India’s cinema exhibition industry seeks policy reset amid rising costs and shrinking footfalls

India’s cinema exhibition industry is pressing for a regulatory rethink as rising operating costs, shrinking footfalls and changing viewing habits strain a business that has yet to recover its pre-pandemic momentum, according to a new EY study commissioned by the Multiplex Association of India (MAI).

Titled The Story of Film Exhibition in India, the report positions theatrical exhibition as a crucial but increasingly fragile link in the country’s media and entertainment value chain. While cinema-going remains culturally relevant, the data suggests the economics of running theatres have diverged sharply from broader growth trends in the economy and the M&E sector.

EY’s analysis shows that India’s theatrical revenues have declined at a compounded annual rate of 0.2% between 2019 and 2024, even as India’s GDP expanded at 6.6% and the M&E sector grew at over 5% annually. Gross theatrical revenues fell from ₹19,100 crore in 2019 to ₹18,746 crore in 2024, while revenue per screen dropped by about 5% over the same period.

Falling footfalls and structural limitations

Footfalls tell a starker story. Total admissions fell 41% between 2019 and 2024, from 1.46 billion to 860 million. Fewer than 150 million Indians—roughly 10% of the population—are estimated to visit cinemas annually, underscoring how theatrical exhibition now caters to a narrow slice of the market.

Structural constraints compound the challenge. India has just under 10,000 cinema screens, translating to around seven screens per million people—far below peers such as the US, China or even smaller European markets. Screen density has declined since 2018, largely due to the closure of single-screen theatres, while large multiplex chains have cut back investment by about 12% since 2019.

On the demand side, the report highlights a feedback loop between content quality and consumption. More than half of surveyed cinemagoers cited deteriorating content quality as their main reason for staying away from theatres, while producers flagged a shortage of strong scripts and writers. At the same time, shortened theatrical windows—now as low as four to eight weeks before films debut on streaming platforms—are altering audience behaviour. About a third of respondents said they would rather wait for an OTT release if the streaming window is short, directly impacting box-office potential.

Policy frictions and the case for reform

Cost pressures remain a persistent concern. Multiplexes pay electricity tariffs closer to commercial rates, which are significantly higher than those for many other consumer categories. Ticket pricing is further constrained by state-level caps and a GST structure that imposes 18% tax on tickets priced above ₹100—a threshold unchanged since 2017 despite cumulative inflation of over 40% during that period.

The EY report argues that these frictions limit the sector’s ability to invest, innovate and expand into underserved regions. Around 16,350 of India’s 19,000 pin codes have no cinema screens at all. EY estimates that doubling the national screen count to 20,000 could generate about 1.25 lakh additional jobs and nearly ₹950 crore in incremental tax revenues, provided regulatory bottlenecks are eased.

Rather than prescribing solutions, the study lays out a set of policy considerations for discussion. These include rationalising GST thresholds, granting industry status to cinema exhibition to lower input costs, allowing greater flexibility in ticket pricing, and encouraging longer theatrical windows through industry consensus. It also flags the potential for cinemas to diversify revenue by hosting live events, sports screenings and community activities, particularly during non-peak hours.

MAI said the findings are meant to inform dialogue with policymakers at a time when theatrical exhibition is undergoing structural change, not merely a cyclical slowdown. The association represents over 11 cinema chains operating more than 550 multiplexes and around 3,000 screens nationwide.

As digital platforms continue to reshape how Indians consume entertainment, the report’s central argument is that cinemas still matter—economically and culturally—but their survival will depend on whether regulation evolves in step with the market realities they now face.