MK’s latest Pro-Poor Gimmick

The guardian angel of the poor, M Karunanidhi has decided that the maximum price of a cinema ticket in an air-conditioned hall cannot exceed Rs 50.

An official release here said the Chief Minister M Karunaidhi, announced a minimum ticket rate of Rs 10 and maximum of Rs 50 for A/c theatres and Rs 7 and Rs 30 for non-A/c theatres in the corporation areas.
The rates would come into effect from January 1. The release said the Chief Minister declined permission to theatres to hike ticket charges for a period of two weeks when new films were exhibited(link)

Inox and PVR would definitely reconsider their decision in the light of this new rule, while Sathyam, Sangam and Mayajaal will be adversely affected. The immediate impact would be the loss of investment and employment generated by the multiplexes.

I’m usually against any form of governmental intervention, but in this case I’m happy the government has issued a price ceiling. The ticket rates at Sathyam are absurd to say the least. When Sree was opened, the maximum ticket price was Rs 60, and today the minimum ticket price is Rs 75, while the facilities have not changed. Over time one would expect the ticket prices to reduce, but in this case Sathyam Cinemas have managed to exploit their monopoly power and increase the ticket prices. If the market is competitive then I’m against any form of intervention, but in this case the market is imperfect. PVR, Inox, Sathyam, Mayajaal and Sangam can easily collude and fix the prices. The average consumer in that case, due to a lack of alternative would have to grudgingly pay the exorbitant ticket prices.

17 Comments so far

  1. siv (unregistered) on December 21st, 2006 @ 9:26 am

    I think this is a great thing done by him, it will stop the monopoly enjoyed by some big theaters especially mayajaal and sathyam.

  2. Mukunth (unregistered) on December 21st, 2006 @ 9:55 am

    Will the government also take a look at the prices of eatables inside the theaters ?? If the ticket prices are absurd, the prices of the eateable (especially, packed items like chocolates et al) are insane, to say the least.

  3. Muthiah (unregistered) on December 21st, 2006 @ 10:03 am

    Can we call Sathyam’s and Mayajaal’s pricing as ‘value for money’ rather than criticsing them? While the move is indeed a pro poor act, does everyone who goes to Sathyam and maybe Liberty theatre feel the same? The sound systems in Sathyam complex are awesome, aircondition is great, facilities are world class like internet booking and what now? So what is essential here is to understand the strategy these cinema halls adopt. If these halls were to maintain the same standard as liberty or indira theatres, but price any differently, ‘am with everyone to criticise on their pricing…

  4. raj (unregistered) on December 21st, 2006 @ 10:34 am

    Vatsan, will you also argue that Taj, park sheraton, Chola sheraton, Merdien, have colluded to keep the price of their buffet lunch over Rs 600/-, thus denying the common man the possibility of having a five-star lunch, and that Govt should step in and put a ceiling of Rs 100/- on the price ? Because, they operate in an imperfect market where there is no competition?

    Come on. There are no barriers to setting up a 5-star hotel or a cinema complex .If you have the money and the enterprise, you can start one. Again, ‘cinema’ is not an essential commodity that it should be controlled. Anybody who finds the price high has the option of not patronising the theatre.

    Govt is playing to the galleries, being populist and, in the process, is stifling private enterprise. Unless you allow theatres to make handsome profit which they can re-invest and expand,the industru won’t grow.

  5. Narayan (unregistered) on December 21st, 2006 @ 11:06 am

    Who is to decide what price is high and what is reasonable, There are people ready to pay for that kind of service and nobody is forcing it on them. Will the government bring a rule that SUN tv should not be a pay channel since it was quite profitable even before turning to pay channel or can the government cap the ad rates in SUN TV to that of other private channels?

    This is a very regressive move, now what is going to happen is that tickets are going to be sold in the black instead of the counters at the same price as it is today.

  6. annoynomas (unregistered) on December 21st, 2006 @ 11:49 am

    Only in ‘MuKaPoohar’…

    If you protest this JackAss moment…

    Next time the price reduction will apply only to 69% of the Muttal Kazuthaigal’s children, aunts uncles, cousins,nephews, nieces, illegitimate children and the Tamils from the south of the border.

    Brahmins and South Koreans need to deposit
    Rupiah 200 in the ‘Hundai’ in front of the theatres for building statues to control traffic and release stamps for licking pleasure.

    Next, a govt. order will be promulgated that
    JackAss will be the official mascot of MuKaPoohar
    replacing the Brahminical HolyCow and citizens
    will be requested to feed the ‘Hindu’every chance they get while taking practical training lessons driving to office and trips to satisfy spouses.

