AT: No, ticket prices are not low anywhere. Today, Kolhapur is a Tier II city.
RA: What’s the average ticket price of single-screens there?
AT: Around `80-` 100.
RA: And, here, we are paying more than `500.
AT: No, no, no even in the big cities, single-screen charge `80-100.
PJ: In Mumbai, single-screens charge `200.
SK: You are right but the contribution and the difference between ticket prices is different.
VK: Are you saying that single-screens that have really good infrastructure are still suffering?
VK: For want of content.
AT: Today, the guys who are surviving are the new single-screens. They are well constructed. So people will watch films there. Right now, because films are not working, they are even getting English products, which don’t work everywhere.
AT: They need a wider range of products so that there is wider choice. Here, there is none.
PJ: Then good for them.
AT: Very good. It’s fantastic but it’s very limited.
VK: The fact is, single-screens that have good infrastructure are making money and those that have poor infrastructure are not. The answer is to improve infrastructure.
AT: Absolutely! But they have to invest so much, which they can’t afford. What I am saying is affordability is difficult.
VK: Are you suggesting that we help these cinemas to develop their infrastructure?
AT: In a way, yes. Everything is subsidised. As he was saying, the transmission cost is reduced. There are many factors involved. If everything works in their favour, why wouldn’t they agree? Who would not want to make money?
RA: The genesis of this payment to UFO or payment to Scrabble was that we would support the exhibition of movies. The reason we are paying is because the EMI payment to the integrators allows them to provide discounted rates to cinemas.
NA: Anil, I am talking about taxes now. I am moving the whole conversation: do you know service tax is levied on certain cinemas in certain states? Are those single-screen owners even utilising service charge correctly?
AT: They are surviving only on that.
NA: They are surviving because they are counting it as revenue rather than using that money to upgrade their cinemas.
AT: Because they are not being able to cover their costs. Take any single-screen cinema, Nandu, where an English film does not perform. Their average is so low that they are investing their own money to keep the cinema running. There was an exit clause for single-screens. So why doesn’t the owner sell? But they cannot do that.
NA: Why don’t they upgrade their cinemas?
AT: Because he cannot afford the situation he has been in over the years.
SK: You just said there are so many good single-screens. How are they surviving?
AT: Because he thinks that his property is worth so many crores, he is afraid of doing that.
RA: There are other infrastructure issues as well, like entertainment tax. You have an exit clause in certain states.
PJ: Mukta has recently upgraded many of its single-screens to twin screens.
SK: If I want to exit this business, there is no way to do it in certain states.
PJ: Even in Maharashtra.
SK: Because it’s like that, even a new investor will not invest in this business.
RA: But when you invest in cinemas and you start getting returns… we have even seen some proof of this.
SK: My point is simple… if there is an exit clause, I would say that I will renovate my cinema and make so much more money, but if I don’t renovate, I will make X amount of money. And then I will decide whether I should renovate or shut. When you give that option to exit automatically, what happens is that the money with fresh investors is what I would like to get into this industry. That way, more investment will also come in. Then I can either go to retail or close it tomorrow, if it doesn’t work. As things stand today, I don’t have an option.
AT: No, but as distributors, we can’t do anything about it.
SK: No, we can’t.
PJ: It has to start from the top.
AT: The government needs to make policies.
PJ: That’s why Nandu was saying if GST comes in, it will help the industry.
AT: I feel Welcome Back should run for 100 weeks everywhere and we get that opportunity. So Nandu, we wish you all the very best.