In about a year from now, in September 2024, Basu Chatterjee’s Rajnigandha will celebrate its 50th anniversary. The film marked not just the debut of Amol Palekar in Bollywood but also heralded a string of films in the genre of the middle-of-the-road cinema. In some ways, Chatterjee altered the narrative at the time when Hindi films were largely characterised by fairy-tale plots, big stars, garish costumes and gaudy locations. In fact, Chatterjee had apparently not even wanted to cast Palekar and Vidya Sinha in the lead roles, but had been looking at established actors like Amitabh Bachchan, Shashi Kapoor and Sharmila Tagore. Nevertheless, Rajnigandha won over audiences, and Palekar went on to play the simpleton in many more movies, including Choti Si Baat and Chitchor. Audiences loved the character and were able to relate to the situations. All made on modest budgets, the films of directors like Basu Chatterjee and Hrishikesh Mukherjee were an absolute treat.
Importantly, we could afford to watch these films without it burning a big hole in our pockets. On the odd occasion, even the black market price was affordable. Today, however, a middle-class family simply cannot afford to watch a film in a cinema hall because tickets are way too expensive. Even adjusted for inflation, it is hard to think of any other product or service the price of which has gone up so much. Multiplexes have made cinema tickets a premium product, putting them out of reach for most of the cinema-viewing population.The average price of a ticket at a PVR theatre was Rs 204 in the year to March 2020; in FY22, the price went up to Rs 235, and in FY23, it was Rs 240. In Q1FY24, it was Rs 246 and analysts peg the ATP in the current year at Rs 250. These are averages; some shows of Oppenheimer in the NCR are running at Rs 700, while for Gadar2, they’re running at Rs 450.
Indeed, the sheer size of the PVR-Inox combine could push cinema tickets way beyond these levels and further out of reach for most. PVR-Inox is now a behemoth, with 1,650+ screens across 350+ properties in 110+ cities. The entity enjoys a 43% share of screens in the multiplex segment. That gives it about a third of the share of the net box office collections and a whopping 50% of the multiplex box office.
How a 50% share of the multiplex box office is not anti-competitive beats logic. But the merger escaped the Competition Commission of India (CCI) net because the size of the assets and sales were below the threshold levels needed for a scrutiny by the competition regulator. The Consumer Unity & Trust Society (CUTS) had urged the CCI to investigate the “possible anti-competitive effects” of the merger, but the CCI rejected the complaint in September 2022. CUTS challenged the CCI’s order, but, on August 10, the National Company Law Appellate Tribunal (NCLAT) dismissed a plea by CUTS seeking an investigation by the fair-trade regulator. NCLAT noted that as far as the abuse of dominant position was concerned, the Commission had rightly observed that even if the merger is concluded, dominance per se is not anti-competitive.
CUTS had argued the transaction had been exempted from the notification requirement under Section 5 of the Competition Act as it qualified for the de minimis exemption. It noted that because of the Covid-19 pandemic, the turnover of Inox was less than Rs 1,000 crore in FY21; else, it would have been mandatorily notified for approval from the Commission. CUTS argued the merger will result in significant market share in most relevant markets, which would lead to a consolidation of the film exhibition industry. Moreover, it would lower choice for a consumer, and impact them adversely in terms of high prices. Also, it could prevent other cinema theatres from accessing movies from distributors and advertising. And it could lead to deterioration in food and service quality.
In a rather unfortunate decision, the Supreme Court (SC) ruled in January that cinema halls and multiplexes have the right to regulate movie-goers on carrying food and beverage into the halls. “If viewers seek to enter a cinema hall, they must abide by the terms and conditions subject to which entry is granted. Having reserved the right of admission, it is open to theatre owners to determine whether food from outside the precincts of the cinema hall should be permitted to be carried inside,” the court observed. Analysts at Kotak Institutional Equities wrote last week “the recent pilot in F&B (Rs 99 menu on weekdays and bottomless popcorn/Pepsi on weekends) helped reduce the negative publicity around high F&B pricing.”
India badly needs a Popcorn Law on the lines of the one in Israel. The “Popcorn Bill’ was introduced in the Knesset in 2012, and the Consumer Protection Law was amended. As the Jerusalem Post then reported, the Bill changed the language of the law that allowed movie theatres to legally stop patrons from bringing refreshments by claiming that the food services were provided by someone else. The country’s lawmakers need to amend the laws so that cinema-goers are not charged an arm and a leg.
Interestingly, footfalls at PVR are yet to hit pre-pandemic levels. One reason for this is the poor quality of films from Bollywood; despite many of them being made on massive budgets and with big stars, they have flopped. Theatres are now relying on Hollywood and films from south India for footfalls.
The good news is that there is plenty of good content—some of it made on modest budgets—on OTT platforms. Many small-budget films are now screened on OTT. As the industry becomes more corporatised, more actors, writers, cinematographers, directors and technicians will get a chance to showcase their talent. Not everyone can afford OTT but sachet pricing, bundling and unbundling should soon change that. Sadly, though much of this content will never be shown in the theatres. For many, the magic of the silver screen will remain elusive.