Cinemas concerned over Karnataka price-cap proposal, fear other states may follow suit

The Karnataka government's proposal to cap movie ticket price at Rs 200 on single screens and at multiplexes has made film exhibitors concerned amid a slump in footfall at theatres nationwide, and they fear this may prompt other states also to take similar steps.

Karnataka chief minister Siddaramaiah's statement during his budget presentation Friday has raised uncertainty and concern within the industry.

PVR INOX, which operates 215 screens in Karnataka out of its total 1,728, will wait for a government order and assess its conditions before evaluating its position, said chief executive Pramod Arora. He also cautioned that implementation of such a cap would also hurt the state’s tax revenue.

“The rule may also vary depending on the different formats in which movies are screened. We are confident that the exchequer is prudent and would not want to hinder the revenue generated by the industry,” he said. “Despite Tamil Nadu’s regulations (capping prices), dynamic pricing for screening in different formats exists. If this rule is implemented in Karnataka, it would be a short- and long-term setback for revenues and a regressive move. No government wants to discourage any industry be it cinema or aerospace,” he added.

According to industry analysts, Karnataka has 719 screens, accounting for nearly 20% of the 3,674 screens across the southern region. Multiplexes control 90% of the market, with the state's growing cosmopolitan culture making it the most profitable multiplex market in southern India, they said.

"We are still reviewing the matter," said Multiplex Association of India president Kamal Gianchandani.

Meanwhile, Karnataka Film Exhibitors Association president KV Chandrashekar welcomed the proposal, saying that it would encourage more people to watch movies on the big screen. “This move will attract more audiences to theatres, benefiting the industry and helping us compete with OTT platforms. Tamil Nadu has successfully adopted this model, and Karnataka can do the same,” he said.

Karnataka home minister G Parameshwara told the state legislative council Thursday that the government was aware that watching films in multiplexes was beyond the reach of the middle class and that the government’s earlier decision to allow movie watchers to carry food and water into multiplexes was not being followed.

“We will soon put in place a comprehensive system to regulate and bring uniformity in cinema ticket prices,” Parameshwara said.

A veteran trade analyst, who wished to remain anonymous, said: “Bengaluru is the best market for multiplexes as films in almost all languages perform well here, making Karnataka the most lucrative market in the South.”

There is a huge cost in running multiplexes and capping of ticket prices at Rs 200 is impractical and financially unviable for exhibitors, said south-based independent trade analyst Sreedhar Pillai. “One has to understand that watching films in theatres is not an essential service. So, the government has to consider this.”

In the southern region, exhibitors currently operate under flexible arrangements with state governments. In Andhra Pradesh and Telangana, ticket prices are capped between Rs 175 and 200 Monday to Friday, with flexible pricing on weekends, allowing exhibitors to hike rates for big-budget releases. Tamil Nadu maintains a Rs 175 cap, while in Kerala, cinema owners coordinate ticket rates with local bodies and associations, establishing a regulated price range.

"Such orders impact the entire ecosystem nationally. It’s a vicious cycle. Producers will be discouraged from making big-budget films as they won’t recover costs through higher ticket prices, and exhibitors will lose business since multiplexes today are largely driven by big-budget films," said the head of content programming & strategic initiatives at a Mumbai-based multiplex.

Chandrashekar of the Karnataka Film Exhibitors Association said in his view only first-day revenues may see an impact, but footfalls in theatres will increase in the long run.

Analysts say that if other states follow suit in capping ticket prices, it could affect the quality of services offered by exhibitors and restrict their ability to invest in technological upgrades, ultimately impacting the overall movie-going experience. Additionally, multiplexes may hesitate to expand due to the revenue constraints imposed by price caps, they said.