The Multiplex Association of India (MAI)today urged the Karnataka government to withdraw its order capping movie ticket rates in all theatres in the state at Rs 200, calling it a "retrograde and unfair step against the interests" of film industry and people.
"We urge the Karnataka government to withdraw its notification of putting a cap on ticket prices for all cinema theatres in the state at Rs 200 as we believe it is a retrograde and unfair step against the interests of film industry and people," MAI President Deepak Asher said in a statement here.
He also said MAI is evaluating options at its disposal to protect the interests of its members and other stakeholders.
Citing reasons for withdrawal of notification, Asher said the move to cap ticket prices is extremely investor unfriendly and will stop the growth of new multiplexes in Karnataka.
In addition, it would also lead to many existing multiplexes to consider shutting down because of financial inviability, he said.
"The flexibility to decide ticket prices enable multiplexes to optimise occupancies and hence remain financially viable," he added.
Asher also argued that charging relatively higher prices for peak shows like evening shows on weekends, help multiplexes charge lower prices on non-peak shows, like morning shows on week-days.
The order to exempt only 10 per cent of the total seats of the cinema having Insignia,Gold Class,VIP seats from the price cap, will deprive the people of Karnataka from watching a movie in comfortable and luxurious seats as multiplex operators will not invest in these type of seats going forward, he contended.
"The two largest multiplex chains in India, which together account for around 50 per cent of multiplex screens in the country, have a combined net profit margin of less than 5 per cent, not even sufficient to provide any return on capital," Asher claimed.
In fact, most of the other multiplexes are barely able to meet their costs, he added.
The Association President further stated that there was no rationale for controlling ticket prices of cinema theatres as the government does not control prices of other similar activities, like airlines, amusement centres, hotels and restaurants, among others.
The Karnataka government has capped the price of film tickets at all theatres at Rs 200 and made it mandatory for multiplexes to screen Kannada and regional cinema during prime time.
The notification also makes it mandatory for multiplexes to screen Kannada and regional cinema during the prime time (between 1.30 pm to 7.30 pm) at least on one screen. However, the maximum cap of Rs 200 does not include taxes.