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Unthinking Cap

On Wednesday, March 15, Karnataka Chief Minister Siddaramaiah presented the state’s annual Budget in Bengaluru. Among the many proposals in his Budget speech was one to regulate multiplexes by capping ticket prices at `200. 

Ostensibly, this decision is in response to public grievances against high ticket prices. Before we get into the merits of that complaint, and even more importantly, the proposed solution, let us share with you some very rudimentary research.

As soon as news of this proposal broke, we logged onto a popular movie ticket aggregation website to check out the price levels at which tickets were generally being sold. We discovered that out of the 201 shows scheduled for Badrinath Ki Dulhania in various Bengaluru theatres on that day, more than three-fourths i.e. 158 shows had tickets available at `200 and lower, including a plethora of options at `100 and less. Mind you, the sample above doesn’t include those properties that were not listed on the website and these typically tend to be single-screeners with low ticket prices.

Which begs the question: when the vast majority of the market is already offering its services well within the proposed threshold, why was this diktat needed at all? And if – despite the plentiful availability of lower-priced options – a certain section of the audience is willing to pay a premium for a recliner seat or a plusher auditorium or some other convenience, which public goal or national interest is served by denying them that choice?

The much broader issue, of course, is the very notion of a government or regulatory body interfering with market forces and arbitrarily imposing restrictions on bona fide enterprise. This is particularly jarring as it comes at a time when the central government is not only trying to project India as a prime destination for global investments on the promise of reduced regulation and ease of doing business, but is also hoping that state governments follow suit in the spirit of competitive federalism.

The many questions and concerns surrounding this baffling proposal do not end at that.

By capping ticket prices in the ‘larger public good’, is the government suggesting that cinema is an essential public service at par with, say, life-saving drugs or education of the girl child? If so, we are flattered indeed.

But if that really is the case, shouldn’t this critical service of national importance be given governmental support and incentives like priority and cheap funding, tax-breaks, loan waivers, subsidised facilities etcetera? Far from being showered with all these goodies and freebies, what we instead are saddled with is punitive and multiple taxation and face regulation and obstacles at each stage of our product life cycle. Note to the powers-that-be: please figure out whether cinema is an indispensable national priority or a sin industry, it obviously cannot be both!

Even if we assume that cinema-going qualifies as a service important enough for the government to ensure affordability, why should the financial burden of the same be necessarily borne by the film industry – exhibitors, distributors and producers? To draw a parallel with products like food grains, sugar, kerosene et al that are also subject to similar price controls in the public distribution system, it is the government that takes the financial hit, not the producers of the goods. Indeed, the Procurement Price/Minimum Support Price that the government offers to suppliers of essential goods keeps rising regularly and is far in excess of what the end consumer pays.

By the same extension, shouldn’t the government compensate for a price cap on ticket prices by making good the difference to the theatre owner? If they are willing to do that, then we would have absolutely no problem at all. Indeed, the government is more than welcome to buy out the entire capacity in cinema halls and offer tickets to the public for free, and we will happily throw in a complimentary tub of popcorn for each patron in return for the bulk booking!

One hopes, though seriously doubts, that the proposed price cap will ever be matched with a proportionate compensation plan. If not, then as a natural repercussion, theatre owners shall be forced to cut back on services and facilities to make up for the lost revenue. And that would be most unfortunate indeed.

Let us not forget that it was precisely this deterioration of customer experience, bought about by plummeting revenues when the video piracy crisis hit us in the 1980s-90s, that proved near-fatal for the theatrical business. It was only with the advent of multiplexes and vast improvements in the theatre-going experience that families gradually returned to cinema halls and pulled the industry back from the brink.

Incredibly difficult as it may be, we can try to combat the harmful actions of criminal elements like film pirates. But what do we do when the damage is done by those that we have elected for our welfare and service?

Nothing sums it up better than those beautiful lyrics from the great Anand Bakshi that were so poignantly immortalised by the voice of the legendary Kishore Kumar: Chingari koi bhadke, toh saawan usse bhujaye…Saawan jo agan lagaye, usse kaun bhujaye?

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