For decades, movie theatres in India have resolutely refused to let people bring outside food into halls, but a startup seems to have made them finally relent.
Zomato has begun delivering food to customers in cinema halls while they’re watching a movie. The company has tied up with PVR Cinemas, and is currently running the pilot in several halls in Gurugram. “Skip the queue — at PVRs, now order from your seat on Zomato,” shared Sahibjeet Singh Sawhney from Zomato’s marketing team on Linkedin.
Zomato is also running promotions to publicize the initiative in movie halls. “‘Who killed Mr. Queue’, says a standee in the form of a movie posted that’s placed at a PVR hall. “Skip the queue, order from your seat on Zomato,” it adds.
Now this is an unusual partnership. Movie theatres famously make as much as 25 percent of their revenues from food and beverage sales, and jealously protect this territory — they don’t allow outside food to be brought into halls, and have even prevailed in the courts over this issue. PVR, though, seems to be allowing Zomato to deliver food to patrons right to their seats.
It would appear that Zomato would likely be compensating PVR to be able to reach its captive customers. While it’s unknown what the terms of the partnership are, Zomato would need to not only compensate PVR for the loss of sales that would’ve otherwise happened through PVR’s own food choices, but also somehow compensate them for the margins — the margins on movie food are massive, with popcorns often selling for as much as Rs. 500 a pack. Margins on Zomato’s food would likely be considerably smaller, and would mean lowered overall revenues from food and beverage sales at theatres.
It’s hard to understand what either party could be gaining from this deal. PVR is likely giving up sales of high-margin products and replacing it with low-margin products on Zomato. Zomato, on the other hand, wouldn’t gain very much either — PVR’s customers likely already know about food delivery apps like Zomato, and wouldn’t necessarily switch to using Zomato once they’ve left the theatre.
The only reason why Zomato could possibly experiment with such a promotion is to eke out any bit of possible growth in its food delivery business. The food delivery market for Zomato and Swiggy is plateauing, and these companies are no longer able to grow at the annual rates that they were able to a few years ago. As such, both companies are looking to get creative in growing the market through any means necessary — Swiggy has recently partnered with IRCTC to deliver food on trains, and Zomato now seems to be targeting the even smaller market of delivering food in cinema halls. It remains to be seen if these initiatives can help these companies grow their topline numbers, but customers wouldn’t be complaining — the movie theatre, which was one of the last bastions where food delivery apps didn’t dare tread, finally seems to have been breached.