Budget 2021: Exhibitors seek capacity expansion, content creators want more clarity on regulation

In 2016, when Satyajit Ray’s son went to the Bhowanipore area in Kolkata, he was distraught to see two iconic cinema halls that once featured his maestro father’s classics, shut down forever. A newspaper quoted him as saying he was `heartbroken’.

But if cinema halls faced an uncertain future then, stampeded by the arrival of fancy multiplexes, the threat of COVID-19 is an altogether different proposition.

India has already seen closure of about 1,000 theatres in 2020 due to the impact of the pandemic. To save the rest from disintegration, harried cinema owners are seeking relief measures from the government in the upcoming Budget.

Manoj Desai, Executive Director of G7 Multiplex, which is also known as Gaiety Galaxy and Maratha Mandir, a single screen theatre, told Moneycontrol said that the 50 percent capacity inside the halls is 'killing the exhibition space.'

Siddharth Anand Kumar, Vice-President Films and Events, Saregama, piled on his woes. He believes that the Centre should let state governments decide whether they are comfortable in letting theatres operate at 100 percent capacity or not.

"While content production is continuing, the problem is with distribution. The issue here is that there are four to five platforms who buy content as other mediums are struggling. Power is getting concentrated in the hands of few, which will hurt the entire industry as prices (of content) will come down," he told Moneycontrol.

When theatres had shut shop for as long as seven months last year, many films were directly released on video streaming platforms like Amazon Prime Video and Netflix, among others. Even big star releases like Akshay Kumar's Laxmii and Alia Bhatt's Sadak 2 premiered first on the over the top (OTT) platform.

Analysts also point out that OTTs paying premiums for direct to digital releases is not sustainable.

Unhappily, Desai narrates the struggle that he currently faces. "In the last 10 months, there is hardly a picture that has worked. We see not more than 10 to 20 people coming to theatres every day. After the Coronavirus outbreak, only 10 percent public is coming to theatres. The number of shows has come down. I run only two shows currently. I am yet to see any profits and don't know how to handle the theatre and the staff," he points out.

Desai’s only hope, he adds, is if "We can see some recovery in the next six months only if there are good films and no 50 percent restriction."

Content regulation

Another exhibitor, Vishek Chauhan, who runs a single screen cinema in Bihar, said that he is also expecting the government to introduce uniform censorship for all platforms, including theatre, television, and OTT platforms.

Even Saregama’s Kumar said that a clear set of laws will make things easier for filmmakers. "Content makers are entrepreneurs. They will adopt and adapt. So, it should be clearly stated what is allowed and what isn't," he explained.

Hoping for less tax troubles

Chauhan also listed relief measures like GST waiver, soft loans and the central government taking care of Employees' Provident Fund (EPF) for at least a year for single screen cinemas.

Movie tickets exceeding Rs 100 attract a GST of 18 percent and those up to Rs 100 fall in the 12 percent tax bracket.

In addition to the above-mentioned relief measures, Desai is also hoping that the government will waive off taxes to help the theatre space.

The 50 percent capacity inside the halls is 'killing the exhibition space'

- Manoj Desai

While electricity charges are a state subject, a delegation from the film industry, which recently met Finance Minister Nirmala Sitharaman, requested the Centre to waive off these charges ahead of the Union Budget 2021.

Sharing similar sentiments, veteran producer Anand Pandit said: "We are waiting for the government’s decision to let multiplexes and cinemas operate at full capacity. A downward revision of GST rates will go a long way in helping the cinema space along with steps like a license fee waiver, fast tax refunds, lowered electricity rates and interest free loans."

Support to content creators

When it comes to content creators, Kumar expects that there should be schemes for smaller filmmakers. Earlier, the government supported filmmakers to the tune of 50 percent of their budgets and for the rest, help would be taken from private players, he said.