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In India, the mushrooming of multiplexes has changed the dynamics of Bollywood. Production costs are now recovered in days, not months and viewers have accepted the concept. Indian cinema chains like PVR, BIG, Fame, Fun, Cinemax etc. are changing the rules of exhibition in the world’s largest film industry.

These Multiplexes are booming in every metro city (and now from what I hear it will be hitting the suburbs with a vengeance too). It attracts the young crowd with its glitz and glamor.

The average price of a movie ticket is also something on the rise today. On a weekend, a movie ticket will cost you anywhere between Rs.200 to Rs.300 compared to the Rs.50 or Rs.75 which traditional single screen movie theaters charge and the additional cost is well justified. These multiplexes offer you a good air conditioned environment, plush seats and a great movie experience. However, a very important part of the movie experience might have become the biggest problem for your pockets. I am talking about the Pop Corn and Cold Drink combo. I remember my trips to the movie theaters as a kid and eating many packs of Pop Corn with Pepsi, sometimes accompanied with tasty samosas. You could get the Pop Corn for Rs.10 and Samosas for Rs. 8. But all that is history now.

In the modern multiplex scenario, an average Pop Corn pack is Rs. 100 and Pepsi/Coke Rs.50 which is many times higher than their normal market price. I can still understand about restaurants and hotels charging more for stuff because at least you get some service attached to it – but that is hardly applicable in a multiplex – so I really don’t know why I should be paying more? and that too 5 and 10 times more.... These multiplexes also employ a huge security force at the gate they check each and every customer are they are not looking for a weapon they are looking for food . Even if are accompanied with kids or you a diabetic the security guards at the gate in most cases are instructed not to let anyone carry their own food or water. Therefore even if outlets like Big Bazaar sell popcorn at Rs.5 you are forced to shell out many multiples.

Once I mentioned this to a friend of mine who owns one of the leading multiplex chain... his answer was how will they recover all the capex costs and the huge rental costs they pay..... While I completely understood this rational, my key question to him was, when you were planning a Multiplex what was your main business plan? Was it to sell movie tickets or to sell expensive popcorn? Did the investors invest in the company thinking that a bulk of their profits are coming from the sale of popcorn? And if it indeed is true that movie theaters are only making money by selling expensive popcorn and other food items then there is a fundamental flaw in their business model and the movie business in India.

Movie ticket revenues gets divided between the multiplex, movie studio and not to forget the government tax. So typically 35% is govt tax and the balance is divided 60% (Multiplex) 40% (movie studio). However, as most of the multiplexes enjoy a tax holiday from the government, in reality they retain almost 75% of the ticket cost as their revenue. Out of a Rs. 200 ticket they would typically make Rs. 150. As compared to that, the money that you spend on refreshments is much higher at Rs 300 which directly goes to the multiplex pocket that too at a huge margin of almost Rs. 200. It sure looks like selling these refreshment is much more profitable than selling tickets of movies.

I know you are thinking, didn’t the government say that products have to be sold at their MRP price? You are right – the regulation is still in its place, but multiplexes have found a way to dodge that rule and they are doing that very well. Like the other day I wanted to buy a bottle of mineral water at a multiplex. The guy at the counter charged me Rs 25 for the same bottle that is sold outside for Rs 12. When I asked him why that was so, he told me that the bottle was specially made for the multiplex and hence it had a different MRP. And for items like samosas and popcorn, the MRP is determined by the Multiplex. So they were not breaking any rules :-)

Finally, I think movie studios should stop haggling with the government for cutting taxes and stop worrying about hits and flops. If they simply demand a cut from multiplex owners from the sale of popcorn and other refreshments – I think no movie studio will ever lose any money. It’s finally their movie which is driving the crowds to the Multiplex. And if the multiplex owners are really losing money they should increase the ticket rates so that all parties (govt, movie studio) also benefit with the additional revenue.

For now enjoy your movies at your local “Corn Plex” and getting cornned.