The growth in the number of screens is far less than hoped for and this negatively impacts return on investment (ROI). The ratio of screen-to-people is much higher in countries like the US and China, where ticket prices favour cinema owners. This is not the case in India.
First, land costs are very high, which doesn’t allow us to cover our costs. In a city like Kolkata, if a ticket costs Rs.200 or Rs.250, it is a deterrent unless it is a big film. So the ROI is impacted.
Also, each state has different tax policies, which affects the entertainment industry directly. Starting with land costs, labour costs, equipment costs and tax reforms, an exhibitor has to figure out the investments in each state and usually returns are not up to the mark.
It has becomes a corporates game, not the one individuals can play, but at the end of the day how much can corporates do? Earlier, we had large occupancy because individuals were involved. Now Bollywood has realised that an MBA graduate doesn’t understand the creative aspects of a script, so how can he green-light
At the end of the day, it is all about passion. Corporates can distribute films passionately; there is no doubt about that. Now we also see a decline in single screens due to lack of business. People are closing their theatres and are keeping them closed because, in smaller towns, there is little you can do even if you have a large quantity of land.
To tackle the high costs, we must solve the piracy problem, which is taking away 50 per cent of the revenue. Also, producers must not release their films on satellite for six months after the film’s theatrical release. That automatically forces the audience to come to cinema halls.
If they know the film is not too good, they will get to see it within two months on television. So if they can see it for free in two months at home, why would they go to a theatre or pick up a DVD worth Rs.60. Piracy and satellite rights have to be controlled.
Apart from the issues the business faces, there is one other thing – we, as an industry, need to unite. An exhibitor is a critical part of the film business as it is he who is in direct contact with the audience and he is the one catering the audience.
Movies are not doing well both in single screens and multiplexes because there is lack of good music in our films. Films like Aashiqui 2 were music-based and did phenomenally well. But, largely, in FY15 and FY16, there has been dearth of good music in our films. Producers and directors need to work on this.
The government has taken a step forward with the imminent introduction of GST. The tax structure will then become reasonable and unified. But the onus falls on exhibitors, to make cinema viewing experience comfortable for the audience and providing the latest technology at a reasonable price. It is therefore up to producers/directors to provide a choice of variety of genres. If this were to happen, it will be boom time in the industry again.
The growth of screens in India is slower than expected because there is a slowdown in the construction business and no new malls are being constructed by developers. Due to this, the growth of screens is currently restricted. Plus there is market consolidation underway – existing brands/operators are taking over smaller players by mergers and acquisitions or they are coming only in bigger towns. Hence the screen count is stagnant. Growth rate will pick up only when the construction business revives or when states offer incentives to construct new multiplexes.