Dr. Adrian Athique, the current Chair of the School of Arts, University of Waikato, New Zealand visited Centre for Culture, Media & Governance to deliver a lecture on ” From Cinema Hall to Multiplex: A Public History“.

The Indian Medialogue presents here the transcript of the lecture. The first part is available here.

Aftermath of Independence: Taming the parallel economy

 In the early postcolonial period, we see the setting up of a film inquiry committee in 1951. An interesting thing about this committee is that it is primarily set up to deal with the problem of black money. During the 1940s, a lot of cash moves into the film industry. It is a way to make quick money, and to transfer it from various kinds of wartime activities that may or may have not been legal. It is used as a means of withholding money that would have been collected via taxation by the Raj in its last years. And of course, the glamour of film attracts money.

This means that the political economy of the film industry is transformed by the sudden availability of lots of cash, particularly untraceable cash, which transforms the system of production. The government in the early years is quite keen to regularize this problem: it wants people to pay their taxes and it wants to list dodgy cash swirling around in the film industry. But the inquiry committee comes back with a series of recommendations which support the film industry, calling for government support of the film industry but not nationalization. These recommendations seek to give the film industry an official status and recognition from the Government of India, but this does not happen as the government ignores the recommendations for a number of reasons.

There is also the problem, of course, of attitudes towards the cinema of the day. Indian cinema is seen as a dangerous source of Westernization in the 1950s and as a site of moral decay – particularly by Mohandas Karamchand Gandhi, who spoke of how long he could wait for cinema. A prevailing attitude is that everybody should be watching documentaries and scientific things, which help us become more advanced and to develop. Gandhi was just too serious a man to really back up cinema in that sort of way.


The rebirth of the Films Division, which was initially closed down after Independence and reinstituted four years later, is seen as a move towards promoting government propaganda. But it leads very much to the discourse of development. Censorship continued even after Independence. There is also a move towards classicism, and institutions are set up to promote India’s classical culture, as opposed to the contemporary, modern, hybrid and globalised Indian culture of the day, which is seen as problematic in various ways. Because of the material needs of the country at the time, there are building restrictions: so if you need a cinema hall, you need concrete, you need brick, you need various things which are all restricted because they move towards important purposes. This means that building cinema halls becomes quite difficult in the 1950s.

There is also an entertainment tax, which had earlier been levied at 10 to 12 percent [of the ticket price], but is now doubled and continues to increase. So while cinema is not seen as socially productive, it is also viewed as a useful source of revenue. The fact that the revenue is collected at the state level is also significant. The entertainment tax becomes very much a feature of cinema from that point onwards and has many distorting effects as time goes by. This tax has nothing to do with which film is being shown: it could be a good or bad or foreign or Indian film, but it should be taxed, regardless.

 Fragmentation and regionalisation

 So, if we think briefly about the sort of media structures that emerged during the early postcolonial period up to the 1970s, we see divisions between the state-owned and private sectors. Information and communication are the preserve of state-owned media, while entertainment is a private concern. We also have a further division between the organized sector and the informal economy (or the unorganized sector, if you like). The film industry gets no government recognition and has no access to official sources of finance. It therefore relies more and more on black money to operate. It is not run by business houses or a corporate system of any kind. Instead, it functions on a series of ad hoc arrangements of great complexity and depth: there are hundreds of producers and distributors, and thousands of cinema halls which are mostly owned by families or individuals.

“There is so much leakage of profits in the system that they eventually go bankrupt. The profits do not come back to the producers from cinema halls that are successful, and so the system breaks down.”

One of the reasons for this state of affairs is that the national cinema machine set up in the 1920s collapsed during the Great Depression. [Producers and distributors] supplying cinema halls across India and further a field in South-East Asia need to rely on returns from ticket sales. But there is so much leakage of profits in the system that they eventually go bankrupt. The profits do not come back to the producers from cinema halls that are successful, and so the system breaks down. There is always a need to spread the risk among production, distribution and exhibition as cinema is a very risky business.

But I’ve gone on too much on the subject of the political economy. The big part of the story is when I get to the present year, the era of liberalization, and the attempt to shift the film industry into the organized sector. At the same time, of course, a lot of state-owned organizations are also being shifted into the private sector.

The legacy of the distinct business cultures of the different modes acquires significance. Cinema has always been seen as an industry which is slightly dubious and needs policing and regulation. The audience is also thought to need some kind of regulation or management. So what happens with the entertainment tax? After reaching figures of 60 to 75 percent of ticket prices in some states, the tax has a series of effects. It raises the prices of cinema tickets generally, and causes widespread under-reporting of box office sales. If you are an exhibitor screening to a full house, you pay taxes after reporting only a half-full house. This means there are no reliable data for Indian cinema audiences. In the United States, it is all too easy to find out how many tickets were sold back in 1934. But if you wish to find out the corresponding figures in India, nobody really knows: certainly, the producer never knew. And there has always been a deep suspicion among film producers that their audiences are bigger than the distributors tell them – there is this kind of tension. And this is all because of the problem of the tax, because if you actually reported everything you would have to pay an enormous tax.

This prevents the consolidation of cinema chains, because they aggregate the risk. If you are going to under-report, it is easier to under-report on one cinema as it is only one hall to inspect. But if you buy ten cinemas, you are much more visible, and therefore you don’t want to stick your neck out. The tax thus prevents cinema chains from emerging. But it also means taxing the urban poor at a time when people are migrating to the cities. Cinema is the prime mode of urban entertainment and so allows wide revenues.

“The tax also becomes a political device at the time for controlling cinema content. For instance, in Karnataka, they removed the entertainment tax on Kannada films but taxed other films, which encouraged the cinemas. Down town, only those tickets were allowed to be sold which were for films that linked identity, state and political group.”

