Alok Tandon, CEO, INOX Leisure Ltd, is a respected and forward-looking leader and evangelist in the space of theatrical exhibition across India, and over the past year of a crippling lockdown that virtually razed the livelihoods of cinema theatres across India, has nevertheless been in feisty, raring-to-go mode, working behind the scenes to help propel his network and the sector into quick recovery.
Alok is an industry veteran with more than three decades of experience across the Entertainment, Hospitality, and Pharmaceutical industries, and from starting as a member of INOX’s start-up team to being its CEO, has been celebrated for having spearheaded the organization, in tandem with its founders, from scratch to a footprint of 650 screens. Under Alok’s leadership, INOX Leisure enjoys an aggressive positioning in the market and has always enjoyed continuous business growth.
The man with the big vision which just before the lockdown had manifested itself as INOX Megaplex, shares his views on multiple aspects.
Tandon and his team at INOX — as indeed the association that has entrusted INOX, PVR and Cinepolis to guide and represent their efforts to govt and confabulations across the industry and even related sub-sectors — have been in continuous war-mode efforts to ensure that the theatrical exhibitions sector and all its players are prepped and ready for a smooth, quick resumption as soon as possible after the lockdown opens up. Driven by the most stringent and pre-emptive safety protocols for every single person who works at or visits any cinema theatre.
The preparedness at INOX, particularly, bespeaks total commitment to a sub-sector that has created the brick-and-mortar structures of movie screens which have been the body that allows the smooth flow of the movies that India’s creative content economy has always produced over decades to provide every Indian family across demographics, its single most cherished family/friends outing – watching a film at the theatre.
So here’s a deep dive with Alok Tandon, CEO – INOX Leisure Limited, who shares with Pavan R Chawla his views on multiple aspects, ranging from the effects of the lockdown on the Indian cinema exhibition industry, INOX’s preparedness to bounce back (remember, it has projected an ambition to add another 958 screens nationwide after FY 22), the need for government support, the importance of the cinema advertising business, on the complicated debate of OTT V/s Cinema. And more. Excerpts:
It has been about one year since COVID arrived in India, and may have an impact on the next one year. Your views?
For any industry which has stood witness to human emotions and has delivered cherished memories to its beloved patrons throughout its lifetime, staying shut for more than 200 days can leave a massive impact on health of the entire sector. Considering that we were among the first set of businesses to be shut and among the last ones to be allowed to operate, the unprecedented loss of revenues and its subsequent financial implications were bound to be a cause a concern.
Taking smart, tough and sustainable decisions, we saw through the difficult phase and managed to stage a mini-recovery of sorts in Q4 ’21. But just when the industry had started witnessing the old fervor, the resurgence of 2nd wave of COVID-19 has emerged as a cause of concern.
The impact of second wave of COVID-19 has not just been the obvious physical one; but a bit scary on the emotional front as well. The disease has impacted nearly every household in the country. There is not a single person whose relative, friend or an acquaintance has not been affected by this dreaded virus.
From an organization’s perspective, all I can say is that we are familiar with the path of reopening and resumption, and therefore we can potentially see a quicker revival trajectory. We are optimistic that consumers are going to rely on brands that they trust, in the post-pandemic era. This is where our hard work put in by our teams will come into play.
In the current situation, we have pinned our hopes on the rapid and widespread vaccination drive, which we hope would arrest the surge in cases. (story continues below)
INOX – Cutting costs…
…to keep alive the promise of a great track record seen even during FY21
… and projections moving ahead
How well are you prepared this time? Any learnings from last year that will be useful this year when theatres are allowed to reopen?
Talking about the way forward, our key focus will continue to stay on safety and hygiene. Warmth, care and hygiene have always been a way of life at INOX, and it will continue to remain right up there in the priority list in the times to come.
Since the pandemic started in March 2020, we have invested a lot of time in training and awareness about the new normal, only to ensure that our cinemas remain the safest public places.
Our teams this time are familiar with the new normal, and this should prove to be handy when we resume operations now after the 2nd wave. The Tteams are well aware of the protocols adopted on resumption of operations after the first lockdown, and we can only improve from this situation.
What gives us a lot of comfort is the manner in which the guests displayed tremendous respect for the new SOPs and how comfortably they adjusted their behaviour to it. We are certain that they will be equally considerate this time as well.
