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Screen Wars

satwik-leleSatwik Lele, Chief Operating Officer, Mukta A2 Cinemas

If you compare the scenario five years ago to how things are today, you will find a drastic change in all aspects. Quality has risen to another level in terms of sound and projection, due to developments in technology. There are issues in getting licenses and permissions, also real estate development is slow and that’s the major reason for the slow growth in cinemas. There are many cinemas which are all set to open but due to license issues, they have to postpone it for months or sometimes even more than a year.

We are a country of movie-lovers. The number of films made every year and the number of screens across the country is a testimony to this fact. According to the Film Federation of India, there are over 10,000 screens across the country, which is the second largest in the world, only after the US and China. But not many movie-goers are aware of the rules that cinemas have to follow.

The Constitution of India puts cinematography both in the Union List and State List for different purposes. While the central government is given the authority to certify films for exhibition (Censor Board), the state government is given the authority to regulate cinema halls, the norms governing them, admission fees in etc. Seating, noise levels, toilets and water, show timings and show rules, acts and laws to be followed by theatres and safety are some really important categories we have to observe and are different in every state.

I remember there was a time when single-screen movie theatres were hallowed spaces. The ticket window, now known as box office, used to be treated as a holy place. In the late ’70s and early ’80s, it was all but impossible to get a movie ticket in open booking. For a film like Kranti (the biggest hit of 1981), there were no tickets available for 10 weeks.

The rush for tickets could cause traffic jams, and it was not easy for the police to handle the chaos around single screen theatres. In this day and age of online booking and multiple shows a day, this scenario might seem highly unlikely, and no one even thought that movie-viewing would become the spontaneous activity it is today, whereas earlier it was considered an occasion.

But times have changed and so have the fortunes of single-screen theatres. Today, they are widely considered a dying breed, unable to keep up with the competition offered by multiplexes, favoured by neither the trade nor viewers. Big cities such as Delhi and Mumbai have seen the shutting down of iconic theatres. In Meerut, there used to be 23 single-screen theatres through the 1980s and 1990s. Today, there are less than
a handful.

Multiplex exhibitors have to keep pace with timely technology upgrades and upgrading infrastructure comes at an enormous cost, digging a hole in operating profits. This, while the average ticket price remains stagnant. The cinema exhibition industry is categorised as a ‘SIN’ industry and thus exhibitors face issues with first acquiring a cinema license to run the business and then renewing the licenses annually

In Maharashtra alone, there are 100-120 small/big permissions and NOCs that have to be obtained to run a cinema. Need I say more?

tinku_sir_1Tinku Singh, Group President/CSO, SRS

India is a land of movies. It makes more movies than any other country, roughly around 1,500 annually. Indians are famously fanatical about movies and their movie stars. Yet, India is plagued with various maladies affecting the movie business.

With just one screen per 96,300 residents, it is the world’s most under-screened major territory. Due to such deep shortage of movie theatres and screens, many of India’s moviegoers are simply unable to see movies in the theatre.  The real estate market is down from last two years, which has directly affected the construction of malls. The revenue collected from these theatres is mediocre. Modern multiplex cinemas can charge ticket prices that are double of single-screen theatres. As they operate more efficiently, multiplexes can generate higher capacity yields and revenues per seat. India’s diversity proves to be a bane, producing films in more than 20 different languages. The regionalization, and linguistic politicisation, of the country’s movie business saps its overall strength. The average production and marketing costs are higher and profits are lower than they would be if India’s film industry was more integrated. Piracy is rampant here with hawkers selling illegal DVDs freely. Also, unlike any other business in India, movies must pay entertainment tax, which seem to classify them as a frivolous activity. Outside the ambit of a necessary service, they must also pay service tax, which implies they are necessary.

Alongside that, entertainment tax falls under the purview of the state government and is different for each state. Plus, there are huge licensing issues to set up a new multiplex. Also, the Indian market is price sensitive, with a sealing set on ticket price in some states.

While major single screens are converting in to multiplexes, some single screens are also adopting new technologies and running the business. Also, single screens should convert themselves as heritage property like Raj Mandir in Jaipur, Priya in Delhi, Maratha Mandir in Mumbai.

Malls have emerged in cities and small towns. Sometimes only a few shops are operational in a multiplex attached to mall. This impacts the business as well as consumer experience. Some malls have parking issues, which restricts footfalls. Public transport is an added issue at some of the places which also leads to loss. Malls are emerging in tier-II and tier-III towns, yet unavailability of Internet Service Providers proves to be an hindrance, with online tickets being a huge thing these days. In smaller places, there are restrictions in terms of seating and the number of auditoriums.

A lot of amendments need to be done to The Cinematograph Act. The act, catering to the single-screen era needs law as per multiplex business. India, being a diverse nation, entertainment tax falls under state government and is different for each state. Licensing woes keep multiplying, especially if that multiplex is first one in the state.

Licensing issues are grave for an Indian movieplex owner. Opening a new multiplex in an unchartered territory needs a lot of strings to be pulled. Without connections in the upper echelons, it is nearly impossible to open a multiplex in the current scenario.

Box Office India
Collection Chart
As on March 25th, 2017
FilmsWeekWeeklyTotal
Machine1
3.05Cr
3.05Cr
Trapped
1
2.14Cr
2.14Cr
Aa Gaya Hero1
1.13Cr
1.13Cr
A Perfect Guest - PG
1
20K
20K
Mantra25.21L5.21L
Beauty And The Beast29.70Cr9.70Cr
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