TRADE TALK – Film Industry’s Reality Show

In all my years in the film industry, I’ve seen a lot changing. The way the films are made, how they are released, the attitudes of stars and technicians, everything but everything has undergone a metamorphosis. While some things have changed for the better, there are other spaces in which the industry finds itself worse off than what it was before the change occurred.
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SAY “HAPPY DIWALI” WITH…

Gone are the days when the only Diwali gift sent out by film people used to be the simple mithai box. Today, just as in films, there’s a lot of innovation in Diwali gifts too.
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‘My Name Is Khan’ For Rs. 80 Crore!! Don’t Be Foxed – It’s Actually A Steal!

Fox Star Studios has acquired the worldwide rights (excluding audio rights) of Karan Johar’s My Name Is Khan for a reported price of Rs. 80 crore. Along­with the announcement of the deal this week came another ann­ouncement – that the film is being made by Karan and Shah Rukh Khan in partnership.

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TRADE TALK – Three Flops Cost Industry Rs. 80 Crore

It’s a figure that can blow your mind out. The film industry has lost Rs. 75-80 crore in the last three weeks alone! Eros, which holds the worldwide rights of Kamba­kkht Ishq, would end up losing around Rs. 25 crore of its investment in the film.

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TRADE TALK – What If…?

Now that new films are being released, both, in multiplexes and in single-screen cinemas, it is hoped that the audience will return to the theatres.

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Trade Talk – Film Promotion: Thinking Small (Screen) Is Costing Producers Big!

Now that the row between multiplexes and produ­cers/ distributors has been resolved, producers need to seriously dwell upon the point of expenditure incurred on promotion, both pre- and post-release.

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TRADE TALK – Confusion And More Confusion

Although it is only the Big chain of multiplexes which has so far agreed to bury the hatchet and shake hands with the producers/distributors, the impression being given to not just people in the trade but also the media is that the stalemate is over.

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Cracks In Producers’ Unity Show Split Clear As One Group Asks For Performance-Based Revenue Sharing MULTIPLEX OWNERS IN SHOCK Impasse Continues

It was the greatest shock for the owners of the seven multiplex chains in 40 days when producers did a complete U-turn at their joint meeting at Hotel Grand Hyatt on 14th May and asked for performance-based revenue sharing instead of the fixed percentage sharing as they had been demanding ever since the dispute with multiplexes arose. The multiplex owners describ­ed this shock as bigger than the one they got when producers and distributors had announ­ced a suspension of all new film releases from 4th April. Said a multiplex owner on condition of anonymity, “We all knew, the suspension was coming because that’s what they (producers and distributors) had announced in the eventuality that a settlement over the disputed issues did not come about. But the U-turn of 14th May came as a bolt from the blue.” It may be mentioned here that the demand for performance-based reven­ue sharing was not direct. Read more

Why Leave It Hanging?

Both, multiplexes and producers/distributors should not have let the renewed negotiations between themselves fail. It was in the interest of everyone that the differences should’ve been buried, matters resolved and business as usual started.

Frankly, there shouldn’t have been a suspension of re­leases in the first place because this has caused heartburn, losses and pain on both the sides. A better option would’ve been to keep the disputed amount of net collections or a token amount in the case of each film separately in an escrow acc­ount, to be distributed after a solution to the ongoing problem of revenue-sharing was arri­ved at. That way, there would not have been a break in business and the problem would’ve still begged a solution.

