The Hindu : Tamil Nadu / Chennai News : Multiplex industry put in a fix

Online edition of India's National Newspaper
Friday, Dec 29, 2006
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Tamil Nadu

Tamil Nadu - Chennai

Multiplex industry put in a fix

Susan Muthalaly

Concern at ceiling on ticket price

CHENNAI : After the Government fixed a ceiling of Rs. 50 on cinema tickets for theatres in the State effective January 1, 2007, the multiplex industry is left unsure of its future.

The year 2007 has been slated to be a year of multiplex revolution in Chennai, beginning with the entry of major players in the country — INOX Leisure Ltd and PVR Cinemas.

Sathyam Cinemas, a popular upmarket cinema complex in Royapettah, was set to expand to other locations in the city.

Deepak Asher, director, INOX Leisure Ltd, said the future looked bleak. The average cost of an INOX ticket in other cities is about Rs. 150.

"This cap on ticket prices is not conducive to operating a multiplex in the city. It will run at a loss. We are trying to persuade the Government to rethink and have sought a meeting through the FICCI and the CII," he said. Many States have provided tax exemption to multiplexes that are looking to invest there, he added. "They provide sops to encourage investment. Multiplexes will not want to invest with caps."

INOX is scheduled to open its doors at City Centre mall on Pongal Day. "But some permissions are still pending. So, that may not happen anyway," said Mr. Asher. When asked if the chain would consider pulling out of the deal in the event that the Government Order is implemented, he said, "I would not venture to say that."

"Tamil Nadu has a very strong cinema-going culture. We want to provide good facilities for the people. Just as there are five-star hotels and three-star hotels and one-star hotels that cater to different needs of the market, there are different screens."

PVR Cinemas is scheduled to open at Ampa Mall on Nelson Manickam Road by mid-2007.

Amitav Vardhan, CEO, Operations, said, "We are reviewing the situation. We need to go through the notification in detail before commenting. We would definitely like to present our case to the Chief Minister."

On the possibility of pulling out of the Chennai deal, he said that the construction for the Chennai PVR is still in progress, so it was too early to comment.

At Mayajaal, an entertainment complex 15 km from the city with six screens, the maximum price of a cinema ticket is Rs 150. As the screens come under the Kanathur village panchayat, the maximum price will be fixed at Rs 15 and minimum at Rs 5.

CEO of Mayajaal Entertainment Udeep B is unfazed by the developments. He said, "We have to follow the guide of the Government and observe how things evolve. It is an industry, after all." He said that different bodies would be representing the cases of the upmarket theatres to the Chief Minister.

He rubbished a rumour that Mayajaal was considering shutting shop. "Our revenue is not just from the movies. We have about eight other streams such as resort, retail, a sports club and so on," he said.

He said that there are no immediate plans to hike the prices of other services available at the complex to cover the drop in ticket prices. "We don't want to penalise the customer. So, no drastic measures. We will comply with all norms and take the holistic view."

The management at Sathyam Cinemas was not available for comment on the development.

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