The latest decision of the YS Jagan Mohan Reddy government in Andhra Pradesh to enter into the business of online sale of tickets in cinema theatres has taken the Telugu film industry by shock and surprise. A Government Order (GO Ms No. 782) issued by Principal Secretary (Home) Kumar Vishwajeet, states that the state government has decided to take up online sale of tickets in theatres — both single screen theatres and multiplexes across the state. The order, which was dated August 31, came to light on Wednesday, and says that the state government will develop a portal for online booking of cinema tickets, similar to that of the online railway reservation ticketing system. This portal will be managed by AP State Film, Television and Theatre Development Corporation.
The government has constituted a committee to prepare a blueprint to develop the portal and implement the online ticketing system for cinema theatres. The committee will comprise Principal Secretary (Home) as chairman and principal secretary (Information Technology) as co-chairman.
The other members of the committee include the Secretary, Information and Public Relations (I&PR) and Managing Director of the AP State Film, Television and Theatre Development Corporation, representative of Commissioner, commercial taxes, Managing Director of AP Technological Services, joint collectors (revenue) of Krishna and Guntur districts, and Special Secretary to the IT department.
An official in the I&PR Department familiar with the development said that the people would have to book the cinema tickets only on this portal if they want to view the film in any particular theatre. Even if a decision is taken to allow the sale of tickets at the theatres, the tickets would be issued only through this portal at the theatre counters.
At present, the online cinema ticket booking is being done by a few private agencies like bookmyshow.com, but it is mostly confined to cities and major towns, and only in big theatres. In districts and other rural areas, cinema tickets are sold only at the counters in theatres before the show commences.
According to the official quoted above, the Jagan Mohan Reddy government has taken this decision after realising that the tax revenues to the state from the cinema theatres are meagre. “The GST from the Telugu films being screened in the theatres in the state is not even Rs 25 crore to Rs 30 crore a year, which is pittance compared to the business the Telugu film industry does every year. It is not even equal to the remuneration being paid to a big actor in Tollywood,” the official said.
He added that filmmakers make tall claims about the collections at the box office in order to project them as big hits, but the same figures are not reflected in their tax revenues to the state. “A producer claims his film has done Rs 100 crore business, but the GST from the film is not even Rs 1 crore to Rs 2 crore. How is it possible?” he asked.
At a recent official meeting, the Chief Minister is learnt to have told the officials to examine why the GST from the films had been so low. Apparently, he felt that there has been a lot of leakage of tax that is due to the state because of underplaying collections at the cinema theatres. During these discussions, the idea to take over the business of online booking of cinema tickets had come up. The Chief Minister felt that if the government itself handles the online ticketing in theatres, it would bring in transparency in the system and result in enhancement of tax revenue to the state. “It will be a win-win situation for both the film industry as well as the state government,” the official explained.
However, the film industry is said to have expressed surprise over the Jagan government’s decision to take over the sale of cinema tickets. In fact, the decision has come at a time when Tollywood has been requesting the state government to allow enhancement of ticket prices in cinema theatres to bail them out from a financial crisis induced by the COVID-19 pandemic.
“For the last one and a half years, cinema theatres have been shut down due to COVID-19. Many theatre managements could not bear huge maintenance costs including hefty power bills. Even after the government allowed reopening of theatres, the revenues have fallen drastically due to low footfall of audiences. So, we have asked the Jagan government to allow us to increase the ticket prices to offset our losses,” Sunil Narang of Asian Cinema told TNM.
Instead, the Andhra government issued an order in April, a few days before the outbreak of the second wave of COVID-19, reducing the ticket prices in “B”and “C” centres (towns and rural areas) to make the cinema viewing affordable to the poor.
“Most of the revenue comes from these theatres. If the ticket prices are reduced, it will adversely affect the film industry,” Narang said. Now, with the Jagan government coming out with the latest order to take over the cinema ticketing business, it came as a rude shock to the film exhibitors and distributors. They wonder how the government could enter into the sale of tickets, which is a private business.
“Comparing cinema ticket sales with railway reservation ticketing is ridiculous. Railways is a public sector entity, whereas the film industry is a private business. The government can take measures to see that tax revenue from the film industry is enhanced, but it cannot take over the cinema ticket sales,” an exhibitor from Andhra said.
Distributors and exhibitors are apprehensive that if the decision is implemented, they may have to run around the government to get their share of collections from online ticket sales. They suggest that instead of running the ticketing business, the government could tie up with private agencies like bookmyshow.com and oversee the collections so that there is no leakage of tax revenue to the state. “The government should call the exhibitors for talks and work out a solution,” Narang added.