Cinema industry has a history of around one hundred years in India. Cinema entertainment is by far the most important means of entertainment because of its extensive reach and popular appeal. It provides a means of entertainment which is derived from a well developed, formalised and highly commercialised sector of the economy. It is a subject that ought to be studied in detail with the help of formal analytical tools in economics. Such studies have not been undertaken so far in the Indian context. Some features of this industry are peculiar, paradoxical and to some extent disturbing. While cinema prices (i.e. price of admission to a cinema seat) have been declining over time in relation to the cost of inputs and to the prices of other consumer goods, a considerable proportion of cinema seats on offer remains unoccupied. The cinema industry in India is subjected to a number of taxes by Central, State and local Governments. The most significant tax is the entertainment tax which directly affects the consumers as well as the industry. This industry seems to be in a fragile condition because costs are increasing while the occuoancy ratio is low. Cinema industry is facing a tought competition now a days because of the phenomenal growth of television and videos.
In this book an attempt is made to explore the main features of cinema industry in India enompassing its logistics, the main issues faced by this industry in so far they lie in the interaction of market forces, demand and cost structures, the nature and impact of governmental control and taxation policies, the inter-relationship and the behaviour motivations of the decision making units, viz. producers, distributors and exhibitors.