Standoff between film producers and multiplexes continues news
Mohini Bhatnagar
21 April 2009

Film producers and multiplex owners have been at loggerheads for the last one month over the percentage of profit to be shared from box office collections. Big ticket film producers want to share profits equally with multiplex owners while the latter want a higher portion of the earnings ranging from 55 to 62 per cent.

As of now both producers and multiplexes are suffering loss of revenue. Film industry sources say that when the ban lifts there will be bunching of films at the box office leading to lower collections while for the cinemas each day lost means irretrievable loss of revenue.

For producers the situation is not as bad since IPL season has begun and going by last years' experience all but one film (Jannat) released during IPL season flopped. Hence producers have adopted a hard stance knowing they have time on their hands.

Two big names of the Hindi film industry Shah Rukh Khan and Amir Khan jointly addressed the press and upped the ante against multiplex owners.

The two actors-cum-producers said that unless an understanding with multiplex chains was reached on ''equitable playing terms'', and until the chains rectify ''various irregularities'' they are involved in, the release of films would be voluntarily held back.

From 4 April onwards the country's major production houses have not released any new films at multiplex cinemas. Further they are promising to continue the strike until the theatres agree to split their takings 50:50.

On their part multiplex owners argue that a straight profit-sharing agreement makes sense only if a film is successful. They want a film's performance at the box office to determine the split.

The tussle, which can only be termed as a 'falling out' between India's major film studios and cinema chains since multiplexes started operations in the nineties, comes at a time when the economy has slowed down, people are losing jobs and fewer people want to pay the huge price that multiplexes charge for tickets.

According to trade analyst and editor of Film Information Komal Nahata, 'If the strike carries on the Hindi film industry might have to pay a huge price. He estimates that the Indian film industry would lose $1.5 million in weekly revenue.

For the past two years, India's major film studios had been lobbying with individual theatres to increase their takings. But early this year they came together to form an umbrella body the United Producers and Distributors Forum (UPDF) to demonstrate their solidarity.

Hindi films director Ramesh Sippy, who is a spokesman for the organisation, says the UPDF boycott was the only way to bring about results.

Some producers allege that the dispute isn't only about money. It's to do with the arbitrary and ad hoc practices followed by the management of multiplexes.

The UPDF says it is not only the cut that they are fighting against. It is the arbitrary and ad hoc bullying tactics employed by multiplexes that causes anguish to film producers especially those of small budget films. They say the most recent instance is that of the film Aa Dekhen Zara when multiplex cinemas struck in a retaliatory action against the planned boycott by film producers.

Multiplex refused at the last minute to screen the Bipasha Basu, Neil Nitin Mukesh starrer produced by Eros Entertainment. The film had been advertised to open at multiplexes across India on March 27.

Sources at Eros Entertainment say that the night before the release of the concerned film a representative of the cinemas threatened to cancel the screening of the film at multipexes unless Eros Entertainment pulled out of the planned boycott. When the company refused, the cinemas withdrew the film before the premiere. Eros is said to have spent $1m (Dh3.67 million) promoting Aa Dekhen Zara.

Eros then was forced to sell the film to single-screen cinemas, which charge lower prices for the tickets and as a result have lower profits than multiplexes. The film will now also be screened on satellite TV just two weeks after its release.

Ramesh Sippy says the multiplexes operate on unfair terms. He says that the national multiplex chains have formed a pattern of collectively not closing the terms until the last moment, by which time there is so much riding on a film that producers invariably succumb to the demands made by the cinemas. Producers also say that multiplexes pull down shows of less popular films without informing the makers, sometimes even before an entire week's run.

The fracas actually began with release of Yash Raj Films Fanaa two years ago. Just before the release of the film Yash-Raj distributors asked for a higher profit percentage from multiplex theaters which was refused.

Despite the current standoff, film producers are heavily dependent on multiplexes that have revolutionised the industry.

Ten to 15 years ago, most of the country's cinema halls had single screens. In the late '90s, slick new western-style cinemas with multiple screens, air conditioning, surround sound and snack bars started coming up in metros. Today there are more than 240 of them across the country. Even though movie tickets in multiplexes are priced four to five times higher than those of single screen theatres, they have proved to be a hit with young audiences who like the ambience and viewing experience that is on offer. In a way these multi screen theatres have resurrected the film industry and helped lure India's burgeoning middle class back to the cinema.

Multiplex owners say if a film is successful they do not mind parting with 50 per cent of the take but a dud at the box office turns into an expensive affair as the costs of operating a multiplex are high.

The managing director of the Fame Cinema chain, Shravan Shroff says, "We have computerised the entire ticketing system in India. We update regularly the ticket sale figures to producers via email.'' He adds that multiplexes have made this business very transparent, which was not the case earlier.

Shroff says if producers make good films the multiplexes will be ready to part with revenue on 50:50 basis.

Most multiplexes also continue to pay high rentals left over from agreements brokered during India's property boom.

According to the Cinematograph Owners Association, even before the economic recession, multiplexes were operating at a loss mainly because too many multiplexes have come up and supply is more than demand. Not only this, the cinemas are faced with competition from satellite television, DVDs and film piracy. In the first five years of their operations government subsidies helped the multiplexes through. Now most of the cinemas are coming to the end of the subsidy period.

While imbroglio continues, it's the bottomline the producers and multiplex owners are looking at. Most of the films released in the recent past have not been successful in drawing in the crowds. Barring films like Raaz, Dev D, Billu, Slumdog Millionaire, Luck by Chance, 13B and Delhi 6 that have seen a modicum of success all others including Gulaal, Videsh, Aa Dekhen Zara, Dhoondte Reh Jaoge and 'Jai Veeru) failed to make an impact, despite awards (Videsh). The bottom of heap includes films like Bad Luck Govind, (which collected a measly Rs 10,000 during its run) Karma aur Holi, Mere Kwhabon Mein Jo Aaye and 'Siddharth The Prisoner form the bottom of the heap.

For now multiplex operators are preparing to show Hollywood movies, IPL matches and host film festivals if the strike drags on.

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Standoff between film producers and multiplexes continues