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Report on

Usage of Technology in Entertainment Industry

Submitted By group A 4

2012067 Akshay Uday Phal2012069 Amandeep Sheokand2012078 Himanshu Jain2012116 Sunil Pandey

2012121 Swayambhar Majumder2012230 Rajdeep Deb Roy2012246 Tarika Chopra

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ContentsReport 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 invarious segments. The industry comprises of Television, Films and Print. Our focus

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is on the film segment. The industry will grow by 12.5% this year1. The size will behit USD 20.9 Billion by end of this year. In term of numbers of films, India produceshighest number if films in world. Bollywood accounts for close to 46% of filmrevenues 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 industrygenerally tends to grow faster when the economy is expanding. The Indian economyhas been growing at a fast clip over the last few years, and the income levels toohave been experiencing a high growth rate. Above that, consumer spending is alsoon the rise, due to a sustained increase in disposable incomes, brought about byreduction 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. Thecompany, which began as a joint venture agreement between Priya ExhibitorsPrivate 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'sfirst multiplex. Priya Exhibitors were the owners of the Priya theatre in Basant LokMarket, and they acquired Anupam Theatre in Saket and under PVR launched amultiplex. Currently PVR controls 385 screens in 90 locations across 37 Indian Cities. Itplans to open 500 screens by 20153.

PVR commands a significant presence in New Delhi and NCR with 55 screens in 16multiplexes. 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 currentlyoperates India's largest multiplex, PVR Orion,in Bangalore with 11 screens including

three ultra-premium cinemas known as the Gold Class

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.PVR recently launched its premium brand, PVR Premiere, targeted at urbanconsumers in metros, with the opening of PVR Select Citywalk in Select Citywalk.

The company operates three other brands, PVR Talkies, the no-frills cinemas forconsumers in tier II cities, the original PVR Cinemas targeted at the urban & semi-urban 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! Theyalso enjoy 10% off all in-cinema food and drink purchases at all times. They mayalso choose to receive regular email newsletters, updating them on the latest film

1 Survey by KPMG and FICCI

2www.filmfed.org

3 Business Standard. September 15, 2012.

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

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releases, exclusive unlimited cardholder offers/competitions, and invitations toexclusive 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 anentrance 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 ofthe 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 priceof 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. 1Year 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. Theprocess of purchasing of cinema tickets & its payment will our Unlimited Card will

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allow customers to watch unlimited movies and they never have to worry aboutstanding 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 themany 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 movieson a monthly subscription charge. They have to sign a six months or a yearlycontract with PVR to avail the services of the Unlimited Card. They also need tolink their thumbprint & their bank account with the Unlimited Card. So everymonth a fixed amount will be deducted from their bank account. They dont need topay 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 movieswill be saving a lot of money along with getting a hassle free service. An onlineportal will allow them to book tickets using their Unlimited Card. Then they cancome 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 alreadyexisting ERP system of PVR, which will allow users to purchase tickets usingterminals that will be connected to PVRs server. Storage of data related to thecardholders 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.

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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. Theywill go for the movies, which are not super hit, and they did not planearlier.

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.

o 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 membershipcard.

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 whichalso include 20% of revenue generated from food and beverages and 10 % revenuegeneration from cinema advertisement.

Now, we are expecting around 20-30% of consumers to go for this subscriptionwhich would create a substantial increase in revenue. This membership of card isalso going to boost the sales of food and beverages to 30 % along with the increasein sales to Rs2.8 Crores. This approximate figures show that there would be anincrease in revenue of the multiples by 38% and earning before tax by 30 % on amonthly basis. In addition to this there are other factors which are to be followedare as follows:

The customer reports at the multiplex (with the BIG Card) at least 1 hourbefore the show is scheduled to get the print out of his tickets. In this one

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hour customer will buy something from the stalls or the food courts whichwould generate additional revenues.

This facility is only for the BIG card holder, so there are high chances that thecard holder will bring someone along with him to watch the movie therebygenerating revenues.

The commission received via the various arrangements made by ourcompany 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 theindustry becomes stagnant. Due to the competitive nature of the industry,fierce price wars may result and lead to diminishing profits for the wholeindustry.

We will have to employ delivery boys for home delivery of tickets at anominal charge of Rs.30/- per ticket.

There will be an in-house IT team which will take care of the Web-site as wellas 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 withcommissions being received with our associates, we should reach break-evenand be profitable within 4-6 months. With increased services, we will reacheconomies of scale and lower our costs.

Maintenance and Up gradation

Maintenance in reference to this technology will cover the basic working of therelated hardware and software, technically as well as functionally. Unlimited Cardcomes with following hardware and software components requirement:

Magnetic Card.

Kiosk Machine detecting the Magnetic Card.

Biometric reader attached to Kiosk to check fingerprints for personalidentification.

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

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data space and server configuration improvement.

Backup system will be always ready with the parallel mirrored data in case there isissue with the existing one.

At the same time there will be separate call centre facility for this Card Systemfacilitating customers as well as the internal users for all kind of informationrequired for the backend system.

Upgradation of the Unlimited Card System can be related with technology andbusiness part as well. Following are the scope of upgradation in hardware andsoftware side:

Moving from magnetic card to inbuilt information already feeded intobiometric device. User has to just get his identification and machine willrecognize 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 counterof 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 ERPsystem. For, implementing this technology, PVR mainly need the sourcing of thefollowing products/services:

Biometric devices across the theatres: This is the most important hardwaresystem, required by the originization. As it will be connected with a system,which will operate the individual orders. In addition the final print of theticked will be done by the same. So, PVR will source the device on tenderbasis, inviting tenders from all the leading biometric device manufacturersacross the country.

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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 andthe current status of the seats.

So, this can be outsourced to an organization, whose core competency lies inwebsite developement and maintenance. Also, there is a requirement of an

interface which will serve as a bridge between the online booking site and thebiometric 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 tenderscan be invited from the existing system manufacturers with the requiredspecification 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 blankticket rolls (for ticket printing), etc. which will be consumed regularly.

These types of items will be order on stock basis and will be preplenished atevery 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 theexisting can be upgraded by present specialist (vendor).

Required Calculations

No of screens 5 Revenue from tickets =70percent of total revenue

Average seatingcapacity per

screen

287 Total Revenue= 2.1cr

Monthly footfall 22959 Approx no of Card holders=6900[30percent of monthlyoccupancy]

Average no ofmovies per dayper screen

4 Price of one card= Rs1000

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Average priceper movie show

160 Total contribution= Rs6900000

Revenuegenerated permonth

14693760

Total Revenue 21000000 Ticket Revenue afterintroducing thecard=0.7*14693760= Rs 1.02cr

Total ticket revenue aftrintroducing card= 1.71cr

Total Revenue= 2.42cr

monthly cost

incurred

Rent 0.15 3150000 10 percent additional revenuefrom food and beverages, i.e.24lakh

Employees .10 2100000 New Total revenue=2.64cr

Overheads .20 4200000

Food andbeverage .07

1028563.2

Movie screening.30

6300000

PBT= 18percent

3780000

New PBT 4752000

Fixed Cost: RFID detectingsystem cost

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.

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