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Cinemagoers share GST thoughts

Writer: Naseem Randhawa

"Show me the money!" is what Jerry Maguire would say if you told him the prices of most things are expected to rise with the impending Goods and Services Tax (GST). However, we do not live in a movie world surrounded by movie clichés and also, we're not brazen risk-takers like Maguire.

Come 1st April 2015, when the GST is in effect, there have been many reports that there could be a rise of cost for most goods and services, especially in the entertainment line which already comes with its own tax; the 25% Entertainments Duty.

As hardcore cinema-going movie fans ourselves, we at Cinema Online are particularly interested where cinema tickets are concerned and have thus conducted a survey to gather feedback from the general public on their thoughts if ticket prices with the existing Entertainments Duty were paired with the GST.

Here's what they have to say.

General public

Results of the survey conducted by Cinema Online in December 2014.

With 94% of the survey respondents made up of those who love going to the cinema, a whopping 89% said "Yes" when asked if they thought the current 25% Entertainments Duty rate is set too high.

Almost 94% of the respondents claimed that they will be going less to the cinema if the prices of cinema tickets were to rise with the double taxation.

Business analyst Santhya Maria, 27, said, "If there is a significant increase of cost for cinema tickets after being taxed twice with the Entertainments Duty and the GST, I think I rather just stay at home and watch Astro (cable TV)."

Added Maria, when one goes to the cinema, it's not just the post-GST cost of tickets to consider, but also other factors of expenditures that come into play; like petrol to drive to the cinema, parking ticket fee, grabbing a meal before or after the movie and concession snacks during the movie, all of which she says, is a norm for most cinema-going habits.

"When all of these expenses are added up, I'll actually be spending a lot more considering everything is hiked up as well."

Should ticket prices increase when the GST is implemented, 89% of the respondents cited that they would watch movies online, on DVD or even download them.

When posed with the question on Cinema Online's Facebook page, many reiterated that they would turn to piracy.

 


Feedback on our Facebook page gathers most would resort to piracy, online streaming or downloading movies instead.

However, a small percentage of cinemagoers said that going to the cinema is a luxury and not a necessity. Therefore those who can afford the activity can surely fork out the extra 6% GST tax.

Corporate communications executive, Liew, 30, said, "Let's say a cinema ticket costs RM14 and so the 25% Entertainments Duty of that would be RM3.60. With the added 6% GST, an extra RM0.86 will be charged. I think that is not too bad."

"However if I bring 10 of my friends along, I would be forking out an extra RM8.60. Now that is a little worrying."

Others however question why is there a need for cinema tickets to be stacked with the 25% Entertainments Duty tax that is chargeable per ticket when the GST comes in.

Syamir, 42, a father of two kids who visits the cinema at least twice a month had this to say: "If the government says the GST is a must for all consumer products and goods, then I think the Entertainments Duty should be reduced to fairly balance the cost for cinemagoers. The Entertainments Duty is just too high and it would help if it was reduced."

When mentioned that part of the Entertainments Duty objective was to channel it back into the industry, Syamir added, "The Entertainments Duty is provided as rebates and incentives back to the local film producers anyway. I don't think a slight reduction would hurt any party as lower ticket prices may help boost more ticket sales for their [local producers] movies."

The future of the cinema industry

With the implementation of the 6% GST for cinema tickets over the 25% Entertainments Duty, cinemagoers can expect a marginal increase for cinema tickets. But with more and more options available for people to watch movies via cable TV's on-demand services or through online downloads within the comforts of their own homes, will this new implementation of double taxation hurt our cinema industry that's currently trying its hardest from losing their audience to faceless competitors ?

This is worrying, since a recent report published by the global financial firm, PricewaterhouseCoopers (PwC), stated there has been a significant decline in cinema attendance in North America. The research from PwC attributed the country's new 20-year low to soaring prices of cinema tickets.

"High ticket prices are, by far, the number one reason for dissatisfaction across age demos and by movie-going frequency. Despite advanced technology, better seating, improved concessions and the return of 3D movies, the negative of higher ticket prices is difficult to counter-act." – PwC report

If cinemas in North America are suffering a drop in attendance due to discontent over ticketing prices, what's to stop the same from taking place here?


For the year 2013, the total box office collection according to FINAS for both international and local films is stated as RM692.17 million. The collection figures for 2014, are to date not ready, and have only reported collections up to May last year which is, RM267.38 million.

Box Office Mojo states that the annual collection for 2014 is RM593.68 million, but this is only for international movies and not locally produced films.

Looking at the collection of locally produced films, the drop of box office collection is more profound. There has been a steady decline of collections from 2011 which had produced 49 films collecting RM126.49 million, to 2014 which produced 81 films (almost double the amount) and managed to collect only RM73.86 million.

Could this be proof that people are already opting to watch movies by other means to avoid paying for cinema tickets? If so, what are the ways to encourage attendance and will a reduction in ticket prices help?

Describing a Catch-22 situation, an insider in the local production industry who wishes to remain anonymous, summed up for Cinema Online on the implication of the double taxation effect of GST paired with the Entertainment's Duty saying, "Since the Entertainments Duty is collected for the local film industry, what is the point if higher ticket prices post GST would see less people willing to pay to watch movies at the cinema? What happens to the collection of the Entertainments Duty then?"


Cinema Online, 23 January 2015

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