Karnataka government hikes licence fee for theatres by 350%

Mangalore Today News Network

Bengaluru, Sept 13, 2018: Even as owners of theatres and multiplexes rue the fall in number of moviegoers, the state government has increased the annual  licence fee for movie halls by a whopping 350%. Theatre owners, who have been paying a licence fee of Rs 1,000 for 100 square metres for the past two decades, will have to shell out Rs 4,500 for it now. Theatre owners warn the hike will have a cascading effect on the Kannada film industry as the burden will be passed on to moviegoers who are already complaining about tickets becoming costlier.

According to a notification issued on August 30 by the home department, the licence-fee-hike is directly related to the entertainment area: for every additional 50 sq mt after 100 sq mt, the fee payable will be Rs 2,250. The earlier fee for every additional 50 sq mt was Rs 500.

A senior IAS officer said: “The licence fee for theatres had not been revised since 1994 and the hike is part of the effort to boost revenue. Moreover, the Kannada film industry has been growing and ticket rates are quite high.”

‘Hike is death knell for film industry’
Film exhibitors are appalled by the hike in annual license fee for movie halls. “The hike sounds the death knell for Kannada film industry. The hike is steep and we don’t know what parameters were used to decide it. This will make business difficult for theatre owners,” said Thomas D’Souza, exhibitor and vicepresident, South India Film Chamber of Commerce.

Another exhibitor said: “A theatre on a 5,000 sqft plot used to pay Rs 3,000 as annual licence fee. But following this hike, the theatre will have to pay around Rs 20,000. Currently, Sandalwood releases more movies every year but the number of people coming to theatres is decreasing. One reason for decrease in footfall is price of tickets which went up after the introduction of 18% GST (goods and services tax). The government is pushing theatre owners, who are struggling to break even on a daily basis, to the edge by increasing the licence fee.”

The worst affected will be the large, single-screen theatres in B and C centres (non-Metro cities), said D’Souza. There are over 700 such theatres across the state and mostly in B and C centres. “These theatres are usually constructed on large plots. As the revised hike does not differentiate between Metros and small towns, big theatres in small towns will be affected,” D’Souza added.

Exhibitors said they’ll give a representation to the government to reduce the fee or will be compelled to increase ticket rates.