The tax also becomes a political device at the time for controlling cinema content. For instance, in Karnataka, they removed the entertainment tax on Kannada films but taxed other films, which encouraged the cinemas. Down town, only those tickets were allowed to be sold which were for films that linked identity, state and political group. It was similar in other states in the south. The reduction of the entertainment tax, the easing of rules for the construction of cinema halls because of their links to political parties, and the emergence of film stars as political figures are relevant factors. This is why south India has so many more cinemas per head than the north, and under-screening is a much bigger problem in the north – it is because at that point in history, it was decided to make the entertainment tax a state matter. This is the significance of that decision.

Nonetheless, cinema halls also reflect the ferment of Indian democracy as a place where people of all backgrounds from all across the country come together in a sort of regularized public ritual where the kind of national ethics that are screened enter the consciousness of public culture, though not in an uncontested way.

Access to movies and ‘down-market shift’

Thinking now into the 1970s, Indira Gandhi was a different figure from her father Pandit Jawaharlal Nehru, particularly in terms of her interest in the media. The role of the Minister of Information and Broadcasting, the setting up of television, and perpetual official delays meant that the 1970s were a period of urban, political and economic crises of various kinds. The response of the time was a more pronounced programme of state socialism.

Emergency reportedThe Emergency, of course, was a complex attempt to lock down various vested interests that seemed to stand in the way of development – but to win popular support for this, it was necessary to redistribute some benefits. Part of that effort was to bring in a fixed number of cheap seats in cinemas, so that people with the lowest incomes could have access to them.

That is why, when dealing with the problem of large groups of men moving into the cities from the countryside and living hand-to-mouth in crowded public places, one way of getting them off the streets was to get them into the cinema halls. This was also a vote-winner for the politician who could bring in legislation to give everybody cheap access to the movies, which was a very popular move. And of course, this led to stagnation in ticket prices. As the prices were fixed at that level, films started targeting that demographic more specifically, along with other social groups that had so far attended cinema less – the term for this is “down-market shift”. The 1970s and ’80s thus saw the decay of cinema halls, because the cost of repairing and refurnishing them was more than what they were collecting. That was not the intention of the policy, of course, but that is what happened, and there was a further development of the regional dynamic which I talked about earlier.

Another really significant policy that came about in the 1970s was the Urban Land Ceiling and Regulation Act. This, again, was instituted at the state level. It was intended to restrict urban land holdings and property speculation – in essence, to prevent people holding large plots of land, as that obstructs urban development plans. It was meant to restrict landlordism in order to ensure development. It was also supposed to alleviate the distress of the lower middle classes by keeping their rent down and guaranteeing them housing by restricting [commercial] development in slum areas, which was becoming a significant problem. As a national initiative implemented at the state level, this policy also restricted the opportunities for the commercial development of cities. It also encouraged people not to invest in property but in industrial capacity. It especially sought that those who had the money invest in industry, as it was the need of the nation, rather than cinema halls and shopping malls. That made it hard to acquire cinema halls or to get permission to buy enough land to construct them, which perpetuated the problem that there were not enough cinema halls. You may know that India is the most under-screened nation per head in terms of cinema halls. The policy also made it difficult to sell cinema halls, just as it was difficult for other people to acquire them from you – which meant it became very difficult to get rid of halls when they were not making profits.

Bangalore cinema hallSo, in this picture which I showed in the first slide, we see one of the scores of cinemas in Bangalore which cannot be sold but where the ticket prices are not enough to generate profits. Some of them have been re-purposed into wedding halls, but there are still plenty of cinemas in the city because of the problems arising from this policy. Of course, in Delhi you get legal construction as a response for this regulation.

So these are the kinds of complex policy arrangements which are not particularly about the content of films but about other things, and which lead to a film industry that is largely disorganized, small-scale and split up, and to an exhibition infrastructure that is overburdened, nearly extinct and largely off the books.

Baroda cinema hallThis is a cinema hall in Baroda, so I shall again speak about this a little bit. Lots of people owned cinema halls for various complex reasons. They might have had other businesses too, but they owned cinema halls as a sign of prestige and also to maintain public relations. I have spoken to a lot of people who owned cinema halls and gave away free tickets to various municipal dignitaries, and to the police, which was seen as useful in a broader sense. At the same time, they did not want to incur any losses. So again, it is interesting that what cinema attempts to be is not always about cinema when you look into its economy. There are factors inhibiting its organisation on a corporate or industrial model: restrictions on building theatres or acquiring land, the construction costs, the lack of institutional finance – considering you cannot borrow money from banks – the urban land ceiling regulations because of which you cannot own enough land, and the entertainment tax. These are the frameworks that prevented things like [words indistinct] happening prior to liberalization, prior to the 1990s.

(To be continued)

Adrian Athique is also a fellow of the New Zealand India Research Institute. Previously, he was director of the Media, Culture and Society programme at the University of Essex and a Postdoctoral Fellow at the University of Queensland.

Athique has written extensively on media studies and sociology with an international focus. His research interests include media audiences, urban spaces, digital environments and the Indian film industries. His books include The Multiplex in India: A Cultural Economy of Urban Leisure (2010, Routledge, with Douglas Hill), Indian Media: Global Approaches (2012, Polity) and Digital Media and Society (2013, Polity). Athique has also published widely in international journals including Media, Culture and Society, Continuum, South Asia, South Asian Popular Culture and Contemporary South Asia.

Image courtesy

Logo of Films Division has been taken from its official website while collage of newspaper reports about the declaration of Emergency from www.jagran.com. Images of cinema halls are from PPT of Dr. Athique.