Anyway, even after new relea­ses were suspended, the second round of negotiations, which started last week (on 29th April) after a gap of 25 days, should not have been allowed to end without an amicable settlement. The multiplex owners agreeing to not henceforth force producers and distributors to release their films in those of their cinemas which are considered inappropriate or weak by the latter is a very big thing. This, coupled with the multiplex owners agreeing to settle acc­ounts much faster in the future, is a victory point for producers and distributors. FSJ has always maintained that although the differences between multiplexes and producers/distributors were over various points, the battle was somehow projected (by the producers/ distributors and the media) as one primarily of revenue-sharing. Probab­ly, it is because of this incorrect projection of the problem that producers and distributors are not able to accept the sharing formula put forth by multiplexes. For, the issue of revenue sharing has become the focal point of the war when, in fact, the other issues between the two sides are equally, if not more, important. The fact is that it is not just a disagreement over sharing box-office collections. In fact, in financial terms, the freedom to restrict a film’s release to the cinemas which a producer/distributor desires rather than being forced to release it in the cinemas which the multiplexes want to feed, and also quicker settlement of accounts by the multiplex chains (both of which have been agreed to by the multiplex owners) would translate into more monetary gains than if the multiplexes agreed to shell out the now-disputed additional 5% of net collections in weeks 2, 3 and 4 of a film’s release.

Rather than making it an ego issue, both the sides need to sink their differences and shake hands and re­start business together. In pure monetary terms, it is the producers of the top 10 films in a year who may stand to lose amounts which could matter, if the multiplexes have their way and part with 5% less in favour of producers/distributors in the second, third and fourth weeks. For, 15-20% of the films relea­sed every year would not even see a second week in the multiplexes. Of the balance, another 30-40% would go out of breath after two weeks and yet another 30-35%, after three weeks. So the real ‘loss’ would be felt by producers of the top 10 films or so, which would have at least a 4-week run in the multiplexes. The other 150-odd films each year would ‘lose’ barely Rs. 2 to 10 lakh per film. Is this sacrifice of stalling releases for such small gains justified? Assuming that it is, is this a fight for the big films or the small films? The answer is obvious!

In fact, if the producers and distributors were really fighting for small producers, as they claim they are, they should have insisted on getting multiplexes to commit a certain number of good shows in their properties to small films, at least in the first week. As things go now, small films are invariably given the worst shows of the day by multiplexes. But, unfortunately, in all their meetings with multiplex owners, representatives of producers have been openly telling the former to use their discretion and not release small films in their properties if they feel that 50%, 45%, 35% and 30% of net revenue (as demanded by producers) in the first four weeks is too much to part with in the case of small films.

There’s another aspect to this battle waged by produ­cers against the multiplexes. Rather than fighting the multiplexes, if producers had shown their exemplary unity to force stars and leading technicians to reduce their prices, the results would’ve been far more beneficial in terms of controlling costs. And costs controlled would automatically translate into better margin of profits or reduced losses – which is what this battle between multiplexes and producers/distributors is all about.

With negotiations having ended on a sour note for the second time, it is once again a game of wait and watch. Pro­ducers and distributors are waiting for the multiplexes to blink first whereas the owners of the seven multiplex chains are hoping that some producer will revolt and release his film in their cinemas. For, while the move to let new films release in single-screen cinemas and independent multiplexes might work in some of the circuits, one wonders whether any producer with even a fair-budgeted film would risk releasing it without the option of screening it in the seven multiplex chains, in at least three circuits viz. Bombay, West Bengal and Mysore. The seven national multiplex chains have a huge presence in the aforementioned three circuits and their contribution to the distributor’s shares is not of the kind which can be ignored. Given this fact, one wonders whether the re­solve of producers to permit fresh film releases in single-screen cinemas and independent multiplexes is actually a step in the right direction.

Issue dated May 10-16, 2009

Fresh Film Releases Permitted In Single-Screen Cinemas & Independent Multiplexes As Talks Fail Yet Again

Just as it seemed that a solution to the ongoing dispute between multiplexes and producers/distributors was around the corner came the news that the talks between the disputing parties had failed. The negotiations between producers/distributors and the seven multiplex chains, which are engag­ed in a battle of sorts over revenue-sharing and other problems, hit a roadblock on 5th May when the multiplexes pleaded inability to up the percentage of revenue they would be willing to part with in fav­our of the producers/distributors. Read more

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