So the vaccine rollouts and the pent up demand is likely to bring up a better second half for theatrical exhibitors in FY22?
Yes, absolutely. Not just vaccine rollouts and the pent up demand, but also the content line up provides us with the confidence to stage a comeback.
We are extremely bullish about the second half for FY22 since there will be a heavy flow of top-quality content across genres and languages with some amazing storytelling concepts which will be releasing every Friday.
The phase from mid-October‘20 till March 21 has shown that audiences are willing to turn up for good quality content. I also believe that there will be less fear of psychosis amongst people since a major part of the country will be vaccinated by the time cinemas are allowed to operate after the 2nd wave. IN fact, speaking for ourselves, I am happy to share that the company will bear the cost of vaccination of all its employees.
Over the past 12 months, what support have you sought for the association and multiplexes in general from the Government?
We made some representations to the Central Government, State Governments as well as to the relevant Ministries under the aegis of Multiplex Association of India, and we sought support on various fronts, including financial support in the form of GST waivers, waiver of Minimum Demand Charges on Electricity, and interest-free loans. We have also requested for exemptions from various taxes, like Show tax, LBTs and Property taxes.
Once cinemas reopen, which are the films lined up for this year? Which films do you expect will see good footfalls?
I strongly believe that the operational part of the year 2021 will be a treat for movie lovers across the country. Once the theatres reopen, we will see massive line-up of movies like Sooryavanshi, 83, Bell Bottom, Jersey, SatyamevJayate, Maidaan, Jersey, Prithviraj, Brahmastra, Pathan, Laal Singh Chaddha, to name a few.
The established franchisees would come out with sequels Heropanti, Bhool Bhulaiya, Satyamev Jayate and a few more. Hollywood collections are expected to peak with releases like No Time to Die, Black Widow, Top Gun2: Maverick, Matrix 4 and MI7 during the year.
We are looking forward to a lot of movies expected to be released in other Indian languages. Other major releases in the south like RRR, Valimai, Aranya, Wild Dog, RadheShyam, Pushpa, etc will also bring massive crowds to the cinemas
During the first lockdown, there was a lot of debate around OTT platforms, and Radhe’s recent release on ZEEPLEX and ZEE5 triggered the conversations and debates again. What are your views, Alok, on the debate around OTT Vs Cinemas?
First of all, we have to understand the difference in the type of content consumed by the audiences in cinemas and on the OTT platforms. Content like docu-dramas, documentaries, web-series, and old movies do phenomenally well on streaming platforms, whereas cinemas are still a preferred way to enjoy fresh new movies, and that’s the reason both the channels have been not just co-existing but doing well in our country.
Both modes of entertainment are identified by a distinct consumption pattern and behaviour to an extent, largely due to the technology involved.
The conversation during the first lockdown was largely around movies skipping the theatrical run and releasing directly on streaming platforms. This was not according to the age old and globally prevalent theatrical windowing system.
By virtue of its construct, the distribution system followed in the industry till the pre-COVID times across the globe fetches maximum revenues and gains for every stakeholder in the industry, and there is no reason it would not do the same now.
Do you think that the Content sector was less impacted than the exhibition sector, thanks to OTT platform? And will the value-chain revert into the same kind of deliveries of pre-COVID BAU days?
The COVID-induced lockdown did not pardon any stakeholder in the film industry, whether the content creators or the exhibitors. Even organizations involved in movie promotions, movie events, digital promotions, publicity companies, advertising would all have suffered, due to the lack of content.
We all understand that the trend of a few movies releasing on OTT is purely a result of the pandemic and the subsequent lockdown, and not due to the cinemas’ incapability to draw crowds.
So once the pandemic subsides, vaccines become available, content flow gets back to normal, we believe that the movie ecosystem would adapt itself back to the age-old windowing and distribution patterns.
We have seen that the studios which have waited for the theatrical run have reaped the benefit of this windowing pattern.
The core of the cinema exhibition industry is the passion and fondness for the giant screen experience, prevalent in the Indian masses, and I can confidently say that the lockdowns could not challenge that passion and fondness, and we will surely see a pent-up demand in the coming month.
How do you plan to keep the audiences’ interests and engagement afloat? What are the new marketing initiatives you have planned for FY22?
