Back from the brink

Not many will know that in mid-1990s Sathyam Cinemas (it just had three screens then) was on the verge of closure. That was a time when piracy was rampant in Tamil Nadu and most theatres, struggling to attract customers, were becoming marriage halls. Poor business forced owners of Sathyam too to consider other options. After all, it sat on a prime property just off the arterial Mount Road

Two decades later on August 12, 2018 India’s largest theatre chain PVR decided to acquire SPI Cinemas (the company that was formed to house the flagship Sathyam and other brands that were launched later) which now has 68 screens in 10 cities for ₹850 crore. What brought Sathyam back from the brink is an interesting story of technology-led innovations and adoption of practices with a single objective — make film watching fun and easy.

It all began sometime in late 1990s when Kiran Reddy, the next generation member of the family that owned Sathyam and a keen connoisseur of movies, retuned to India after his studies. He understood the need to substantially enhance the customer experience to draw them back to the theatre. He took charge and began to re-imagine Sathyam and took initiatives most of which were industry first then.

Back then Sathyam had just three screens. Reddy’s first step was to renovate the place to use the space effectively. He wanted to build more screens and usher in a multiplex culture which will enable Sathyam to offer more content and attract larger footfall which was key to his plans.

He began looking at modern technologies to offer an experience people cannot get at home from pirated sources. To execute his plans he brought in Tan Ngoranga, an expat from Australia as Chief Operating Officer. Sathyam embraced digital projection and modern audio systems. A new screen `Shree” was added to test customer response to these technologies. The response was positive and they were deployed in other screens. Within a few years Sathyam had six modern screens with top notch projection including digital 3D projection and Dolby Atmos sound systems.

This was only a part of the transformation. Reddy used technology to make buying tickets easy. Sathyam launched on-line booking of tickets and an app much before others in the industry took note of it. When students could not book tickets on-line (as they did not have a credit or a debit card), he started a pre-paid ‘Fuel Card’ which then morphed into a digital wallet — again an industry first. The large space behind the theatre was kept vacant for parking — a USP that brought customers to Sathyam. This, despite poor returns from parking fees.

Unique food and beverage options was also a key focus as it was seen as an important part of enhancing customer experience. All of it were made in-house to rein in costs and maintain quality. This began to make sense as footfalls began to grow sharply when Reddy deployed the successful model to other properties.

Constant innovations with customer at heart be it “Blind Date” or “Do Not Disturb” shows endeared SPI Cinemas to its patrons. Its average occupancy ratio of 80 per cent — highest in the country — is not surprising.

The sharp reaction among its customers when the news of acquisition came out (one patron even unsuccessfully tried to crowd source funds to take the company back from PVR) is because they fear watching movies at SPI Cinemas, especially at Sathyam, will never be the same again.