A string of flops over the last two-and-a-half years has the film industry, distributors and cinema halls concerned. ‘Where is the future of moviegoing headed?’ – is the primary question on their minds. 

Several cinema and trade experts had initially predicted that it seemed unlikely that theatres or the film industry would recover from the blow delivered to them during the pandemic. Many reasoned why – in the age of OTT – would the audience spend up to Rs. 400 + GST on a movie when they weren’t even sure it would live up to their expectations? When, in fact, they could binge on several movies, including the latest releases, at a considerably lower price from the comfort of their home?

On Friday, cinemas celebrated India’s first-ever National Cinema Day, with many theatres lowering their ticket prices to Rs. 75. Suddenly, houseful boards were back at several cinemas, with people even watching movies back-to-back. It’s evident now that lower prices can indeed bring back the audience, and there’s a need for a reassessment of ticket pricing strategies. But who decides the ticket price, and what keeps them from revising the current rates?

According to Rajender Singh Jyala, Chief Programming Officer, INOX Leisure Ltd, the answer to how ticket prices are decided varies, depending on geography, as well as the film’s scale. He explains, “In the south, for example, it’s the government that largely decides the ticket prices, with many state governments placing a cap on movie ticket prices. In the north, apart from Chandigarh, it is largely the exhibitors who decide the prices in every state. At INOX, we have four pricing slabs – regular, popular, blockbuster and mega blockbuster. In a year, not more than 10 films would fall in the category of a mega blockbuster. An Avengers or an RRR would belong in this category. It’s the exhibitor who decides which slab the film should be priced within, and then they inform the producer, studio or distributor. ” 

Producers of big budget films – that need to recover the amount invested in them – are often roped into these discussions, too. Jyala adds, “The film’s budget, star cast, scale and the hype around it – all these factors contribute in determining the price. “For example, Laal Singh Chaddha was placed in the popular slab, even though it was a big-budget Aamir Khan film, because exhibitors felt there was not much hype around the film, and the studio agreed.”

He adds, “The pricing is a matter of recovery. For a small budget film, even if we price it in the regular slab, it will be able to recover its investment. The same parameter is used for Hollywood films, in discussion with the producer, studio or distributor, whoever has the rights.”

Raj Bansal, exhibitor and industry expert, says, “During the era of single screens, it was the distributor who used to decide the ticket price, but after the advent of multiplexes, prices are decided by both. There is no hidden or secret price range. Usually, it is the multiplexes who discuss with each other and decide the ticket prices. For big-budget films, the price is decided mutually with producers and exhibitors. Exhibitors can’t decide on their own to lower or increase the price because then the multiplexes will lose out to competition.”

Akshaye Rathi, Director, Aashirwad Theatres Pvt Ltd, breaks down the pricing further, explaining, “If you look at multiplexes, then it is an organised sector. All major chains are in discussion with each other and they decide pricing on the basis of slabs in discussion with the producer/studio/distributor. On the other hand, the single screens are fragmented and each owner discusses the pricing with distributors. It is not about star value, but about recovery.”

Rathi says that people are more likely to come to cinemas when the content matches the price. And so the price keeps changing depending upon various factors. Adds Rathi, “Within this, too, the blockbuster price in Mumbai would be very different than in Nagpur. Even within Mumbai, prices at Nariman Point would be different from Andheri. Hence, prices change according to the city, location, day of the week, time of the show, and more. It is quite dynamic. It is a matter of demand and supply.”

But what if the ticket price is in the blockbuster slab, and the film crashes at the box office, can the price then be revised? Jyala says, “It is revised more often than one would imagine. If the film doesn’t perform well on the first Friday, then the price is modified. From a mega blockbuster price, a film’s price can go down to popular, or even regular, by the 11th day.”

But that isn’t the case when it’s the other way round i.e. when a popular film turns out to be a blockbuster. He says, “We never do that (raise ticket prices) as the audience would feel cheated.”

Girish Johar, producer and business analyst, says, “There are no written rules on what will decide a movie’s ticket price. I would say that in this discussion, it is the exhibitors who have a slight upper hand over producers. But if the producer or the studio is big enough, then it’s them who’ll have the upper hand. In either case, one seeks a balanced equilibrium.”

He adds, “This negotiation is about revenue-sharing. The exhibitors create an agreement before the film’s release. Largely, the terms of revenue-sharing are that in the first week, revenue is shared 50-50 between both parties – exhibitor and producer. In the second week it may be 55-45 between the exhibitor and producer, respectively, then it’s 60-40 and so on. ”

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-Star cast

- Budget

- Hype

- Regular

- Popular

- Blockbuster

- Mega Blockbuster

- The city or state the cinema hall is located in

- The locations within the city

- The day of the week

- The timing of the show

Though experts agree there’s a need to discuss new pricing, Rs. 75 is not sustainable for multiplexes, as they have to bear the cost of rentals, electricity, staff and maintenance