Movie tickets get cheaper in Karnataka as theatres implement new price cap of Rs 200

Also read: Rs 200 movie ticket cap in Karnataka threatens Rs 2,000 crore investment, exhibitors fear shutdown

A check on platforms like BookMyShow show that most cinemas have ticket rates of Rs 236 that includes goods and services tax (GST) of 18 percent.

Is the price cap viable for theatres?

Mendiratta said that the kind of infrastructure multiplexes in India have is better than global standards. Quality cinemas come at a cost, he said.

"We are making more premium cinemas and such cinemas involve high capex (capital expenditure). Hence, the cinema owners should be given the liberty to decide ticket pricing."

He added that the average ticket price of multiplexes is Rs 230-240 and rates go up when there is a big movie release or if the movies are releasing in premium screens.

"One IMAX screen costs Rs 10 crore. We cannot take away the ROI (Return On Investment) of the particular format. This way we cannot offer quality cinemas. The quality of cinemas will degrade in the state."

A single screen exhibitor concurred. "This cap will leave no scope of development and will kill theatres further. Bengaluru has the best of multiplexes, highest number of IMAX and this growth will stop with the cap coming into effect."

Also read: Rs 200 ticket fallout: Karnataka’s move could dent PVR Inox revenues, exhibitors urge for dialogue

The theatre owner pointed out that single screen cinemas in the state have come down to 400 from 1,200.

"The remaining (single screens) will also vanish. Existing exhibitors will have to rethink their business and may even have to opt for other business."

He noted that India is lacking nearly 1 lakh screens for its population despite high production of content in different languages. "Just count the cinemas in Bengaluru North from Hebbal to airport count and you will find very few theatres."

Exhibitors also pointed out the high rent for cinemas. "Rent is high reaching over Rs 100 per square feet," the single screen exhibitor said.

Existing properties are already functioning with rentals which are already decided ranging between Rs 100-150 per square feet. "No theatre comes with small infrastructure. They are built in a 40,000-50,000 sq ft area. So, rentals go up to Rs 60-70 lakh. But developers will not agree to lower rentals because now there is a ticket price, said Mendiratta.

Miraj, which has 15 screens in the state that contributes 15 percent revenues to overall business, expects the contribution to go down by 2-2.5 percent.

"Where I was working with 50 staff, it will come down to 40," the MD said.

Are theatres challenging the cap?

The single screen exhibitor noted that Multiplex Association of India (MAI) and Santanu Pai, a shareholder of PVR INOX have written a petition against the price cap. Moneycontrol has seen the copy of the petition in which the association has highlighted the challenges exhibitors will face due to the state government's move.

"Sudden reversal of policy without consultation or study.... deters future investment, and arbitrarily singles out multiplex cinema operations while leaving other comparable sectors like airlines, railways, and cab services unregulated. Such selective targeting, lacking intelligible differentia or rational nexus, is unconstitutional," the MAI petition said.

Furthermore, the price cap threatens severe economic consequences, including loss of approximately Rs 225 crore annually in GST revenue, decline in property tax collections from depressed rentals, and adverse multiplier effects on local economies, employment, F&B vendors, mall activity, and Kannada film revenues. With fixed costs such as rent, power, and salaries unchanged, the cap renders cinema operations unsustainable leading to closures, job losses and fiscal loss to the state, the petition added.

It is also pertinent to note the amount charged for a movie ticket includes the tax to be paid to the government and the producer's/distributor's share, the petition said. "It is only the sum that remains (which is less than 40 percent of the ticket price) that is part of the multiplex's revenue. If the ticket prices are capped, the revenue of the multiplex would suffer drastically and put the multiplex at a significant commercial disadvantage."

 What does the Karnataka government have to say?

The legal counsel appearing for the state government pointed out the state Budget speech of March 7, regarding caping of ticket price and said, "This is done in the interest of general public."

What is exempted from the price cap?

The cap will not apply to multi-screen cinemas with premium facilities of 75 seats or fewer.

The petitioners said that it is pertinent to note that multi-screen cinemas with premium facilities of 75 seats or less are exempted from the price cap. There is no rationale whatsoever to have an exemption in relation to 'multi-screen cinemas with premium facilities of 75 seats or less'.

"It is pertinent to note that the so-called exemption which is also manifestly arbitrary, will only include screens like PVR INOX'S Director's Cut, Lux Insignia, Gold Screens, however, it will fail to include some of the other "premium facilities" such as 4DX Screens, VIP Halls, which all have a capacity of more than 75 seats," the petition said.

What Karnataka moviegoers are saying?

One X user said that PVR Inox tickets in Bengaluru are available at a max rate of Rs 236. "The only best decision by Congress govt in Karnataka!!"

Another user said, "At Rs 236 per ticket, what can we expect? Uncleaned theatre seats, dirty toilets....They can't afford costly perfumes. Caramel and Pop corn bits on seats due to reduced cleaning staff. Broken 3D glasses."