Strict measures by the government of Andhra Pradesh to ensure transparency in the film industry threaten the survival of the state film industry. The government announced ticket price regulations earlier this year, forcing theaters to significantly lower their ticket prices. While for multiplexes located in municipal areas, the minimum ticket price has been set between Rs 75 and Rs 250, in AC and non-AC theaters, prices vary from Rs 20 to Rs 100. In gram areas panchayat, the tickets were set as low. as Rs 5.
For an industry already facing Covid-19, the order was a fatal blow. For example, Pushpa: The Rise by Allu Arjun, which has achieved record collections in various parts of the country, is struggling to break even in its home turf, Andhra Pradesh.
The state’s theatrical collection is measured in terms of share. In box office parlance, gross means total pre-tax collection, net means final after-tax income, and share represents distributors’ income after deducting theater rent. âUnlike other parts of the country, in Andhra Pradesh the majority of theaters offer movies for rental,â Deepak, who runs AndhraPradeshBoxOffice.com, told indianexpress.com.
Box office math.
For example, if the rent of a cinema is Rs 10,000 and a film collects Rs 50,000, the owner of the cinema will deduct the rent and give the rest to the distributors. This system protects theaters from loss whether or not a movie is seen.
According to Deepak’s estimate, if theaters were allowed to keep the old ticket prices, Pushpa’s first day gross collection would have been around Rs 35 crore in Andhra Pradesh alone, of which Rs 25 crore would have been collected. was the share of distributors. However, Pushpa collected a share of just over Rs 13 crore from the state’s 1,100 screens. To put that into perspective, in Telangana, Pushpa’s first day share was estimated to be over Rs 11 crore on around 600 odd screens.
According to the government directive, around 60% of single screens cannot charge more than Rs 70 for a ticket. And in some rural areas, ticket prices start at Rs 5 and the maximum cost of a ticket goes up to Rs 15.
Low ticket prices are affecting the existence of the film business, as many theaters in Andhra Pradesh have already gone out of business. And that’s just one of the many issues that threaten the business.
Usually, distributors pay producers an advance and agree to pay all fees a few days before the film is released. Distributors raise funds to pay their dues with producers by taking advances to theaters. But, under the current circumstances, theaters are apparently unwilling to lend distributors an advance, leaving distributors and indeed producers in a difficult position.
âAre we a democracy or a communist state? asked Sravanthi Ravi Kishore, film producer, while arguing strongly for a free market.
Kishore argues that unless the government subsidizes the cost of producing a film, the right to decide the value of its creation rests with the creator. âI think we need to have two-part pricing. One for theater admission and one for the movie you are watching. The price of the ticket must vary according to the budget of a film. You cannot travel in the first class compartment of the train with a general compartment ticket, âhe noted.
Take, for example, the next magnum opus RRR from director SS Rajamouli, which would cost almost Rs 400 crore to manufacture. With the current cap on ticket prices in Andhra Pradesh, most theaters won’t even be allowed to charge Rs 100 per ticket. And many fear that the film will not even hit the breakeven point as it stands, even if it does manage to run in house shows. The film has been postponed due to the increase in Covid-19 cases at this time.
Rising costs, stagnating prices.
At the same time, Kishore is also convinced that the ticket price issue will soon be resolved. “I think this is a temporary phase,” he added. “We are optimistic.”
Not only distributors and producers, low ticket prices also put unique screen owners under pressure. âWe suffered heavy losses due to the low cap on ticket prices and raids by the authorities. If it continues like this, it will be difficult to operate the single screen cinemas, âGVN Babu, secretary of the Andhra Pradesh State Cinema Exhibitors Association, told indianexpress.com.
âThe central government granted industry status to the entertainment sector a long time ago and ordered the state government to change electricity tariffs accordingly under the administration of Vijay Bhaskar Reddy (former CM of United Andhra Pradesh). He had issued a GO (government order) on the same, but it was not implemented. And this is the main reason for our financial problems. In addition, there has been no increase in ticket prices over the past 20 years. Our expenses are increasing day by day due to technological advancements, labor costs, wages, etc. But the government has done little to support us. Sometimes the average monthly occupancy rate in an AC theater in Grama Panchayats can drop below 10%. For AC theaters, we want a ticket for high end seats to cost at least Rs 100 and a minimum of Rs 40 for low end seats, plus maintenance fees and GST. Previously we have asked (the government) to increase the maintenance fee from Rs 3 to Rs 10. Other than that there is a lot of confusion due to the lack of clarity on including GST in the price tickets. According to the decree of the central government, the GST must be collected separately on the ticket fees, âhe added.
Despite repeated requests from all sections of the film industry, the government of Andhra Pradesh has shown no signs of changing its position. âWhen Covid broke, the releases of all films were halted, right? Minister Perni Nani asked earlier in an interview on 10TV News Telugu.
âThe Covid was a real problem. If they had a real problem with the government of Andhra Pradesh, they would have put the film on hold until they got the solution, right? Why would they announce release dates if they had a problem? He said when answering the question of whether the ticket price issue will be resolved before Sankranti is released.
Perni Nani added: âThe intention of Jagan Mohan Reddy’s government is clear. We want to make sure there is no exploitation of any kind. Tickets should be sold at the price decided by the government. We want everyone to benefit.
The government recently formed a committee to examine the concerns of the film industry. Stakeholders hope to negotiate a favorable deal with the government ahead of major exits.
(With contributions from Gabbeta Ranjith Kumar)