InvestorQ : Will the merger address the biggest business challenges for PVR and Inox Leisure?
vaishnavi mhatre made post

Will the merger address the biggest business challenges for PVR and Inox Leisure?

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vidhya Laxmi answered.
1 month ago
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The answer would be yes and no. For instance, the merger does address the issue of size and reduction of losses, but not so much the threat of OTT, which is the potent threat. Most multiplexes had to completely shut down to prevent the spread of the virus, being a highly contact intensive type of business. This hit big multiplexes since they earned most of their revenues in the first week of any mega movie release. That would be addressed.

What will not be addressed is the bigger challenge of the proliferation of OTT platforms as an alternative mode of entertainment. With people confined to homes, the computer screen became the entertainment zone and OTT was the perfect fit. High quality content from OTT platforms like Disney Hotstar, Amazon Prime, Sony Liv and Netflix gave multiplexes a run for their money. The merger may not really address the OTT challenge.

To sum it up, the merger of PVR and Inox will give economies of scale does not address the increasing heft of OTT. Big stars and quality content has gravitated towards OTT in last 2 years. For now, movie producers still insist on releasing movies in theatres, but these are business decisions and can change pretty fast. The merger has no answers for the most intense threat to multiplexes from the OTT factor and that is something to worry about.

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