore. The more movies they watch, the more is their saving in real terms. A steady revenue stream will be created for the multiplex. They will make money irrespective of the quality of movies It will help increase the footfall, so revenue from alternate revenue sources like food court, screen advertisement etc. will definitely increase. It will help PVR create a database of consumers that they can target for specific promotions. 5

Performance Parameters
The project will be evaluated on the following parameters. Growth in the number of Unlimited Cardholders on a monthly basis. Total revenue generation by Unlimited Cards taking into account the effect cannibalization. Service level of unlimited card transactions using the terminal Since the people will have an unlimited access to movies, many times, when they will be free may go for some movies, and are housefull. They will go for the movies, which are not super hit, and they did not plan earlier. o o This will in turn increase the revenue from the non-hit movies. And, the number of people watching out of list movies may increase. This will increase the bargaining power of PVR with other producer; whos low-hit movies bark the theatre.

Financial Feasibility
The customer has to pay a subscription amount of Rs. 1000 for the membership card. The total number of viewer at the multiplex in a month would be around 23000. Average price per ticket is expected to be around Rs. 160. Average occupancy per screen would be around 287. So, the total revenue generated would be around Rs. 2.1 Crore for a month which also include 20% of revenue generated from food and beverages and 10 % revenue generation from cinema advertisement. Now, we are expecting around 20-30% of consumers to go for this subscription which would create a substantial increase in revenue. This membership of card is also going to boost the sales of food and beverages to 30 % along with the increase in sales to Rs2.8 Crores. This approximate figures show that there would be an increase in revenue of the multiples by 38% and earning before tax by 30 % on a monthly basis. In addition to this there are other factors which are to be followed are as follows: The customer reports at the multiplex (with the BIG Card) at least 1 hour before the show is scheduled to get the print out of his tickets. In this one 6

hour customer will buy something from the stalls or the food courts which would generate additional revenues. This facility is only for the BIG card holder, so there are high chances that the card holder will bring someone along with him to watch the movie thereby generating revenues. The commission received via the various arrangements made by our company with the associate partners like Crossword, Barista, Pantaloons, etc. where our customers can show the privilege card and avail discounts. Price competition may also turn out to be a major threat in the future as the industry becomes stagnant. Due to the competitive nature of the industry, fierce price wars may result and lead to diminishing profits for the whole industry. We will have to employ delivery boys for home delivery of tickets at a nominal charge of Rs.30/- per ticket. There will be an in-house IT team which will take care of the Web-site as well as the queries. We will soon extend the online web protal to a similar application that can be used on android enabled phones and also i-pod/i-pad, etc. The initial investment would be high but as our subscription increases, and also with advertisement opportunities on our web portal along with commissions being received with our associates, we should reach break-even and be profitable within 4-6 months. With increased services, we will reach economies of scale and lower our costs.

Maintenance and Up gradation

Maintenance in reference to this technology will cover the basic working of the related hardware and software, technically as well as functionally . Unlimited Card comes with following hardware and software components requirement: Magnetic Card. Kiosk Machine detecting the Magnetic Card. Biometric reader attached to Kiosk to check fingerprints for personal identification. Printer attached to the Kiosk. Software processing the overall process. Data storage and retrieval base. Networking the data to the ERP system.

Hardware maintenances are required with the increasing data and load i.e. more 7

data space and server configuration improvement. Backup system will be always ready with the parallel mirrored data in case there is issue with the existing one. At the same time there will be separate call centre facility for this Card System facilitating customers as well as the internal users for all kind of information required for the backend system. Upgradation of the Unlimited Card System can be related with technology and business part as well. Following are the scope of upgradation in hardware and software side: Moving from magnetic card to inbuilt information already feeded into biometric device. User has to just get his identification and machine will recognize the mapped card details. Finger print to Retina/Voice check. Big data handling tool. Usage of cloud for data retrieval instead of physical storage. Increasing the complexity of business logic of the software with the counter of issues every time that had earlier not taken care of.

APPENDICES
Presently, we are following an ERP system. We will add on the changes to the ERP system. For, implementing this technology, PVR mainly need the sourcing of the following products/services: Biometric devices across the theatres: This is the most important hardware system, required by the originization. As it will be connected with a system, which will operate the individual orders. In addition the final print of the ticked will be done by the same. So, PVR will source the device on tender basis, inviting tenders from all the leading biometric device manufacturers across the country.

A website: The tickets will be booked online (may be on the spot or before hand). For this there is a need of regular update of the movies on screen and the current status of the seats. So, this can be outsourced to an organization, whose core competency lies in website developement and maintenance. Also, there is a requirement of an interface which will serve as a bridge between the online booking site and the biometric system.

Systems: As this will be implemented, PVR will have to install the touch-type of system across all its centres (movie halls). For this product, again tenders can be invited from the existing system manufacturers with the required specification of the system Miscellaneous items: In addition to the items above hardware and software system, there is a requirement of a huge number of stationeries like blank ticket rolls (for ticket printing), etc. which will be consumed regularly. These types of items will be order on stock basis and will be preplenished at every movie hall, as their inventory will go down.

ERP system: No need of new ERP implemention. The new features and technology will be managed by the existing ERP system. So, no separate sourcing is required for any ew ERP system. In addition the existing can be upgraded by present specialist (vendor).

Required Calculations
No of screens Average seating capacity per screen Monthly footfall 5 287 Revenue from tickets 70percent of total revenue Total Revenue= 2.1cr =

22959

Approx no of Card holders= 6900[30percent of monthly occupancy] Price of one card= Rs1000

Average no of movies per day per screen

Average price per movie show Revenue generated month per

160 14693760

Total contribution= Rs6900000

Total Revenue

21000000

Ticket Revenue after introducing the card=0.7*14693760= Rs 1.02cr Total ticket revenue introducing card= 1.71cr Total Revenue= 2.42cr aftr

monthly incurred Rent 0.15

cost 3150000 10 percent additional revenue from food and beverages, i.e. 24lakh New Total revenue=2.64cr

Employees .10 Overheads .20 Food and beverage .07 Movie screening .30 PBT= percent 18

2100000 4200000 1028563.2 6300000

3780000 4752000 Fixed Cost: system cost RFID detecting

New PBT

Variable cost: Issueing cost

*weekly footfall =4*[.8*287*3]+4*[.4*287*4]

There is an approx Rs. 10 lakh increase in profit before tax per month. Therefore, annual PBT is around Rs. 1 Cr excluding implementation costs. 10