Mint Quick Edit | A price cap on cinema tickets? Bad idea
Karnataka’s government has issued an order capping the price of movie tickets at ₹200, inclusive of entertainment tax, for all language films at theatres, including multiplexes. This follows an earlier attempt in 2017, when a similar cap was placed on movie ticket prices but was lifted after multiplex owners took the matter to court.
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As reported, the idea is to promote regional cinema, although it’s unclear why the order covers all languages. That aside, it’s a bad idea for the state to interfere in how prices are set in a market. This involves movie producers, exhibitors and audiences, with no role for governments except to clear films for screening.
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The revenue losses that a price limit will cause could upset business models and squeeze the supply of movies in the state. Snazzy multiplexes may find the going especially hard, given their investments in comfort on the assumption of customers being ready to pay a premium for it.
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It seems plausible that even more film-watching will move away from cinema halls to devices that stream content off the internet. Price controls in fields of discretionary spending tend to have unpredictable effects that may or may not include their intended purpose.
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