May 26, 2015
https://www.facebook.com/mehtarahulc/posts/10152795571101922
https://www.facebook.com/mehtarahulc/posts/10152795571101922
Why is food in theater so expensive? One reason is Municipalities NOT taxing closed malls and closed theaters !!!
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Over charging capitive audience demoralizes population at large, It LEGITIMIZES the "right" to extort from a captive audience before whole population, So IMO , excessive charges of food inside resturant doesnt demoralize because person in resturant isnt captive. Whereas excessive charges on theatre audience does demoralize audience.
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A person in food counter business told me that the theatre wants as much as 75% of sales (sales, NOT profit) from food they sell. So if popcorn costs say Rs 10 , say labor and electricity costs him Rs 5 , and if he wants to earn Rs 3, then he needs to charge at least Rs 60. If he charges Rs 60 , then theatre will take 70% i.e. Rs 42 and he keeps Rs 18.
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Is this true? Does anyone PERSONALLY know people in food business in theatres?
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The theaters have their story too. They say that 80% to 90% ticket revenue is taken away by .movie owners !! And a minum base price below which they wont even give. And sometimes they want 80% of tix revenue and would charge for at least 1000 seats regardless of how many actual sales they do !!!
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So theater owners make expensive theatres and pay huge electricity bills and staff salaries to run the theatres and they practically get nothing from tix sales !!! So they have to charge extra on food the audience eats.
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One solution is to make law that movie maker MUST charge same per audience amount from ALL theatres across India , on a given day. He may keep higher amount on day one and lesser amount on day two and change the amounts anyday. But he MUST charge same amount from all theatres on per seat sold basis. Also, movie maker cant deny a theatre from showing its film as long as theatre owner is paying the price.
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Many commodities and service have such "uniform charge" rules. eg taxi driver cant charge more because you happen to wear expensive cloths and have higher ability to pay. Same way, software company like microsoft cant charge more from banks or wealthy clients because they have more money to pay. And life saving medicine makers cant charge more from wealthy patient for SAME medicine. eg a person who has patent on heart medicine can easily put price as "1% of patient's net worth" in which case collect Rs 100 crore from very very rich guy while collect mere Rs 100 from some poor guy. But medicine manufactures are LEGALLY banned from doing do.
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So it is very much ethical to FORCE medicine makers to sell same medicine to all at same price and by same token, I see NOTHING unethical in forcing movie makers to collect same price from all theatres.
.
So now the threaters which offer better quality seats can charge more and keep the money, in which case, they dont need to charge a lot from food.
.
Over charging capitive audience demoralizes population at large, It LEGITIMIZES the "right" to extort from a captive audience before whole population, So IMO , excessive charges of food inside resturant doesnt demoralize because person in resturant isnt captive. Whereas excessive charges on theatre audience does demoralize audience.
.
A person in food counter business told me that the theatre wants as much as 75% of sales (sales, NOT profit) from food they sell. So if popcorn costs say Rs 10 , say labor and electricity costs him Rs 5 , and if he wants to earn Rs 3, then he needs to charge at least Rs 60. If he charges Rs 60 , then theatre will take 70% i.e. Rs 42 and he keeps Rs 18.
.
Is this true? Does anyone PERSONALLY know people in food business in theatres?
.
The theaters have their story too. They say that 80% to 90% ticket revenue is taken away by .movie owners !! And a minum base price below which they wont even give. And sometimes they want 80% of tix revenue and would charge for at least 1000 seats regardless of how many actual sales they do !!!
.
So theater owners make expensive theatres and pay huge electricity bills and staff salaries to run the theatres and they practically get nothing from tix sales !!! So they have to charge extra on food the audience eats.
.
One solution is to make law that movie maker MUST charge same per audience amount from ALL theatres across India , on a given day. He may keep higher amount on day one and lesser amount on day two and change the amounts anyday. But he MUST charge same amount from all theatres on per seat sold basis. Also, movie maker cant deny a theatre from showing its film as long as theatre owner is paying the price.
.
Many commodities and service have such "uniform charge" rules. eg taxi driver cant charge more because you happen to wear expensive cloths and have higher ability to pay. Same way, software company like microsoft cant charge more from banks or wealthy clients because they have more money to pay. And life saving medicine makers cant charge more from wealthy patient for SAME medicine. eg a person who has patent on heart medicine can easily put price as "1% of patient's net worth" in which case collect Rs 100 crore from very very rich guy while collect mere Rs 100 from some poor guy. But medicine manufactures are LEGALLY banned from doing do.
.
So it is very much ethical to FORCE medicine makers to sell same medicine to all at same price and by same token, I see NOTHING unethical in forcing movie makers to collect same price from all theatres.
.
So now the threaters which offer better quality seats can charge more and keep the money, in which case, they dont need to charge a lot from food.
Also, municipalities have policies of collecting near zero tax from shut down malls and shut down theatres. So many mall owners form cartels and shut down one of their malls. Let me explain.
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Say if 100 theatres are run in Ahmedabad with average capacity of 400 per theatres. Then there are 40000 seats per day. And at that supply level , price would be no more than Rs 100 per seat. So to decrease the supply , say 25 theatres are shut down. Now supply reduces to 30000 , and so higher prices can be extracted.
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IOW, if all theatres are "forced" to run, then most will have to lower the prices.
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Solution to this problem is --- Govts should impose UNIFORM tax of 1% of land value and construction sqft space , regardless of whether it is open or shut. And income tax they pay should be deducted. This will force all malls and theaters to remain open at least so that they collect enough revnues to pay taxes. This will increase supply and lower the prices.
.
All in all, we have too many mafia to deal with. And all can be dealth with by careful re-drafting of law-drafts. Sadly, instead of law-drafts, activists are wasting time in slogan shouting. And activists in OTHER countries such as USA spend LESS time in slogan shouting and spend more time on law-drafts,. And so those nation are moving ahead, and we are stuck.
.
.
Say if 100 theatres are run in Ahmedabad with average capacity of 400 per theatres. Then there are 40000 seats per day. And at that supply level , price would be no more than Rs 100 per seat. So to decrease the supply , say 25 theatres are shut down. Now supply reduces to 30000 , and so higher prices can be extracted.
.
IOW, if all theatres are "forced" to run, then most will have to lower the prices.
.
Solution to this problem is --- Govts should impose UNIFORM tax of 1% of land value and construction sqft space , regardless of whether it is open or shut. And income tax they pay should be deducted. This will force all malls and theaters to remain open at least so that they collect enough revnues to pay taxes. This will increase supply and lower the prices.
.
All in all, we have too many mafia to deal with. And all can be dealth with by careful re-drafting of law-drafts. Sadly, instead of law-drafts, activists are wasting time in slogan shouting. And activists in OTHER countries such as USA spend LESS time in slogan shouting and spend more time on law-drafts,. And so those nation are moving ahead, and we are stuck.
.
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