With customers at the core of all our decisions, we will continue to innovate on the marketing front, and ensure that they remain engaged, aware and loyal. We will lay a lot of focus on Innovation, as it has been the cornerstone of our way of working, and we know that we can hasten our revival with some path-breaking innovations revolving around the giant screen, like Private Screenings, alternate content screening, unique brand collaborations, introduction of new F&B concepts etc.
In the current times, we have been extremely agile, positive, relevant and transparent on our social media platforms, with an improved sense of timing. Our content on social media may be largely divided into posts pertaining to new releases and posts aimed at strengthening the brand.
In the absence of new movie releases, we kept the engagement high with other movie-centric posts like trivia, birthday wishes, throwbacks etc. We also kept engaging with our audiences with news updates with our spokespeople talking about the organization’s approach to the COVID situation, and how we planned to overcome it.
We are absolutely upbeat about our renewed F&B roadmap, and we are extremely excited about it. Besides making our food available on online food ordering platforms, we have chalked out plans to expand our range, add more home-meal replacement options. With a good content pipeline in the months to come, I strongly believe that the remaining part of 2021-22 will be a treat for movie lovers across the country.
INOX Leisure has pivoted to private screenings to wither the pandemic storm. What would be the future of this model?
Private screening is an exclusive friends and family private cinema experience available at all operational INOX cinemas across the country. It provides an additional option to the guests to enjoy the grand cinema experience with handpicked content in an exclusive and personalized manner, while maintaining social distancing. With this service, guests can reserve an entire INOX auditorium for a private show, entirely for their family members and friends.
This exclusively curated experience may be availed by the guests at the date and time of their choice, at any of the operational INOX cinemas across the country. To make it more memorable affair, INOX would allow the guests making the booking to choose the content of their choice, either from the current play list, or an old blockbuster.
We believe that the new and innovative offering is safe and secure, and will become a new way of celebrating special occasions. With simple and easy pricing, and a convenient booking process, INOX aims to curate memorable banqueting experiences with features like a welcome by the cinema team, welcome message on the screen and even the choice of photography and cake on demand.
In the short window of 4 to 5 months between the resumption of operations and the 2nd wave of COVID, we hosted more than 500private screenings at our cinemas across the country.
Can you elaborate more on INOX Leisure’s F&B roadmap?
F&B has always been an important revenue stream for us. In the previous two financial years, contribution of F&B in total revenues has been in the range of 26%. The F&B contribution in FY21 stood at 19%, a marginal decline due to the COVID induced lockdown.
We are aggressively growing our F&B segment and are extremely optimistic about our new F&B roadmap with the introduction of some new processes and exciting innovations, including making our food available on online food ordering platforms, Swiggy, Zomato, Eazy Diner& Thrive and a few more.
With a comprehensive roadmap, we look to cater to newer consumer segments, besides strengthening the F&B revenue stream. The idea is to tap a new consumer base that buys our food products even if they are not watching a movie.
While the existing range is already too enticing, there is a huge range expansion plan in place. We look to include meal options like Pulao, Biryani, DalMakhani, the much-loved servings of Rajma-rice & Chana-rice, Pastas, Garlic Bread and Chilli Cheese Toasts.
On the beverage front, we will have a range of juices and mojitos, besides the introduction of our very own Popcorn shake. We are also looking to introduce more options in our popcorn range. To satiate the sweet tooth, we will be introducing exotic jar-based dessert options like Tiramisu and Blueberry Mousse. We will see the introduction of ready-to-eat products as an opportunity to innovate further and keep expanding our range in a consistent manner.
It is a new way for us to deal with and serve our consumers, and we are excited about the new processes, new supply chains, new ways of innovative and trendy packaging, new SKUs, and a potentially new consumer base.
Cinema advertising has always provided an impactful and effective awareness window for marketers. Your views on the road ahead for this, once the gates and doors to theatres and screens are thrown open…
Advertising is one of the important pillars of our revenue generation as it contributes about 10 to 12% of our overall portfolio in a normal year. In the current scenario, it is unusual times for the advertisers as well, but we have complete faith in the rigorous efforts that we have been putting in this business over the last few years.
It is a matter of a couple of blockbusters for cinema advertising to get back on track. Like the unshakeable faith of the audiences, we know that the faith of the advertisers will also remain unshakeable.