The Andhra Pradesh government’s strict measures to ensure transparency in the business of cinema is threatening the survival of the film industry in the state. The government announced regulation of ticket prices earlier this year, which forced theatres to appreciably lower their ticket prices. While for multiplexes located in municipal corporation areas, the minimum ticket price was set between Rs 75 and Rs 250, in AC and non-AC theatres the prices range from Rs 20 to Rs 100. In gram panchayat areas, the tickets were set as low as Rs 5.
For an industry already dealing with Covid-19, the order came as a death blow. For instance, Allu Arjun’s Pushpa: The Rise, which has done record-setting collections in various parts of the country, is struggling to break even on its home ground, Andhra Pradesh.
The theatrical collection in the state is measured in terms of share. In box office jargon, the gross means total collection before taxes, net means the final earnings after the taxes and share stands for how much the distributors make after deducting theatre rent. “Unlike other parts of the country, in Andhra Pradesh majority of the theatres run the movies on a rental basis,” Deepak, who runs AndhraPradeshBoxOffice.com, told indianexpress.com.
The math of the box office.
For example, if the rent of a theatre is Rs 10,000 and a movie makes a collection of Rs 50,000, the theatre owner will deduct the rent and give the rest to the distributors. This system safeguards the theatres from incurring a loss, irrespective of whether or not a movie draws footfalls.
According to Deepak’s estimation, if the theatres were allowed to retain the old ticket prices, Pushpa’s first day gross collection would have stood around Rs 35 crore in Andhra Pradesh alone, of which Rs 25 crore would have been the distributors’ share. However, Pushpa collected a share of a little more than Rs 13 crore from the state’s 1100 screens. To put this in perspective, in Telangana, the first-day share of Pushpa was pegged at over Rs 11 crore from around 600-odd screens.
According to the government’s directive, about 60 percent of single screens can’t charge more than Rs 70 for a ticket. And in some rural areas, the ticket prices begin at Rs 5 and the maximum cost of a ticket goes up to Rs 15.
The low ticket prices are affecting the existence of the cinema business as many theatres in Andhra Pradesh have already ceased their operations. And it is just one of a host of problems threatening the business.
Usually, the distributors pay advance to the producers and commit to settling all dues a couple of days before the film’s release. The distributors raise the fund to settle their dues with the producers by taking advances from theatres. But, under the current circumstances, theatres are apparently unwilling to lend an advance to the distributors, leaving the distributors and, in effect, the producers in a tough spot.
“Are we a democracy or a communist state?” wondered Sravanthi Ravi Kishore, film producer, while strongly advocating for a free market.
Kishore argues that unless the government is subsidizing a film’s production cost, the right to decide the value of one’s creation lies with the creator. “I think we must have two-part pricing. One for admission to the theatre and the other for what movie you are watching. The ticket price should vary based on the budget of a movie. You can’t travel in the first-class compartment of the train with a general compartment ticket,” he remarked.
Take, for example, director SS Rajamouli’s upcoming magnum opus RRR, which is said to cost nearly Rs 400 crore to make. With the current cap on ticket prices in Andhra Pradesh, most of the theatres won’t be allowed to even charge Rs 100 per ticket. And many fear that the film won’t even break even in the state, even if it manages to run houseful shows. The film has been postponed due to rising Covid-19 cases for now.
Rising costs, stagnant prices.
At the same time, Kishore is also positive that the issue about the ticket prices will be resolved soon. “I think it is a temporary phase,” he added. “We are optimistic.”
Not just the distributors and producers, the low ticket prices are also putting the owners of single screens under stress. “We have been experiencing heavy losses due to the low cap on ticket prices and raids by officials. If it continues like this, it will be difficult to run the single screen theatres,” GVN Babu, the secretary of Andhra Pradesh State Cine Exhibitors Association, told indianexpress.com.
“The central government allotted the industry status to the entertainment sector a long time ago and had directed the state government to change the electricity tariffs accordingly during Vijay Bhaskar Reddy’s (former CM of united Andhra Pradesh) administration. He had issued a GO (government order) on the same, but it was not implemented. And it is the primary reason for our financial woes. Also, there was no increase in ticket prices in the last 20 years. Our expenditures are increasing day-by-day due to advancements in technology, labour charges, salaries and so on. But, the government hasn’t done much to support us. Sometimes, the average occupancy per month in an AC theatre in Grama Panchayats may go below 10 per cent. For AC theatres we want a ticket on the high end seating to cost a minimum of Rs 100 and a minimum of Rs 40 on the lower end seating, plus maintenance charges and GST. Earlier, we requested (the government) to increase the maintenance charges from Rs 3 to Rs 10. Apart from that, there is a lot of confusion due to the lack of clarity over the inclusion of GST in the ticket prices. As per the central government order, GST has to be collected separately over the ticket charges,” he added.
Despite repeated requests from all sections of the film industry, the Andhra Pradesh government has shown no sign of changing its stance. “When Covid broke out, releases of all films were stopped, right?,” asked Minister Perni Nani during an interview on 10TV News Telugu earlier.
“Covid was a real issue. If they had a real issue with the Andhra Pradesh government, they would have put the film’s release on hold until they got the solution, no? Why would they announce the release dates if they had an issue?” he said while responding to the question of whether the ticket price issue will be resolved before the Sankranti releases.
Perni Nani added, “The intention of the Jagan Mohan Reddy government is clear. We want to make sure there is no exploitation of any sort. The tickets should be sold at the price decided by the government. We want everyone to benefit.”
The government recently has formed a committee to look into the concerns of the film industry. The stakeholders are hopeful of negotiating a favorable deal with the government before the big-ticket releases.
(With inputs from Gabbeta Ranjith Kumar)