Reporton UsageofTechnologyinEntertainmentIndustry

SubmittedBygroupA4 2012067 2012069 2012078 2012116 2012121 2012230 2012246 AkshayUdayPhal AmandeepSheokand HimanshuJain SunilPandey SwayambharMajumder RajdeepDebRoy TarikaChopra

 Contents
Reporton.................................................................................................................................................1 UsageofTechnologyinEntertainmentIndustry.............................................................................. 1 EntertainmentIndustry......................................................................................................................... 3 DescriptionoftheCompany................................................................................................................ 3 Objective..................................................................................................................................................4 SolutionDescription..................................................................................................................................5 Process/BusinessComponentchosen................................................................................................ 5 WhatistheUnlimitedCard?.............................................................................................................. 5 Technology/Practice(descriptionofwhat)....................................................................................... 5 Edge/Advantageitbrings........................................................................................................................ 6 PerformanceParameters.......................................................................................................................... 6 FinancialFeasibility...................................................................................................................................7 MaintenanceandUpgradation................................................................................................................ 8 APPENDICES..............................................................................................................................................9 RequiredCalculations......................................................................................................................... 10

 EntertainmentIndustry
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 year1. 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. Bollywoodaccountsforcloseto46%offilmrevenuesinIndia2. The Indian entertainment and media (E&M) industry has outperformed the Indian economy and is one of the fastest growing sectors in India. The E&M industry generally tends to grow fasterwhentheeconomyisexpanding.TheIndianeconomyhasbeengrowingatafastclipover 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, broughtaboutbyreductioninpersonalincometaxoverthelastdecade

DescriptionoftheCompany
Priya Village Roadshow (PVR) Cinemas is one of the cinema chains in India. The company, whichbeganasajointventureagreementbetweenPriyaExhibitorsPrivateLimitedandVillage Roadshow Limited in 1995 with 60:40 ratio, began its commercial operations in June 1997 with thelaunchofPVRAnupaminSaket,Indiasfirstmultiplex.PriyaExhibitorsweretheownersof 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.
Itplanstoopen500screensby20153.

PVRcommandsasignificantpresenceinNewDelhiandNCRwith55screensin16multiplexes. 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 Indias largest multiplex, PVR Orion,in Bangalore with11screensincludingthreeultrapremiumcinemasknownastheGoldClass4.
1 2 3 4

SurveybyKPMGandFICCI www.filmfed.org BusinessStandard.September15,2012.

http://www.thehindubusinessline.com/companies/pvropens3goldclassscreensatorion mall/article4720493.ece

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 nofrills cinemas for consumers in tier II cities, the original PVR Cinemas targeted at the urban & semiurban consumers and PVR Directors Cut for ultra luxurywatching.

Objective
Theobjectiveofthistechnologyistoprovidethecustomersisunlimitedcinema.Customerscan 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 releases, exclusive unlimited cardholder offers/competitions,andinvitationstoexclusiveadvancescreenings. Fewexamp0lesofsuchcardsare, 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 anentrance fee of 30 euro. (since2000) Carte LePass for the chain ofmovie theatres of Path/Gaumontin40 Frenchcities(with atotalof800screens),for20.50euro/month. UGC Unlimited passes for the four UGC movie theaters in Belgium (56 screens), for 16,90euro/month. PathUnlimitedCard(PUC)forthechainof16multiandmegaplextheatresofPathin theNetherlands(129screens),for19/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,DenHaag,DelftandRotterdam,for18.50permonth. Groninger Filmkaart for 20/month for the two movie theaters MustSee Euroborg (10 screens)andImages(3screens)inGroningen. MustSeeAllCardfor18/monthformovietheaterMustSeeEuroborgonly.

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 Londons West End (plus 1.50 per 3Dfilmviewed)ticketscanonlybepurchasedonthedayoftheshowing. SFMoviePassportpassforallthemoviesshowninSFGrouptheatersinThailand,valid foramonthforonepersonandoneshowingpermovie,atthepriceof800bahtoreqvUSD20. 4

 MembresaClubCinpolis$125Pesos(10USD)/monthfortheregularmembershipgrants access to all the facilities across Mxico for unlimited viewing. 1 Year of forced membership is required.TherearealsoVIPanddoublememberships. HotlipsadultmovietheaterTheHague,for55euro/month.

SolutionDescription
Process/BusinessComponentchosen
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 allow customers to watch unlimited movies and they never have to worry about standing in a queue to buy a movieticket. All they have to do it swipe their Unlimited Card or scan their thumb at one of the many terminalskeptatthecinema,chooseamovie,pickaseatandprinttheticket.Theydonthaveto carryanycash,noteventheircreditcard.

WhatistheUnlimitedCard?
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 availtheservicesoftheUnlimitedCard.Theyalsoneedtolinktheirthumbprint&theirbank accountwiththeUnlimitedCard.Soeverymonthafixedamountwillbedeductedfromtheir bankaccount.TheydontneedtopayfortheticketstheypurchasewiththeUnlimitedCard. 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 thecountry.

Technology/Practice(descriptionofwhat)
Software capable of reading biometric devices will be integrated with the already existing ERP systemofPVR,whichwillallowuserstopurchaseticketsusingterminalsthatwillbeconnected to PVRs server. Storage of data related to the cardholders will be stored in a central database. Thename,photoandotherdetailsneedtobeprintedonthecard. 5

Edge/Advantageitbrings
Allowsacustomertobookticketshasslefree. Customer loyalty will be created for the cinema. Users will be locked into a contract so theywillnotgotocompetitormultiplexes. Customers save because they dont have to pay for tickets anymore. The more movies theywatch,themoreistheirsavinginrealterms. A steady revenue stream will be created for the multiplex. They will make money irrespectiveofthequalityofmovies It will help increase the footfall, so revenue from alternate revenue sources like food court,screenadvertisementetc.willdefinitelyincrease. It will help PVR create a database of consumers that they can target for specific promotions.

