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The Chennai government apparently has fixed a ceiling for the upper end for prices in multiplex theaters in Chennai at Rs 50. Is it remunerative, can multiplexes still operate there and make money? Deepak Asher, Director of Inox Leisure tries to answer the question.
The Chennai government has apparently fixed a ceiling for the upper end for prices in multiplex theaters in Chennai at Rs 50. Is it remunerative, can multiplexes still operate there and make money?
Deepak Asher, Director of Inox Leisure tries to answer the question. He says the new investments in multiplexes are not viable with the Tamil Nadu government ticket price cap.
Excerpts from CNBC-TV18's exclusive interview with Deepak Asher:
Q: You have a property coming up in Chennai, but does this change the equations a bit, the kind of pricing which the Chennai government is talking about?
A: We do have a property coming up in Chennai, in fact it's built and ready to begin operations. We are just waiting for the last leg of permissions to come in.
As far as the notification is concerned, it applies not to just Chennai, but the whole of Tamil Nadu. There are different levels of prices which have been kept, depending on whether it is in Chennai or a smaller town or city and on whether it is an air conditioned cinema or otherwise.
To answer your question, no, I don’t think with this kind of ticket prices new investments in multiplexes are going to be viable at all. In fact, our calculations show that at these price levels, multiplexes will operate at a loss and therefore we are trying to persuade the government to relax this notification at least for new investments in multiplexes.
Q: If you fail to persuade the government, will you want to start the Chennai facility at all?
A: I wouldn’t say that and I think its speculative to assume that we would fail to persuade the government. I believe Tamil Nadu is the torch bearer of the entertainment industry in this country. It has a very strong cinema-going culture and I am sure the Tamil Nadu government will do everything that is necessary to induce new investments and exhibition infrastructure.
May 18 2013, 17:26
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May 17 2013, 12:39
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