  7. KR (unregistered) on December 21st, 2006 @ 2:48 pm

    Stupid move. Is he going to do anything about the spiraling real estate prices? How about regulating the pricing of the cable industry?

    If u think the multi-plexes are charging a lot of money, don’t go there. With more such complexes in the offing the market would have adjusted accordingly. This is a retrograde step and does not bode well.

  8. Chenthil (unregistered) on December 21st, 2006 @ 3:47 pm

    Chances are, after due representation by Theater owners the government will understand their woes and repeal this move.

  9. * (unregistered) on December 21st, 2006 @ 6:55 pm

    Your post is funny. I don’t mind shelling out those extra bucks at Satyam cos it’s the only theatre in city where you can have a nice movie going experience with Family. Front benchers and people who make snide remarks are automatically chafed out by the price tag. Satyam is not the only air-conditioned theatre in Chennai, if you want to whistle, clap, stand on your chair and scream Thalaivaaa there are zillion theatres with reasonable price tag.

  10. si (unregistered) on December 21st, 2006 @ 7:24 pm

    That is one way to look at it. What about now even the Lower middle class can go to the multiplexes(will the guards allow them to enter). Which means more people will go to multiplexes than before. Which means more money. I think this might actually work. Because right now the lower middle class dont get to go to the malls and multiplexes because the ticket proces are too high.

  11. Govar (unregistered) on December 21st, 2006 @ 9:09 pm

    I can’t believe this post is a tacit support to the Govt. control on pricing. You guys are playing with free market economics that has worked marvels all over. There is a demand, and there is a supply and the prices have been set.

    It maybe true that prices at Satyam are a lil’ steep, but lets wait and watch till the other multiplexes come in. The prices have to moderate.

    As someone mentioned earlier, I don’t mind a whisker paying 100 bucks for a peaceful movie experience. Peoeple in cities like Bangalore rarely create nuisance even at lower price theatres. I watched Rajni’s Baba for 40 bucks in Bangalore in the first week and was astonished and delighted to find the theatre queit – I could actually watch the movie! The only way you can filter this unruly crowd (which, for some reason, is a MASSIVE number in chennai) is to keep the price ceiling.

  12. Govar (unregistered) on December 21st, 2006 @ 9:11 pm

    Correction: The last sentence of my comment has to be “The only way you can filter this unruly crowd (which, for some reason, is a MASSIVE number in chennai) is to set high prices.”

  13. Thad E. Ginathom (unregistered) on December 21st, 2006 @ 10:24 pm

    From colour televisions to cinema seats.


    But how about some government?

  14. Anon2 (unregistered) on December 21st, 2006 @ 11:33 pm

    This new rates, at least according to news,is supposedly based on the recommendation of theatre owners (you might have seen them together with CM in television).

    Why would they do that? To make less money ?

  15. anoan (unregistered) on December 23rd, 2006 @ 12:14 pm

    Yes, Chennai metblog is a monopoly it must be merged with ‘the hindu’ and the chennai metblog authors must pay for free circulation of chennai metblog weekly along with the hindu sunday magazine.
    How about that vatsan?
    just b’cos you studied economics the wrong way you cannot go on like this stupidly.

  16. SamY (unregistered) on December 23rd, 2006 @ 3:57 pm

    dude ur young blood and being a bachelor the price does seem exorbitant … even u’d be okie with a 10 bucks ticket

    but what bout ppl who come with a family / kids and expect a decorum at the theatre? leave ppl in for 10 bucks n all they make is a raucous … thats certainly not what many ppl want … thats y they pay the extra to watch in peace … and style for a few ;))

    if the govt did control prices of essentials then there is a point … ppl are having a hard time for lively hood and such luxuries are given? what scope do they have to improve?

    but well hez keeping to his policy of making ppl even more dependent … helplessly ;) … nice strategy by MK

  17. Nishanth (unregistered) on December 28th, 2006 @ 3:44 am

    Vatsan you had mentioned that the ticket prices at Sree has gone up since the time it was opened,while there was no change in the facilities at the theatre.But I beg to differ,since the opening of Sree they have invested a lot in digital projection,new services and general infrastructure of the theatre.
    They have invested in stuff like more parking space,Internet booking/pre-paid card system.I think it has also been 5 or 6 years since the opening of this theatre,prices of everything has gone up in Chennai when compared to what they were 5 years ago.

    The only way to recover the amount they have invested and to make a profit is by increasing their prices.

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