Karnataka state government in its recent budget decided to cap the cinema ticket prices at ₹200 and this will be applicable across all multiplexes and theatres in the state barring premium sections like Gold Class, IMAX and 4D screens.
This decision has once again brought to fore the debate on how this will affect the moviegoers and the industry.
Definitely at first glance this looks great from the perspective of the audiences who often complain of the exorbitant prices the theatre owners charge, specially for big films. The capping of ticket rates addresses this and thus making cinema watching more easy on pocket.
The decision also helps the industry as this will help increase the number of people opting to watch films on big screens rather than waiting for their arrival on OTTs.
But there’s always two sides to a coin and this step to cap the movie ticket prices can have negative implications for both the industry and the audience.
To compensate for their loss in revenue due to lower ticket rates, theatre owners often resort to other measures such as increasing the prices for refreshments, parking, and other facilities provided in the premises. Overall, leading to further alienation of the customers who now pay more for other services instead of tickets.
The capped price strategy is always discouraging for theatre and multiplex owners as it limits their ability of dynamic pricing for different kinds of films. They aren’t able to utilise the maximum from blockbusters by charging high prices, neither can they lure the customers with extremely low rates for non-commercial films or odd show times.
There’s also a pressure from the distributors side who often demand a minimum ticket sale guarantee. Without the ability to regulate prices this surely becomes difficult. Moreover, the losses are further transferred to film producers too and eventually affects the whole entertainment industry.
So what is the solution then?
Surely capping of movie ticket prices isn’t going to be the elixir one’s looking for. But then cinema hall owners also cannot be allowed to have a monopoly on such decisions. There has to be a middle ground where it’s a win-win for everyone.
Affordability is necessary but it must be balanced with profitability in order to be sustainable for longer and eventually being agreeable to very stakeholder in the industry including the customers.
One probable solution could be the government of every state (instead of a national one since every region has its own uniqueness) asking the theatres owners to form a pricing regulatory board of their own in that state which should include representatives from all stakeholders alongside a public representative. This board could then set some rules and guidelines to be followed by the entire industry of that region to avoid penalisation. This would not only give them autonomy but also help keep the ticket pricing in check.