Picture abhi baaki hai…! Karnataka's ticket price cap is multiplexes' latest plot twist

Economic Times

4 days ago

Karnataka movie ticket prices (Representational)
In Karnataka's movie theatres, popcorn might soon cost more than the film itself.The Siddaramaiah-ruled state wants to cap movie ticket prices at Rs 200 (taxes included) across all formats, languages and theatre types. The proposal which was announced in the CM's budget speech earlier this year, is now out as a draft notification. It's open for public feedback, but the industry's reaction is already loud and: this is a big deal!There are two sides to this story. While this move is being sold as a pro-public, pro-cinema step, it flips the economics of multiplexes on its head. Lower ticket prices might get more people through the door, yes. But for theatre chains that rely heavily on flexible pricing and premium formats, this is a real threat to their bottom line.For example, take a Director's Cut hall. Imagine getting a recliner at just Rs 200. Bizarre, isn't it? Not just for you, but for brands offering these services as well.PVR-Inox, India's biggest multiplex operator, might face a tough time if this move comes into action. Karnataka alone accounts for more than 12% of its screens and about 10% of its box office earnings. Average ticket prices in the state hover around Rs 260. A flat Rs 200 cap means a straight 30% cut in ticket-level revenue.
Now stretch that across the chain's pan-India books. According to Elara Securities, the cap could shave off 3.7% from PVR-Inox's overall average ticket price, reduce revenue by 2.2%, and drag down EBITDA by 1.8% over FY26–28. That's not small change. And the concern isn't just about numbers, it is also about the message this sends. This might just be the start of a broader reset in how India prices its cinema.What does the cap really mean for theatres?If you're a regular moviegoer, this sounds great. Tickets prices have been climbing up for years. A family of four catching a weekend movie in a mall may have to spend Rs 2,000 after tickets, snacks, and parking. Bring the ticket down to Rs 200, and suddenly that trip becomes more budget-friendly or as GenZs would say - Affordable pro max!But from the business side, this is a very different story. Multiplexes operate on a fragile formula based on ticket revenue, food sales, ad revenue and rent. Now, take away the ability to charge more when demand is high, and that formula starts to break.This is especially true for premium formats like IMAX, 4DX, or recliner seats. These don't come cheap. Building and operating them require major investments. In Bengaluru, these screens currently charge Rs 600 or more. A blanket cap of Rs 200 makes them instantly unviable.Karan Taurani of Elara Securities said that the cap hurts the very model multiplexes used for securing high growth. Lower returns will cool investor and franchise interest. Expansion plans, especially in second-tier cities or in premium screens, will slow down (or maybe stop).That will have ripple effects, too. Fewer screens means fewer options for producers and distributors. Local employment in theatre operations will take a hit. And viewers, ironically, might end up with fewer places to watch the kinds of films this policy claims to support.Theatre chains might also be forced to shrink, pulling out of low-performing properties or cutting down on the number of screens in some locations. In the short term, that's a loss for audiences. In the long run, it's a risk to the entire movie theatre ecosystem.
PVR-Inox already struggling The numbers don't lie. The revenue from operations in the quarter ended March 2025 stood at Rs 1,250 crore, down from Rs 1,256 crore in the corresponding quarter of the last financial year.On a sequential basis, the company reported a loss against profit after tax (PAT) of Rs 36 crore in Q3FY25. The top line, though, witnessed a 27% fall versus Rs 1,717 crore in the October-December quarter of FY25.
The box office in FY '25 was impacted by an uneven release calendar, marked by inconsistent content availability across quarters, a company filing said. Both Bollywood and Hollywood underperformed, contributing to a 9% decline in the company's overall gross box office revenue. That's a sign of real pressure. Content is uneven, audience behaviour is shifting, and the costs of operating multiplexes keep climbing. The Rs 200 cap only adds to the troubles.So what's the fallback plan? Food.Over the past few years, theatres have leaned heavily into their snack counters not just as a side hustle, but as a core profit driver.With tickets squeezed, expect that push to intensify. More combo deals, bundled experiences, loyalty perks or anything that gets people spending more once they're inside. Lobbies may be redesigned. Premium snack options might grow. Because the reality is that the real money now has to come from the counter, not the seat.
Komal Nahta, Indian film trade analyst, sums it up well. 'Business of multiplexes will reduce. That's the minus side,' he says. 'The plus is that the public won't have to pay exorbitantly high ticket prices. Hopefully, lower rates mean more people come in and that boosts overall business,' he added. That's the bet theatres are now being forced to make. But it's a risky one. Especially when most weeks don't have a blockbuster to fill those cheaper seats.
OTT threats looming already There's yet another side to this story: streaming.
Over the past few years, platforms like Netflix, Amazon and JioCinema have changed how people watch films. Big-screen exclusivity has shrunk. Many films, especially regional or mid-budget ones, land online just weeks after release. Some skip theatres entirely. That shift has weakened the power of the theatre window. Sure, a big-screen release still brings buzz and status. But for many producers, OTT deals offer faster, safer and more certain returns.In Karnataka, this has created friction. Kannada filmmakers have spoken out about poor visibility on national platforms. Some are now building their own OTT ecosystems. The state government, on its part, has announced plans for a dedicated Kannada streaming platform and a film archive, a bid to strengthen local content.But even if that works, it doesn't entirely solve the problem multiplexes face. Without strong theatrical performance, films lose momentum. Without momentum, their digital and satellite rights may lose value too. It's all linked. And price caps disrupt that entire chain.Add to that the shrinking screen count, the slowdown in premium formats, and the pressure on profits - and it's clear that the multiplex model is entering a period of stress.
Not the first time! This isn't Karnataka's first attempt at price control. In 2017, the state tried to impose a similar Rs 200 cap. That move went to court. Eventually, the High Court allowed theatres to charge more for premium formats, carving out some breathing space.That legal history may be PVR-Inox's best hope now. It gives them a precedent. A possible negotiation point.But the politics this time is different. Cinema is emotional. And ticket price, like onion price or petrol price, is now becoming a talking point. Rs 200 tickets sound good. It's hard to oppose that publicly, even if the economics don't work.And here's the larger worry. If Karnataka gets away with this and earns goodwill for it, other states might follow suit. A wider adoption of flat caps could force the entire industry to rewrite its business model.That's the real risk. A blow in one state can be absorbed. But a national trend? That's a crisis.Because here's what multiplexes really are - retail businesses with fixed costs, variable revenue and high stakes. You can't squeeze them endlessly without something giving way. Theatres will survive. But they may look very different from the ones we know today - with fewer screens, fewer formats, more food counters, and far more caution on what gets released!This may still get challenged in court. It may still get tweaked. However, the direction is clear -- ticket margins are under review, and for multiplex chains, that's a tough seat to be in.