Ticket tax sparks Indian cinema strike

Cinemas in Bollywood's homeland are striking against high taxes on ticket sales.

Owners of Mumbai's single-screen theatres will keep their shutters down until Friday to protest about levies, which they say are driving them out of business.

More than a third of single-screen cinemas in the state of Maharashtra have closed down in the last five years.

According to the Cinema and Exhibitors Association of India, just 700 are still in operation.

Talking at last

Image caption The New Excelsior Theatre in South Mumbai has been around since 1974 but now times are tough

The association blames the closures on Maharashtra's high rate of entertainment tax.

Its president, R V Vidhani, says that cinemas must pay a tax for every ticket sold, and this makes it hard to break even.

"We are paying an entertainment tax, which is 45%," he says.

"It's the highest of all states across India. The majority of the states in India pay zero entertainment tax."

Mr Vidhani says his members had decided to go ahead with a one-week closure after getting no response from the state government on the matter.

The authorities have now agreed to meet and discuss the issue, he says.

But cinemas will remain closed until Friday as planned.

Cricket fever

It is not just a high tax rate contributing to the dwindling number of traditional cinemas, however.

Large overheads and declining box office takings also make times tougher.

Mr Vidhani has run the New Excelsior Theatre in South Mumbai since 1974.

Image caption The centre of Mumbai has many old and crumbling cinemas

Last week a screening of Bollywood movie Tanu Weds Manu sold just 71 tickets despite a capacity of more than 1,000.

It is tough for Manoj Desai too.

He owns a number of single screen cinemas in Mumbai, including the Gaiety Galaxy. He says typical occupancy is between 15% and 25%.

"You'd be shocked," he says, pointing out that he has an audience of less than 50 in a cinema that seats 1,000, and just 135 visitors in another that seats 800.

Whether it's a full house or an empty screening, running costs are more or less the same.

"I'm running, the show must go on, but the expenditure is unbelievable," Mr Desai says.

"Air conditioning, regular business - every expenditure is the same, but the income has stopped."

The cricket World Cup is not helping matters, according to Mr Desai.

"The World Cup is creating the biggest problem," he says. "These people are crazy so far as the cricket is concerned. When India is playing, occupancy [in the theatre] is just 15%."

New rivals

Mumbai's city centre is dotted with empty or derelict cinemas.

So after remaining empty for six years, the Novelty theatre is perhaps more fortunate than its neighbours.

It is to be reborn as a four-screen multiplex cinema.

Over the last decade the number of multiplexes in India has risen sharply.

Despite higher ticket prices, with more choice on offer and typically newer facilities they pose stiff competition to the traditional single-screen theatres.

Jehil Thakkar, executive director, media and entertainment at the consultancy firm KPMG, says that whilst entertainment tax is an issue, market forces are at play.

"Competition from the multiplexes is really tough," he says.

Image caption Manoj Desai owns the Gaiety Galaxy theatre, he says occupancy has dropped

"Then there is competition from the movie window being narrow. Movies are being released much quicker on television than they used to be [so] people can pretty much watch movies for free at home.

"With rising incomes, everyone's going out and buying DVD players or VCD players. Content is available for the asking whether it is official or pirated."

'Losing battle'

Outside the Gaiety Galaxy, one film-goer says television is the reason why he has scaled back his cinema visits.

"It's showing the latest movies now, you don't have to spend money or pay so much, and you can get the DVD," he says.

Unless single-screen theatres can become special destinations in their own right, whilst also offering up-to-date facilities, Jehil Thakkar thinks the decline is a trend that will continue, especially as multiplex cinemas spread to smaller towns.

"They are large corporate chains," he says.

"They have the ability to spend money on branding and advertising, so to a large extent [the small cinema] guys are fighting a losing battle."

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