UA THADANI
Theatres no longer pay
The president of the Theatre Owners Association minces no words in assessing and apportioning the blame for the falling theatre collections....

INDIA with a population nearing the 100 billion mark, has only 12,387 cinemas - 9,015 permanent and 3,366 touring plus six non-commercial. As per UNESCO reports, the country should have had one cinema for every 20,000 people, but the existing number does not meet even a tenth of that requirement.

Apart from this extremely poor growth record, India’s exhibition sector is facing another crunch. Today, even the existing cinemas, meagre as their number is, are not money-making propositions despite the fact that the Indians are rated as the most fond patrons of the medium. The reasons for today’s poor attendance at cinema halls are many. The president of the Theatre Owners Association assess the state of the cinema business in Mumbai territory. The health of cinemas in Mumbai and its suburbs is bad, and it cannot be any better in other places, he reckons...

Do you think more cinemas will help to remedy the present situation?
No. As it is, the existing cinemas are not doing well. The collections are down because of video piracy on the one hand and the showing of Hindi films round-the-clock by some of the television channels, on the other. Now that the producers have decided to allow films to be shown after one year of their releases, people can now see on TV one-year-old films also. This has killed the second run business, specially of smaller cinemas, which were dependent on them.

Why don’t the exhibitors, distributors and producers jointly stop the menace of video piracy?
How can we stop video piracy. It is the job of the government. It promises to stop piracy but nothing happens. It should realise that because of piracy, the attendance of cinemas has gone down which in turn has and is affecting the entertainment tax collections.

What are the other reasons for low collections?
The films are not having a sustained run. Some films may register 100 per cent collections in the first three days but from Monday onwards the collections dip to 50 per cent or even less. During the entire eight months of this year, only Kaho Naa...Pyar Hai, Josh and Kya Kehna have done good business. The flow of film releases in May and June was also lean. Last week, only one film, Har Dil Jo Pyar Karega, was released.

If collections are poor, why haven’t the cinemas closed down?
How can they? The Government of Maharashtra is not allowing them to close down. Even if the cinemas are demolished, like Roxy and Apsara for instance, and a commercial complex is built, the rule requires that one third of the seating capacity of the demolished cinema should be retained.

If the condition of the existing cinemas is so bad, how can new cinemas come up?
When the existing cinemas are unable to make both ends meet, where is the place for new cinemas? And, since the flow of films is less, the distributors are demanding Minimum Guarantee (MG) from the cinemas. And, since the collections are low, the exhibitors are unable to cover the MG. The distributors pocket the money before the film’s release. It is the exhibitor who loses, when the collections are poor. In my opinion, every cinema is losing at least Rs 1 lakh per film per week.

If the exhibitor is losing money, why does he give MG?
How can an exhibitor know beforehand which film will not run? They don’t show the films to the exhibitors before they are released.

You mean the exhibitors book films blindly?
Yes. They can’t help booking films blindly. Most of the cinemas need films every week and some after five or ten weeks, if the films do well. The distributors are buying films at a high price of Rs 2 crore to Rs 2.5 crore. They can’t recover investments if they can’t take MG from the exhibitors. Sin -ce most of the films are not collecting even 50 per cent, the exhibitors stand to lose.

But the producers are spending crores of rupees on publicity to boost their films by advertising lavishly, with full-page ads even in the daily newspapers.
Inspite of these full-page advertisements, the collections have not improved. Today’s audience is different. They come to know what the film is all about much before it is released. They decide beforehand which films to watch and which to avoid. They smell a flop much before a film is released. The middle class has limited funds to spend on cinemas. So also the working class. They can’t see each and every film. Besides, when they can see the latest releases on cable, why would they go to the theatre to see new films?

Yet, as many as 40 applications are pending with the state government for multiplexes. How do you account for this?
I do not know how many applications are pending with the government and I am least concerned about the figure. What should be of concern is, will there be a sufficient number of films available for the multiplexes? As it is, there is a shortage of films and films that run. Most of the films released during the last eight months have flopped.

You mean constructing a new cinema is not a paying proposition?
In the existing conditions, the construction of new cinemas is not advisable. Firstly because the flow of films is less. Secondly because the owner of a new cinema, who may have to spend as much as Rs 3 crores for its construction, will not find it economical to run his cinema house.

Why is the flow of films low?
Because most of the big budget films are taking two years in the making. Even after taking so much time in the making, the films which are churned out are not good enough to sustain more than a week and in some cases not even a week.

Do you think that by reducing the admission rates, the attendance will improve?
No. Instead of reducing the admission rates, the entertainment tax should be reduced. It has been proved that when the entertainment tax stood at 100 per cent, the state collected Rs.80 crores but when the tax was reduced to 60 per cent, the state collected Rs 150 crores. This only goes to show that if the entertainment tax is reduced, theatre attendance will increase. Cinemas in Thane and other districts are not showing the exact collections of entertainment tax. They are duplicating the tickets. If they had shown the real collections, the government would have got much more tax than what it did during this fiscal year.

The admission rates in most of the cinemas in Mumbai are already high. What do you have to say?
That is so only with the cinemas in South Mumbai, in theatres like Metro and Liberty. As far as renovated cinemas are concerned, the rates are high because the renovation cost could be anything upto Rs 3 crore. If they don’t keep high admission rates, how will they recover the investment? In Chitra cinema, the rate of a balcony ticket is Rs 65, while in my theatre, Ganesh, the balcony rate is Rs 25. Both theatres are air-conditioned.

Whether it is old cinemas or new, unless the government recognises the film industry, it will not help the exhibition trade because overheads like high rates of electricity charges and property tax based on the seating capacity are equally burdensome. If the exhibition trade is also considered an industry, then cinemas will pay electricity duty on the industrial basis. Similarly property tax should be on the cinema and not on the number of seats because all seats are not always occupied in each show. These anamolies have to be removed if the government wants to help the exhibition trade.

MSMD