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I have seen at least 3 or 4 such HTs in India. The cost is astronomical and one has to decide whether it is worth it. My nephew in the US has built a 30 seater HT (with Classe amp to boot) very much like a cinema hall with all the bells and whistles. The cost? - 500,000 US. It is I who uses it whenever I go there. rest of the time, the room stayed locked. I think that is a sheer waste.
In India also such theatres will end up costing between 1 to 2 crores. With such money, one can live comfortably for the rest of his life. Ultimately what is your priority is the deciding factor.
I am involved in 2 projects that involve HT rooms costing some 50 lakhs each. The equipment is just 20 lakhs. The rest go to room interiors. The ambience may be slightly different (more like an living room), but the screen effect and sound effect will be as good.
But we can still try and have a convincing setup like some of the guys have in this forum. Even i am planning a dedicated Cinema room in my home at Chennai. The thing is i have to construct a third floor and build this setup and i am afraid that my mom will not allow me to go for such a lavish setup where they wont agree to such needs. For them a TV is all that they need. But ya,things change so as our needs and desires and nowadays,desires are very well transforming into needs and one such need is this. To give an example,earlier i was looking into buying a decent lcd,min 32".then i shifted the focus on a 42" one and now i donno why i am constantly eying the projector. And god knows how i am gonna convince my mom of my upcoming dream project at my chennai home. I can convince my dad though