Telugu

Why Allu Arjun’s Pushpa is yet to break even in its home Andhra Pradesh: How cinema theatre ticket prices are affecting industry

The strict measures taken by the government of Andhra Pradesh to ensure transparency in the film industry threaten the very existence of the film industry in the state. The government announced regulation of ticket prices earlier this year, which forced theaters to cut their ticket prices significantly. While for multiplexes in municipal business areas, the minimum ticket price was set between Rs 75 and Rs 250, the prices in AC and non-AC theaters range from Rs 20 to Rs 100. In gram panchayat areas, the tickets were set so low as Rs 5.

For an industry already dealing with COVID-19, the order came as a death blow. For instance, Allu Arjun’s Pushpa: The Rise, which has made record collections in several parts of the country, is struggling to break even in its home country of Andhra Pradesh.

The theater collection in the state is measured in terms of share. In box office lingo, gross means the total pre-tax collection, net means the final after-tax revenue, and share represents how much the distributors earn after deducting theater rent. “Unlike other parts of the country, most theaters in Andhra Pradesh run the movies on a rental basis,” said Deepak, who runs AndhraPradeshBoxOffice.com. indianexpress.com.

The math of the cash register.

For example, if the rent of a theater is Rs 10,000 and a movie brings a collection of Rs 50,000, the theater owner will deduct the rent and give the rest to the distributors. This system protects the theaters against loss, regardless of whether a movie attracts visitors or not.

A still from Pushpa: The Rise (Photo: Samantha Ruth Prabhu/Instagram)

According to Deepak’s estimate, if the theaters were allowed to keep the old ticket prices, Pushpa’s first day gross collection in Andhra Pradesh alone would have been about Rs 35 crore, of which Rs 25 crore would have been the distributors’ share. However, Pushpa collected a share of just over Rs 13 crore from the state’s 1,100 screens. To put this in perspective, in Telangana, Pushpa’s share was pegged at over Rs 11 crore from about 600 odd screens on day one.

According to the government guideline, about 60 percent of individual 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.

The low ticket prices are impacting the cinema’s survival as many theaters in Andhra Pradesh have already ceased operations. And it’s just one of many problems threatening the business.

Usually, the distributors pay an advance to the producers and commit to pay all dues a few days before the film’s release. The distributors raise the fund to settle their dues with the producers by receiving advances from theaters. But under the current circumstances, theaters are apparently unwilling to give the distributors an advance, leaving the distributors and in fact the producers in a difficult position.

“Are we a democracy or a communist state?” film producer Sravanthi Ravi Kishore wondered, arguing strongly for a free market.

Kishore argues that unless the government subsidizes a film’s production costs, the right to decide the value of one’s creation rests with the maker. “I think we should have bipartisan pricing. One for entry to the theater and the other for whatever movie you are watching. The ticket price should vary based on a movie’s budget. With a general compartment ticket you cannot travel in the first class compartment of the train,” he noted.

Take, for example, director SS Rajamouli’s upcoming magnum opus RRR, which is said to cost almost Rs 400 crore to make. With the current cap on ticket prices in Andhra Pradesh, most theaters are not even allowed to charge Rs 100 per ticket. And many fear that even in the state, the movie won’t break even if it manages to run domestic shows. The film has been postponed for the time being due to rising Covid-19 cases.

Rising costs, stagnant prices.

RRR trailer Ram Charan and Jr NTR as Alluri Sitarama Raju and Komaram Bheem, respectively, in SS Rajamouli’s RRR film. (Photo: PR handout)

At the same time, Kishore is also positive that the ticket price problem is being resolved quickly. “I think it’s a temporary phase,” he added. “We are optimistic.”

Not only the distributors and producers, the low ticket prices also cause stress for the owners of individual screens. “We have suffered heavy losses due to the low ticket price cap and raids by officials. If it continues like this, it will be difficult to run the single screen theaters,” GVN Babu, the secretary of the Andhra Pradesh State Cine Exhibitors Association, told indianexpress.com.

“The central government long ago granted industry status to the entertainment sector and had ordered the state government to change electricity rates accordingly during the reign of Vijay Bhaskar Reddy (former CM of united Andhra Pradesh). He had issued a GO (government order) for this, but it was not carried out. And it is the main reason for our financial woes. Also, ticket prices have not increased in the past 20 years. Our spending is increasing day by day due to technological advancements, labor costs, salaries and so on. But the government has not done much to support us. Sometimes the average occupancy per month in an AC theater in Grama Panchayats can fall below 10 percent. For AC theaters, we want a ticket for the high-end seats to cost a minimum of Rs 100 and a minimum of Rs 40 for the lower seats, plus maintenance fees and GST. Earlier we (the government) requested to increase the maintenance costs from Rs 3 to Rs 10. In addition, there is a lot of uncertainty due to lack of clarity about the inclusion of GST in the ticket prices. According to the order of the central government, GST must be collected separately on the ticket costs,” he added.

Despite repeated requests from all parts of the film industry, the government of Andhra Pradesh has shown no sign of changing its position. “When Covid broke out, releases of all movies were stopped, right?” Minister Perni Nani asked earlier during an interview on 10TV News Telugu.

“Covid was a real problem. If they had a real problem with the government of Andhra Pradesh, they would have postponed the release of the film until they had the solution, wouldn’t they? Why would they announce release dates if they had a problem?” he said while responding to whether the ticket price issue will be resolved before the Sankranti releases are released.

Perni Nani added: “The intention of the Jagan Mohan Reddy government is clear. We want to ensure that no form of exploitation takes place. The tickets must be sold at the price set by the government. We want everyone to benefit from this.”

The government recently formed a committee to investigate the concerns of the film industry. The stakeholders hope they can negotiate a favorable deal with the government before the big tickets are released.

