PVR INOX Eyes Small Towns: Bets on FOCO for Expansion Beyond Metros.

Leading cinema exhibitor PVR INOX is strategically employing a franchise-owned company operated (FOCO) model as its key to expanding its footprint beyond India's major metropolitan cities. According to CEO Pramod Arora, this approach will also enable the company to extend its "affordable luxury" cinema experience to a wider audience.

Arora told PTI that by developing cinema infrastructure across the country, PVR INOX aims to provide economic support to local filmmakers and artists through box office revenue, thereby fostering continued content creation.

Under the FOCO model, investors own the cinema assets, while PVR INOX leverages its expertise to oversee all aspects of the properties, including design, development, execution, and daily operations. This allows the company to expand its reach in a capital-efficient manner.

PVR INOX recently inaugurated a 5-screen multiplex in Raipur utilizing the FOCO model and views this as a crucial strategy for accelerating its expansion nationwide, particularly in Tier II and Tier III cities that hold significant growth potential for premium cinema experiences.

"The FOCO model's inception was marked by the Gwalior location that opened last year, followed by the Raipur multiplex launching at the start of this fiscal year. We are now poised for rapid growth in this area," Arora ¹ stated. He emphasized the importance of having well-defined standard operating procedures (SOPs) in place, noting that the company has invested the past three and a half years refining this model, which has resulted in a 50% reduction in execution time.  

Arora also highlighted the need to broaden cinema access throughout India, citing the North East region as an example where entertainment opportunities have been limited. PVR INOX plans to establish screens in Shillong, Gangtok, and Siliguri using the same FOCO model.

Discussing the significance of developing cinema exhibition infrastructure nationwide, Arora pointed out that a substantial 92% of the industry's revenue relies on national, regional, local, and hyperlocal content, with only 8% coming from imported content. He asserted that a robust cinema infrastructure is essential to provide better showcasing for this local content and deliver economic benefits to regional filmmakers and artists.

In its third-quarter report, PVR INOX disclosed that it had signed agreements for 100 screens across 22 cinemas, including 31 screens in 8 FOCO cinemas and 69 screens in 14 asset-light setups. Arora indicated that the upcoming screens will embody the "affordable luxury" concept, catering to the increasing consumer demand for immersive cinematic experiences.