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Bollywood insiders react to Maharashtra government's decision to allow outside food in cinemas

Would the proposed new rule on F&B in cinemas force multiplex owners to revisit their revenue models?

If there’s one thing that unites all Indians, it is the craze for films. We have revelled in this love affair for decades and, despite technology offering newer forms of entertainment, the joy of watching a film in a movie theatre has not diminished. After all, watching a movie is much more than just a viewing; it is an outing often enjoyed by families.

The only complaint that has tainted this experience is its price tag. In many theatres, especially multiplexes in urban cities, ticket prices are a cause of concern for consumers. Add to that the often outrageous cost of food and beverages inside theatres, makes matters even worse.

Taking a step to address this issue is the Maharashtra government, which announced last week that it might lift the ban on patrons bringing outside food into multiplexes. The Multiplex Owners Association has released a statement, saying this rule has not been communicated to them by the government or any other authority. But even though the matter is yet to be sorted, a debate is raging on whether or not the ban should be lifted.

We spoke to the stakeholders affected by this proposed decision – multiplex owners, distributors and producers – and asked them for their take on a likely ban and how it might affect the cinema-going experience for the audience. Here’s what they had to say:

Mukesh Bhatt, Producer

The announcement by the Maharashtra government will not affect the cinema-going experience at all. Movie-goers will be very happy. They have had no choice but to pay a fortune for snacks at movie theatres. Now it seems things will become easier for them.

The move will also attract more people to theatres. India is a very cost-sensitive country. When a middle-class family goes to the theatre to watch a film, it costs them a few thousand rupees, at least. This includes travelling, buying snacks and movie tickets. This new announcement will save lots of money for salaried people. If they used to watch one movie a month, they will now watch two.

This will not affect the ticket prices, which will remain the same. Multiplexes will not change ticket prices as they are not determined by snacks and all. The central government charges 28 per cent from cinema halls, which is too steep and should be brought down to a flat 18 per cent for all cinema halls. Entertainment is more of a luxury than a necessity. It is important for the government to show a little leniency and charge 18 per cent as GST. The cinema-going experience is not harmful as is the consumption of tobacco or alcohol that the government should impose a 28-per cent tax on it.  

Jayantilal Gada, Producer

This is bad news for both the film industry and multiplex owners. If multiplexes earn less, it would put pressure on films. Look at it this way, when you travel by air, you cannot carry alcohol from outside the airport. You can only buy it from duty-free shops inside the airport. Moreover, a lot of people patronise multiplexes. How can everyone’s bags be checked for food and beverages? 

Further, outside food items can cause a mess inside the theatre and the cleaning process will take a lot of time. Lack of maintenance was one of the reasons many single-screens shut down back in the day. This opened up multiplex chains.

I agree that this rule is beneficial for the audience, but nobody is forcing movie-goers to buy popcorn at multiplexes. As it is, only 10-20 per cent of the audience buys popcorn. Moreover, the run-time of films has been reduced, from around 3 hours to 2 hours.

People eat food inside a cinema hall for a wholesome movie-watching experience. It is not like they will starve if they don’t eat or drink while watching the movie. To compensate, if multiplexes increase ticket prices, that would be a bad idea too.

It is very difficult for small films to survive at multiplexes, as opposed to star-studded films. Their prospects will be even bleaker. On the other hand, if ticket prices are hiked and there is even more pressure on theatres, other avenues will open up. That is one reason why digital is flourishing so much.

Balkrishna Shroff, Distributor, Mumbai

There is a case pending in the Bombay High Court on this issue, so everything depends on the outcome. Unless it is passed as a law, it has no meaning. If the verdict goes against exhibitors, they will appeal in the Supreme Court. If we assume that they lose in the apex court too, it will have repercussions on ticket prices. The price of admission will go up.

Food and beverage is 25 per cent of a cinema’s turnover, which includes a 70-per cent margin. I think most people are not aware that when a government issues a theatre licence, it includes a food and beverage licence. In that sense, a theatre is like any other restaurant and one cannot ask a restaurant to reduce its prices.

Well, if people don’t want to spend that kind of money in multiplexes, they have the option of watching the film in a single screen theatre. It’s like walking into a five star hotel and then complaining about the prices! Don’t you already know what the prices are like?

