An analysis of the High Court’s decision to increase ticket prices in cinemas around the State

The Madras High Court has directed the Tamil Nadu government to take a “realistic and rational decision” on cinema ticket prices in the State. It is almost a decade since the last revision of these prices, and like in any other industry, the costs of operating a theatre have increased tenfold.

Today, the state has the lowest “official ticket price” in the country. The highest ticket rate varies from Rs.25 in a C station single screen, to Rs.40 in non air-conditioned screens, Rs. 95 in miniplexes and Rs.120 in multiplexes. For the government, cinema should remain affordable to the common man. They have even doled out incentives like tax exemptions for films certified ‘U’ and those with Tamil titles.

The Madras High Court, in its order on a PIL filed by the Tamil Nadu Film Exhibitors Association, noted: “Merely to state that nothing has changed in the last 10 years begs the question, as it can hardly be disputed that on various accounts costs have increased, including basic aspects like electricity cost, DA payable (to employees), entertainment tax, etc. We are thus not satisfied with the disposal of the representation made by the petitioners to the government, and thus direct that fresh consideration should take place, based on the parameters set out by the petitioner, and a decision should be taken within a maximum period of one month.”

The Tamil film industry is upbeat about the HC intervention, and believes that a hike in ticket rates is imminent. However, no representative from the exhibitors association was willing to be quoted, as they do not want to rub the government the wrong way. A leading exhibitor says, “Whenever we have raised the issue regarding ticket pricing, it has been shot down. But now, we are hoping the court gives us some kind of relief.”

Tamil film historian and actor, Mohan Raman, says, “Cinema is yet to be seen as a commercial activity. The only parallel is the sugar industry, where nationally, the government controls both input and output price at the ration shop. I often wonder why health and education sectors are given free pricing but not cinema.”

The stories doing the rounds are that ticket prices will be doubled. A leading multiplex operator says, “We are looking at an increase of Rs. 30 to Rs. 50 from the present ticket price of Rs.120. Due to low ticket prices and the craze for cinema, Tamil Nadu has the highest footfalls among multiplexes in India. We would like to maintain that with a small correction in pricing. But remember that Chennai city ticket rates will never ever be as high as other metro cities, such as Mumbai or Bangalore. But more than anything, we are looking at flexi ticket pricing (different pricing for weekends and normal working days) and also flexibility to have a number of shows, depending on demand and supply.”

Tamil Nadu exhibitors, distributors and producers feel that the Kerala model is best suited for Tamil Nadu. In Kerala, there is a flat entertainment tax, irrespective of content or language, flexible ticket pricing and a single window for theatre licensing. In fact, from 408 screens in 2014, the numbers have gone up to 516 by September 30, 2016. National multiplex operators are falling over each other in their attempts to acquire screens in a State, where nearly 15 screens are run by the State Government. Now, the Kerala government is insisting on total computerisation by theatres and transparency in box-office collections, which is being opposed by vested interests within the industry.

Theatre owners feel that any film brings in 85 to 90 per cent (depending on the star cast) of the film’s total collection in the first three days. So, if a film does not do well, then the stake holders should be given leeway to sell tickets at discounted rates.

But for some single screens outside Chennai city limits, it just does not matter, as they have been selling tickets at higher rates in connivance with local authorities. For multiplex operators, there are other revenue streams. More than 50 per cent of their profits come from concessions (food, beverages, advertisements, hosting promotional events, parking etc). Chennai is the only city where combo deals (popcorn + cola) cost more than the ticket. The lucrative online advance booking, for which most theatres charge Rs.30 per ticket, has become a bone of contention between exhibitors and the trade. The Tamil Film Producers Council has been repeatedly asking multiplexes to share this amount with them, as Internet booking now accounts for almost 80 per cent of the total sales in Chennai city.

Meanwhile, mutually agreeable deals are being secretly worked out between the theatre association and the officials concerned, to go with the court ruling. The idea is for a marginal increase in ticket rates without burning a hole in the audiences’ pocket.