Will PVR-INOX merger give them monopoly over ticket prices? CCI doesn't think so

Every film buff in India knows about rising ticket rates and overpriced popcorn which can spoil the moviegoing experience. Earlier this year PVR raised ticket prices by 23 per cent, citing labour costs and inflation as reasons, as business picked up after the pandemic. The multiplex chain’s boss also attributed exorbitant food and beverage prices to higher expenses involved in operating multiplexes as compared to single-screen theaters.

But a complaint raising concerns over the PVR and INOX merger creating a monopoly, has been dismissed by the Competition Commission of India (CCI). The regulatory body which promotes fair trade, said that apprehensions about possible anti-competitive practices can’t be probed. The complaint had been filed by a non-profit called Consumer Unity & Trust Society (CUTS), after the merger which was announced on March 27.

Creating a monopoly?

By coming together, the two largest multiplex operators now control more than 50 per cent of the market share through 1546 screens spread across Indian cities. This gives them increased power and freedom to influence ticket rates, and limit choices for moviegoers. In its complaint, CUTS had mentioned that this could deplete the overall experience for cine buffs and have an adverse impact on the film exhibition sector.

What’s in it for the stakeholders?

Apart from creating value for stakeholders such as real estate developers and customers, while taking top of the line movie experience to Tier II and Tier III cities, countering the rise of OTT platforms is also a reason behind the PVR-INOX merger. Streaming sites such as Amazon Prime and Netflix have amassed a sizable number of subscribers during the pandemic, and the duo seeks to create scale for multiplexes to push back.

As part of the merger shareholders who have 10 shares of INOX will get three shares of PVR, and new cinemas will open under the PVR-INOX banner. But only time will reveal the impact of this deal on the pockets of the average moviegoer.