Moreover, no one is compelling movie-goers to buy snacks at the cinema hall. One may eat before and/or after watching the film. Most multiplexes are located in malls, which have food courts.

I find the new government rule ridiculous. We still need thousands of multiplexes in India. We have only about 3,000 screens in India, compared to China, which has 30,000 screens. The business of Dangal was `350 plus crore in India, and `1,200 crore in China because of all the multiplexes. The business of Secret Superstar was `60 crore in India and `400 crore in China. We should aim for that kind of business. If you suppress multiplexes with laws like this, it will place serious curbs on these entertainment hubs. Ultimately, the film industry will suffer. We need more multiplexes.

Manoj Desai, Executive Director, G7 and Maratha Mandir

We have always allowed people to bring outside food items into our theatres, at Gaiety Galaxy and Maratha Mandir. We do check their belongings for security reasons but not for food items.

Multiplexes make far more money from F&B than they do from the box office. We sell the same popcorn at my theatres for `20 that they sell for `120. We sell two samosas for `30, whereas they charge `100 for the same. They sell movie tickets for `400 each. I do not charge more than `100.

Lifting of the ban on outside food will not impact ticket prices at multiplexes. On the contrary, more people will turn up to watch films. When a middle-class family goes to the movies, it takes a chunk out of their budget, and many cannot afford this more than once a month. Both the ticket prices and the cost of snacks should be affordable, so that movies are within easy reach.

Rahul Puri, MD of Mukta A2 Cinemas

Almost 35-40 per cent of revenue is generated by the food & beverage segment for multiplexes, which makes this a high-margin business. For a company like Mukta A2 Cinemas, 25-30 per cent sales are contributed by the F&B sector. Since a final verdict is yet to be pronounced by the court, the government must engage with multiplexes before passing any statement on this issue.

Akshaye Rathi, Distributor and Exhibitor

The Maharashtra government has not lifted the ban on carrying outside food into cinema halls. Someone has filed a PIL in the Bombay High Court against the high prices of edibles and the ban on carrying edibles into the cinema halls. The High Court has directed the state government to come up with suggestions on this. A decision will be taken by the court on July 27.

If the court directs multiplexes to allow outside edibles inside, it could spell disaster because who knows what people might smuggle in? When Gadar: Ek Prem Katha played at a cinema in Maharashtra, somebody carried kerosene in a bottle of water inside. When Amrish Puri said “Hindustan murdaabaad!” this guy threw kerosene on the screen and set it ablaze.

It is not practical to assume that a security check would unfailingly detect inflammable and other such substances from making it inside a cinema. Films like Ae Dil Hai Mushkil and Padmaavat drew protests from the public. Vandalism can kill people if patrons smuggle in inflammable substances in, say, their tiffin boxes. Security could be hugely compromised.

Then there are religious considerations. One of the major multiplex chains is run by a Jain family and so they don’t serve non-vegetarian food inside. If patrons are allowed to bring in what they please, they could easily smuggle in non-vegetarian snacks.

Cinema halls and exhibition centres in India are private enterprises. No government grant or rebate or subsidy is given to this sector. As long as no benefits are given by the government, multiplexes should not have to be boxed in by such rules. Cinemas are entitled to grants. The cost of operating a cinema hall is insanely high. That is why they need to sell their products and tickets at rates fixed by them.

Quality comes at a cost. It is up to the audience to decide how much they are willing to pay for what grade of quality. It is that simple.

Raj Kumar Gupta, Director

We need to look at the real implications of this announcement. Of course, we know that the cost of edibles inside cinemas is high. But how much the new rule will affect the movie-viewing experience is something we can gauge only after it comes into play. If people have the freedom to get food from outside, then we do not know whether they will watch the film or keep eating. We will only get to know the real impact on the cinema-viewing experience when the rule is actually implemented. We need to wait and see whether or not people will be civil about this. I hope this new rule does not raise ticket prices, though.

Siddharth Anand Kumar, Vice-President, Films and Television, Saregama (Yoodlee Films)

I think the exhibition system in our country is partially responsible for the demise of sensible cinema. This is due to their own pressures and economies and not out of a need to sabotage. Instead of addressing this problem in a holistic fashion by reducing GST impact and encouraging cinemas to lower ticket prices and fixing the broken censorship regime, we have a regime that is creating further havoc by superfluous and trivial populist measures such as this. What a pity! It can only lead to the worsening of the situation.