(With input from Gabbeta Ranjith Kumar)

.

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The strict measures taken by the government of Andhra Pradesh to ensure transparency in the film industry threaten the very existence of the film industry in the state. The government announced regulation of ticket prices earlier this year, which forced theaters to cut their ticket prices significantly. While for multiplexes in municipal business areas, the minimum ticket price was set between Rs 75 and Rs 250, the prices in AC and non-AC theaters range from Rs 20 to Rs 100. In gram panchayat areas, the tickets were set so low as Rs 5.

For an industry already dealing with COVID-19, the order came as a death blow. For instance, Allu Arjun’s Pushpa: The Rise, which has made record collections in several parts of the country, is struggling to break even in its home country of Andhra Pradesh.

The theater collection in the state is measured in terms of share. In box office lingo, gross means the total pre-tax collection, net means the final after-tax revenue, and share represents how much the distributors earn after deducting theater rent. “Unlike other parts of the country, most theaters in Andhra Pradesh run the movies on a rental basis,” said Deepak, who runs AndhraPradeshBoxOffice.com. indianexpress.com.

The math of the cash register.

For example, if the rent of a theater is Rs 10,000 and a movie brings a collection of Rs 50,000, the theater owner will deduct the rent and give the rest to the distributors. This system protects the theaters against loss, regardless of whether a movie attracts visitors or not.

A still from Pushpa: The Rise (Photo: Samantha Ruth Prabhu/Instagram)

According to Deepak’s estimate, if the theaters were allowed to keep the old ticket prices, Pushpa’s first day gross collection in Andhra Pradesh alone would have been about Rs 35 crore, of which Rs 25 crore would have been the distributors’ share. However, Pushpa collected a share of just over Rs 13 crore from the state’s 1,100 screens. To put this in perspective, in Telangana, Pushpa’s share was pegged at over Rs 11 crore from about 600 odd screens on day one.

According to the government guideline, about 60 percent of individual 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.

The low ticket prices are impacting the cinema’s survival as many theaters in Andhra Pradesh have already ceased operations. And it’s just one of many problems threatening the business.

Usually, the distributors pay an advance to the producers and commit to pay all dues a few days before the film’s release. The distributors raise the fund to settle their dues with the producers by receiving advances from theaters. But under the current circumstances, theaters are apparently unwilling to give the distributors an advance, leaving the distributors and in fact the producers in a difficult position.

“Are we a democracy or a communist state?” film producer Sravanthi Ravi Kishore wondered, arguing strongly for a free market.

Kishore argues that unless the government subsidizes a film’s production costs, the right to decide the value of one’s creation rests with the maker. “I think we should have bipartisan pricing. One for entry to the theater and the other for whatever movie you are watching. The ticket price should vary based on a movie’s budget. With a general compartment ticket you cannot travel in the first class compartment of the train,” he noted.

Take, for example, director SS Rajamouli’s upcoming magnum opus RRR, which is said to cost almost Rs 400 crore to make. With the current cap on ticket prices in Andhra Pradesh, most theaters are not even allowed to charge Rs 100 per ticket. And many fear that even in the state, the movie won’t break even if it manages to run domestic shows. The film has been postponed for the time being due to rising Covid-19 cases.

Rising costs, stagnant prices.

RRR trailer Ram Charan and Jr NTR as Alluri Sitarama Raju and Komaram Bheem, respectively, in SS Rajamouli’s RRR film. (Photo: PR handout)

At the same time, Kishore is also positive that the ticket price problem is being resolved quickly. “I think it’s a temporary phase,” he added. “We are optimistic.”

Not only the distributors and producers, the low ticket prices also cause stress for the owners of individual screens. “We have suffered heavy losses due to the low ticket price cap and raids by officials. If it continues like this, it will be difficult to run the single screen theaters,” GVN Babu, the secretary of the Andhra Pradesh State Cine Exhibitors Association, told indianexpress.com.

“The central government long ago granted industry status to the entertainment sector and had ordered the state government to change electricity rates accordingly during the reign of Vijay Bhaskar Reddy (former CM of united Andhra Pradesh). He had issued a GO (government order) for this, but it was not carried out. And it is the main reason for our financial woes. Also, ticket prices have not increased in the past 20 years. Our spending is increasing day by day due to technological advancements, labor costs, salaries and so on. But the government has not done much to support us. Sometimes the average occupancy per month in an AC theater in Grama Panchayats can fall below 10 percent. For AC theaters, we want a ticket for the high-end seats to cost a minimum of Rs 100 and a minimum of Rs 40 for the lower seats, plus maintenance fees and GST. Earlier we (the government) requested to increase the maintenance costs from Rs 3 to Rs 10. In addition, there is a lot of uncertainty due to lack of clarity about the inclusion of GST in the ticket prices. According to the order of the central government, GST must be collected separately on the ticket costs,” he added.

Despite repeated requests from all parts of the film industry, the government of Andhra Pradesh has shown no sign of changing its position. “When Covid broke out, releases of all movies were stopped, right?” Minister Perni Nani asked earlier during an interview on 10TV News Telugu.

“Covid was a real problem. If they had a real problem with the government of Andhra Pradesh, they would have postponed the release of the film until they had the solution, wouldn’t they? Why would they announce release dates if they had a problem?” he said while responding to whether the ticket price issue will be resolved before the Sankranti releases are released.

Perni Nani added: “The intention of the Jagan Mohan Reddy government is clear. We want to ensure that no form of exploitation takes place. The tickets must be sold at the price set by the government. We want everyone to benefit from this.”

The government recently formed a committee to investigate the concerns of the film industry. The stakeholders hope they can negotiate a favorable deal with the government before the big tickets are released.

(With input from Gabbeta Ranjith Kumar)

.

Source link

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