PerformanceParameters
Theprojectwillbeevaluatedonthefollowingparameters. GrowthinthenumberofUnlimitedCardholdersonamonthlybasis. Total revenue generation by Unlimited Cards taking into account the effect cannibalization. Servicelevelofunlimitedcardtransactionsusingtheterminal 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, whicharenotsuperhit,andtheydidnotplanearlier. o This will in turn increase the revenue from the nonhit movies. And, the numberofpeoplewatchingoutoflistmoviesmayincrease. This will increase the bargaining power of PVR with other producer; whos lowhitmoviesbarkthetheatre.

FinancialFeasibility
ThecustomerhastopayasubscriptionamountofRs.1000forthemembershipcard. Thetotalnumberofvieweratthemultiplexinamonthwouldbearound23000. AveragepriceperticketisexpectedtobearoundRs.160. Averageoccupancyperscreenwouldbearound287. 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 2030% of consumers to go for this subscription which would createasubstantialincreaseinrevenue.Thismembershipofcardisalsogoingtoboostthesales offoodandbeveragesto30%alongwiththeincreaseinsalestoRs2.8Crores.Thisapproximate figures show that there would be an increase in revenue of the multiples by 38% and earning before taxby30 %onamonthly basis.Inaddition tothis there areotherfactors which are to be followedareasfollows: 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 hour customer will buy somethingfromthestallsorthefoodcourtswhichwouldgenerateadditionalrevenues. 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 showtheprivilegecardandavaildiscounts. 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 resultandleadtodiminishingprofitsforthewholeindustry. We will have to employ delivery boys for home delivery of tickets at a nominal charge ofRs.30/perticket. There will be an inhouse IT team which will take care of the Website as well as the queries. We will soon extend the online web protal to a similar application that can be used on androidenabledphonesandalsoipod/ipad,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 breakeven and be profitable within 46 months. Withincreasedservices,wewillreacheconomiesofscaleandlowerourcosts. 7

MaintenanceandUpgradation
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 followinghardwareandsoftwarecomponentsrequirement: MagneticCard. KioskMachinedetectingtheMagneticCard. BiometricreaderattachedtoKiosktocheckfingerprintsforpersonalidentification. PrinterattachedtotheKiosk. Softwareprocessingtheoverallprocess. Datastorageandretrievalbase. NetworkingthedatatotheERPsystem.

Hardwaremaintenancesarerequiredwiththeincreasingdataandloadi.e.moredataspaceand serverconfigurationimprovement. Backup system will be always ready with the parallel mirrored data in case there is issue with theexistingone. 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. UpgradationoftheUnlimitedCardSystemcanberelated withtechnologyandbusiness partas well.Followingarethescopeofupgradationinhardwareandsoftwareside: 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. FingerprinttoRetina/Voicecheck. Bigdatahandlingtool. Usageofcloudfordataretrievalinsteadofphysicalstorage. Increasing the complexity of business logic of the software with the counter of issues everytimethathadearliernottakencareof.

APPENDICES
Presently,wearefollowinganERPsystem.We willaddonthechanges totheERPsystem.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 biometricdevicemanufacturersacrossthecountry. 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 theseats. 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 serveasabridgebetweentheonlinebookingsiteandthebiometricsystem. Systems: As this will be implemented, PVR will have to install the touchtype of system across all its centres (movie halls). For this product, again tenders can be invited from theexistingsystemmanufacturerswiththerequiredspecificationofthesystem 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.whichwillbeconsumedregularly. These types of items will be order on stock basis and will be preplenished at every moviehall,astheirinventorywillgodown. ERP system: No need of new ERP implemention. The new features and technology will bemanagedbytheexistingERPsystem. So, no separate sourcing is required for any ew ERP system. In addition the existing can beupgradedbypresentspecialist(vendor). 9

RequiredCalculations
Noofscreens 5 Revenue from tickets = 70percent of totalrevenue TotalRevenue=2.1cr

Average capacity screen

seating per

287

Monthlyfootfall

22959

Approx no of Card holders= 6900[30percent of monthly occupancy] Priceofonecard=Rs1000

Average no of movies per day perscreen Average price per movieshow Revenue generated month TotalRevenue

160

Totalcontribution=Rs6900000

14693760 per

21000000

Ticket Revenue after introducing thecard=0.7*14693760=Rs1.02cr Totalticket revenueaftr introducing card=1.71cr TotalRevenue=2.42cr

monthly incurred Rent0.15 cost

3150000

10 percent additional revenue from foodandbeverages,i.e.24lakh NewTotalrevenue=2.64cr

Employees.10 Overheads.20 Food and beverage.07 Movie screening

2100000 4200000 1028563.2

6300000

10

.30 PBT=18percent 3780000

NewPBT

4752000

Fixed Cost: RFID detecting system cost Variablecost:Issueingcost

*weeklyfootfall=4*[.8*287*3]+4*[.4*287*4]

ThereisanapproxRs. 10 lakhincrease inprofitbefore tax per month.Therefore, annual PBTisaroundRs.1Crexcludingimplementationcosts.

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