Vinod Bachchan, Producer

This was a much-awaited decision, especially for consumers. Food and beverage prices at theatres are so high that a tub of popcorn exceeds the ticket price, at times too. These prices make the entire movie-going experience extremely expensive for the average consumer. With ticket prices rising with each film and escalating F&B rates, a family outing to the theatre costs thousands of rupees. This is a real dampener and it often discourages families from watching movies at cinemas.

Allowing patrons to carry their own snacks or forcing multiplexes to make food and beverages affordable will bring down the cost of an outing and encourage more people to come to watch films in theatres. This will benefit both theatres and producers. I think this rule should start a conversation, where both sides can reach a middle ground that would benefit all parties, including the audience.

Rajesh Thadani, Distributor, Mumbai

If the proposed law is passed and if outside food is allowed inside cinemas, it may encourage more people to watch movies in theatres, especially those who were deterred by the cost of snacks and drinks served inside. But I also believe there should be some checks and balances or else who knows what people might bring into theatres! This would cause all sorts of problems, including serious littering issues.

There are both pros and cons to the proposed rule. If the multiplex can manage the maintenance issues that are bound to crop up, then I guess it’s fine. On the other hand, multiplexes could drop the prices of their food and beverages, so that people are not tempted to get outside food into theatres. Alternatively, if they are forced to allow outside food in, they could raise ticket prices to keep out people who could cause a nuisance with food.

Sanjay Surana, Exhibitor, Pushpa

This is very unfair on the part of the government. They cannot force five-star hotels or airports to reduce their food and beverage prices because their investment and maintenance costs are very high, so why force multiplexes to drop their rates? This will not be viable. If people are allowed to bring all sorts of edibles into cinemas, one dreads to think of what will happen to the carpet and upholstery.

Footfalls have already plummeted in cinema halls, so I don’t think the proposed new rule will impact ticket prices. Nothing will change, except maintenance costs for exhibitors.

Arun Dubey, Theatre Owner, Chitra

If people are allowed to bring food into cinema halls, it would pollute the theatres. Who knows, they may even try and smuggle alcohol inside, and this would be disastrous for the rest of the audience. This could cause major maintenance issues for theatre owners and also increase the gap between shows as it would take up more time to clean up the cinema hall. Another fallout is a possible increase in ticket prices as revenue from F&B will fall while maintenance costs would go up.

Sanjeev Vira, Theatre Owner, SM5

This is a wrong move because it is bound to cause a mess in the theatres. People might toss things on the floors and the seats are likely to get stained with food. Moreover, the odour of food would disturb other patrons. With revenue from food and beverages declining, ticket prices may increase a little to compensate for this loss.

Instead of allowing patrons to bring outside food inside theatres, the government should impose some price restrictions on the food sold inside theatres. One way to do this is to make sure they sell F&B at MRP prices. In some theatre chains, the price of snacks is outrageously expensive. At present, F&B profit margins are as high as 60 per cent.

If the new rule does take effect, I don’t think it will make a difference to the number of people coming to theatres because people come to watch films, not to eat. There are many who never eat anything inside theatres and come only to watch films. Collections will not be affected because if a movie is good, it will ring in good collections.   

Sethumadhavan Napan, Producer, DAR Motion Pictures

In the recent past, most multiplexes have been staying profitable mainly due to F&B sales rather than from the sale of tickets. So this new move is likely to cause a huge impact on their revenue model. Yes, it is a welcome relief to the price-conscious consumers but it could also be a dampener for a certain section of the audience who would feel a sense of devaluation of the whole ‘movie-going’ experience.

This move could generate more footfalls in some cinemas but what one can say for sure is that it would impact the cinema-going experience as all of a sudden, one will experience a lot of noise and distractions of various kinds as people will be busy digging into their food containers.

Will it impact ticket prices? It’s too early to tell. If the revenues of theatres/multiplexes are compromised, they may be forced to revisit their ticket pricing.

 

Bhakti Mehta, Bhavi Gathani, Titas Chowdhury

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