Ever been invited to a trial show of a film at least two weeks prior to its release? Never, right? Because they don’t do ‘em any more. Veteran businessman, Balkrishna Shroff, director, Shringar Cinemas, says that producers stopped holding trial shows for their distributors at least 20 years ago. Business models had changed, investments and risks were higher and showing trials could lead to bad word of mouth and minimum guarantees stood the chance of being affected.
This meant, till all the deliveries were through, no big or small producer would show his product, which usually happened just about two days before a film’s release.
Vidhu Vinod Chopra just broke that trend. He was so confident about his product, Lage Raho Munnabhai (LRM) that he did something unheard of. In an industry which shies away from showing a film, prior to release to their distributors, Chopra called even his exhibitors to see the film, 10 days prior to its release. So confident was he of the film.
“This is why Vidhu felt he was justified in asking the multiplexes for a higher percentage share for the film. He was willing to run the huge risk,” explains Shroff, who is also the distributor for the Mumbai territory (which includes Mumbai, Gujarat, Saurashtra, parts of Maharashtra, Goa and North Karnataka).
For the last two weeks, since the countdown to Raju Hirani and Vidhu Vinod Chopra’s LRM had begun, there was trouble brewing in the multiplex industry. The Fanaa story was being repeated. This time it was Vidhu Vinod Chopra who wanted a larger pound of flesh, one he felt he deserved for the money and effort he had put into the film.
With multiplexes hiking up rates for big films and charging anywhere up to Rs 200-250 and some enjoying the benefits of the tax sops given to the exhibition industry, Chopra felt it was only right that he got a higher percentage of the revenue-sharing.
In nail-biting thriller style, the breakthrough came through only post mid-night, a day before the release. The only multiplex player which had agreed to Chopra’s terms was Shringar’s Fame, who are also their distributors for Bombay territory and the only one who did not bend was Ajay Bijli’s PVR with its screens.
For the rest, business sense prevailed and a respectable deal was arrived at. As we were going to press, PVR too (they did not show LRM on Friday across their screens), were sitting and negotiating. The loss, on both sides did after all run into crores, with the opening week loss being the crucial loss.
Differing tax structures meant the deal percentage varied territory to territory, yet, according to a financial industry analyst, Chopra got a 60% deal for the first week, 55% for the second and 50% for the third. Even Fanaa, according to sources, struck a deal at 55% for the first week. In fact, in Hollywood, big films strike deals for as much as 80-90% revenue sharing for the opening week, says an industry analyst.
Chopra has been vindicated, as the movie did open across single theatres (some of who in anticipation of no threat from their glitzy cousins, also hiked their ticket prices) and multiplexes, a fact which Shroff says is a good omen for the film industry. Yet, going forward, where does this leave the exhibition industry?
The multiplexes contribute huge moolah to the coffers. They have altered release patterns and big draw films can run up to as many as 9-10 shows a day at a single multiplex, which leads to huge weekend collections, in turn leading to a faster RoI.
A Yes Bank report last year states that though multiplexes constitute only 0.6% of the approximately 12,000 cinema halls in India, 28% to 34% of the box office collections for the top 50 films in 2004 came from multiplexes.
So, what is the story that will unfold for pre-Diwali and Eid releases of big films like Don, Dhoom2 etc? “The dynamics for our industry are totally different. We need varied and more content, like a film feels it is a strong product, at Inox all our properties are A list and so we can command a premium as we assure a certain business, which is why we get a better deal,” says Neeraj Goswami, head programming, Inox.
Financial analyst and CA, Sanjay Bhandari though says percentage of revenue sharing will get increasingly favourable for the producer looking at it from a pure business perspective. “Take the last few films and see the occupancy of the halls. Multiplexes are capital asset businesses and they need good stock,” says Bhandari who is sure a revenue-sharing structure will be worked out based on occupancy ratios. Shroff says he will see no other deal like this, until there is another Vidhu Vinod. Lage Raho Chopra!
Source : ET
This meant, till all the deliveries were through, no big or small producer would show his product, which usually happened just about two days before a film’s release.
Vidhu Vinod Chopra just broke that trend. He was so confident about his product, Lage Raho Munnabhai (LRM) that he did something unheard of. In an industry which shies away from showing a film, prior to release to their distributors, Chopra called even his exhibitors to see the film, 10 days prior to its release. So confident was he of the film.
“This is why Vidhu felt he was justified in asking the multiplexes for a higher percentage share for the film. He was willing to run the huge risk,” explains Shroff, who is also the distributor for the Mumbai territory (which includes Mumbai, Gujarat, Saurashtra, parts of Maharashtra, Goa and North Karnataka).
For the last two weeks, since the countdown to Raju Hirani and Vidhu Vinod Chopra’s LRM had begun, there was trouble brewing in the multiplex industry. The Fanaa story was being repeated. This time it was Vidhu Vinod Chopra who wanted a larger pound of flesh, one he felt he deserved for the money and effort he had put into the film.
With multiplexes hiking up rates for big films and charging anywhere up to Rs 200-250 and some enjoying the benefits of the tax sops given to the exhibition industry, Chopra felt it was only right that he got a higher percentage of the revenue-sharing.
In nail-biting thriller style, the breakthrough came through only post mid-night, a day before the release. The only multiplex player which had agreed to Chopra’s terms was Shringar’s Fame, who are also their distributors for Bombay territory and the only one who did not bend was Ajay Bijli’s PVR with its screens.
For the rest, business sense prevailed and a respectable deal was arrived at. As we were going to press, PVR too (they did not show LRM on Friday across their screens), were sitting and negotiating. The loss, on both sides did after all run into crores, with the opening week loss being the crucial loss.
Differing tax structures meant the deal percentage varied territory to territory, yet, according to a financial industry analyst, Chopra got a 60% deal for the first week, 55% for the second and 50% for the third. Even Fanaa, according to sources, struck a deal at 55% for the first week. In fact, in Hollywood, big films strike deals for as much as 80-90% revenue sharing for the opening week, says an industry analyst.
Chopra has been vindicated, as the movie did open across single theatres (some of who in anticipation of no threat from their glitzy cousins, also hiked their ticket prices) and multiplexes, a fact which Shroff says is a good omen for the film industry. Yet, going forward, where does this leave the exhibition industry?
The multiplexes contribute huge moolah to the coffers. They have altered release patterns and big draw films can run up to as many as 9-10 shows a day at a single multiplex, which leads to huge weekend collections, in turn leading to a faster RoI.
A Yes Bank report last year states that though multiplexes constitute only 0.6% of the approximately 12,000 cinema halls in India, 28% to 34% of the box office collections for the top 50 films in 2004 came from multiplexes.
So, what is the story that will unfold for pre-Diwali and Eid releases of big films like Don, Dhoom2 etc? “The dynamics for our industry are totally different. We need varied and more content, like a film feels it is a strong product, at Inox all our properties are A list and so we can command a premium as we assure a certain business, which is why we get a better deal,” says Neeraj Goswami, head programming, Inox.
Financial analyst and CA, Sanjay Bhandari though says percentage of revenue sharing will get increasingly favourable for the producer looking at it from a pure business perspective. “Take the last few films and see the occupancy of the halls. Multiplexes are capital asset businesses and they need good stock,” says Bhandari who is sure a revenue-sharing structure will be worked out based on occupancy ratios. Shroff says he will see no other deal like this, until there is another Vidhu Vinod. Lage Raho Chopra!
Source : ET
