The announcement in the Karnataka budget to price movie tickets at Rs 200 in the state across multiplexes and single screens has made the cinema industry jittery over the impact on their businesses.
Movie tickets even in single screen cinemas on opening day of a movie ranges between Rs 250-300 while in multiplexes it goes higher especially for special formats touching even Rs 1,000 for big films.
If the cap on movie tickets is implemented, it will have a long-term negative impact on exhibitors, said Amit Sharma, Managing Director, Miraj Cinemas.
"Any product/service being governed by the government or any authority is not a good sign for that industry and it will always have a long term negative impact. Pricing of any product or services should be determined by the competition and not the government. On a short term basis, there will be a spike in cinema occupancy but it won't be good in the long term," he added.
Theatre owners are awaiting the final order and clarity on whether the price cap excludes special formats like IMAX.
However, they fear the cap will be implemented, spelling trouble for both single screens and multiplexes.
"The impact will be more on single screens. If there is a cap of Rs 200 and there is no differential pricing then the single screen audience might shift to multiplexes," Sharma said.
Bengaluru, a crucial market
The Karnataka market and specifically Bengaluru, is crucial for PVR Inox due to its urban population and high entertainment demand, noted Abhishek Jain, Head of Research, Arihant Capital Markets Ltd. He added that 12 percent of the PVR Inox revenue comes from Karnataka. "Bengaluru is a key revenue driver for multiplexes, making the Rs 200 cap impactful."
PVR Inox has 215 screens in Karnataka accounting for 13 percent of the exhibitor's total screen of 1,728. Overall South represents 33 percent of the exhibitor's total screens.
The company declined to comment.
"The cap will hurt exhibitors' economics. The rentals, the regular upgradation - all these are high cost elements so whether they will be matched with this pricing has to be seen. There are exceptions for big films in other states. Whether this will be replicated in Karnataka is to be seen," said Girish Johar, a producer and film trade expert.
Tamil Nadu and Kerala have also imposed price restrictions to make cinema more affordable, pointed out Jain. "While these caps have made movies accessible to a wider audience, they’ve impacted multiplex profitability, particularly for premium offerings like IMAX and 3D. The industry has had to adapt by increasing footfall and focusing more on food and beverage sales to compensate for lower ticket prices."
In 2023, the Tamil Nadu Film Exhibitor’s Association had pointed out how cap on ticket pricing was making it difficult for them to operate despite the south being a promising movie hub. The association had urged the state government to reconsider ticket pricing. Exhibitors had pointed out that price caps in the southern market limits the profitability and viability of premium format offerings.
The same year when Mani Ratnam-directed period drama Ponniyin Selvan-2 became the first film in Tamil to release in 4DX format (a premium format with special effects and motion-seats), cinemas in the state were not equipped to run the movie in the format. Audiences had to travel to nearby cities like Bengaluru and Kochi.
Tickets being capped is not a very good idea for the industry especially at a time when a sizeable number of Bollywood movies are not performing very well at the box office and Bengaluru is a good market for them, noted Vivek Menon, Managing Partner, NV Capital.
He pointed out that in major metro cinema markets like Mumbai, Delhi and Bengaluru movie ticket prices on an average are higher than Rs 200. Bengaluru had bucked the trend of price cap in southern states like Tamil Nadu, Andhra Pradesh and Telangana, Menon said. "Like Mumbai and Delhi, pricing has been dynamic in Bengaluru. It looks like the Karnataka state government wants to bring ticket prices at par with the other southern states. However, the Karnataka movie market is smaller as compared to these states," he added.
In Tamil Nadu ticket prices are capped at Rs 150 excluding goods and services tax and local taxes while in Telangana ticket rates for regular seats are capped at Rs 295 and at Rs 350 for recliner seats. In Andhra Pradesh, ticket prices are capped at Rs 177 and Rs 295 for regular and recliner seats respectively.
While Bengaluru is seen as an expensive movie market in terms of ticket prices, Sharma pointed out that the city's pricing is in the same range as that of Mumbai, Delhi and Pune where ticket prices on an average range between Rs 250 to Rs 350. "If you compare with Chennai then ticket prices in Bengaluru will always look expensive," Sharma added.
Affordable movie tickets
Girish Johar thinks the government's intention is right.
"Karnataka, led by Bengaluru is one of the most film friendly cities. It is a city where not only Tamil, Telugu, Kannada, Hindi, Hollywood but sometimes Marathi and Gujarati films also do well. Higher ticket prices makes it expensive for a large section of audiences and hence the government wants to make it affordable. Also, from habitual film watching we have gone to an event watching cinema. So if it is average content and it is affordable people will not mind going to cinemas. So, it will help medium and small budget films to attract an audience," he said.
Top producers and filmmakers like Karan Johar have also urged exhibitors to make movie tickets affordable. In a panel discussion last year, the film maker had said that cinema exhibitors are responsible for high ticket, F&B (food and beverage) prices.
Menon also said that there has been a demand from a lot of Bollywood production bodies to reduce the movie ticket rates since in some places the rates for tickets even exceed Rs 1,000 and it becomes difficult for the common man to watch movies in theatres.
"On the other hand, many of these screens have state-of-the-art viewing which is unparalleled and even better than western markets. So, the industry needs to come together to find a solution on what ideal ticket prices should be."
He added that the film and exhibition industry should be cognizant of the fact that many international theatre chains like AMC, Cineworld have not been in the best of shape in spite of having more than 9,000 screens each.
"Globally because of the onslaught of OTT (over the top) platforms, theatres have not been in great shape. We need to take stock of this situation and ensure that the cinematic viewing experience at the big screen level continues and to achieve that the industry needs to come to a common ground and deliberate on the same on what ideal ticket prices should be," Menon said.
Girsh Johar also said that nowadays audiences think that if they miss a movie in theatres they can watch it on OTT. "So, to get the cycle going of habitual movie watching in cinema, affordability is important," he said.
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