Relief for multiplex, single screen theatre owners as govt waives of 1% rent on public service films

In a relief to exhibitors and distributors, the central government has decided to waive off the 1% rent which was earlier levied by the Films Division on the different public service awareness films which were procured from them. 

It is compulsory to screen public service awareness films in theatres before the main film is screened. 

While the waive-off will hugely benefit multiplex and theatre owners, it may not reflect in movie ticket prices. 

The decision was recently taken by the Information and Broadcasting (I&B) ministry following repeated demands from the film industry since the 90s, who cited reasons such as a decline in revenue and delays in getting their cinema licenses renewed. 

According to officials from the I&B ministry, theatres had to compulsorily pay 1% of the net ticket revenue as rent for procuring public service films from them. There was an agreement to this effect between the film industry and the I&B ministry in 1958.

“A lot of questions were raised by film distributors and exhibitors over why they should pay the 1% rent. They also questioned that if they will have to pay the rent at all, why should they not acquire such films from others, aside Films Division. The decision was taken in the backdrop of that,” a senior official from the I&B ministry said. 

“The idea was to encourage showing public awareness films in theatre, even though it is not compulsory for them to procure such films from Films Division. Not many make such films, anyway,” said the official.

Sources said the decision will benefit as many as 9,000 odd cinema theatres of the country, including single screens and multiplexes. 

"It will also save theatre revenue and ease the process of obtaining cinema license," an official said.