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Bollywood-multiplex stand-off may end before June 12

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Ashish Sinha New Delhi

Millions of fans of Hindi movies will soon be able to watch their favourite Bollywood films in multiplexes, with highly-placed sources in the film production and exhibition business saying a resolution is expected before June 12 to the two-month dispute over revenue-sharing between producers, distributors and multiplex owners.

“Big Cinemas and a few other multiplex chains have reacted positively to a number of our demands. They are keen to release the new Bollywood films across India. An announcement is expected in a day or two,” said a source representing the Bollywood producers and distributors forum.

Senior executives of the United Producers and Distributors Forum, the Bollywood producers’ lobby, confirmed that the multiplexes had agreed to most of their demands, including a revenue-sharing formula for impending Bollywood and Hollywood films and agreements on who gets the right to control the distribution of films including their locations.

 

An early resolution to the dispute has also gained momentum because the first major Hindi release, Kal Kissne Dekha, co-produced by a leading Bollywood film producer Vashu Bhagnani and Anil Ambani-promoted Reliance Big Pictures, is set to be released on June 12, after being postponed twice in the recent past.

“If Big Cinema takes a lead in resolving the matter, it will put pressure on the other national-level multiplex chains like PVR Cinems, Inox Leisure, Fun Cinema and Cinemax that have stood united in their negotiations with the Bollywood producers,” the source said.

Asked about the development, Amit Khanna, chairman, Reliance Big Entertainment that runs Big Cinemas and Big Pictures among other film-related businesses, said: “We are all working towards an early resolution and I am hopeful that we will be able to resolve the matter very soon.” Khanna, however, said no solution had been reached yet.

According to sources in the film exhibition business, the multiplexes have agreed on sharing revenue of all movie ticket sales for the first week on a 50:50 ratio, 42.5:57.5 in the second week, 37.5:62.5 in the third week and 30:70 in the fourth week, with the higher percentage going to the multiplexes.

The earlier revenue-sharing agreement was also skewed in favour of multiplexes, with the first-week ratio at 52:48, gradually rising to 70:30 by the fifth week.

On the issue of who gets a final say in the distribution of a new film, the matter will be decided on a case-to-case basis and in consultation with the multiplexes, sources said.

As a result, as many as 35 new Hindi films entailing investments of over Rs 200 crore of investments will now be able to hit screens soon. These include Yashraj Film’s New York starring Katrina Kaif and John Abraham, Kaminay (Shahid Kapoor, Priyanka Chopra), Kambakht Ishq, Life Partner and Sikander, among others.

No new Hindi film has been released in the multiplexes since April 4, causing film exhibitors and distributors a loss of Rs 350 crore. As a result, almost half of the 900-multiplex screens across the country have been closed by the multiplex chains in order to control their costs. Bollywood producers also incurred losses running into hundred of crores.

At a centre of the dispute is the Rs 3,500 crore annual box-office market for Bollywood films from multiplexes. There are about 900 multiplex screens in the country and Bollywood films generate 60 to 65 per cent of their revenue from these multiplexes, industry sources say. (There are over 8,500 single-screen theatres but they generate only about 35 per cent of the overall annual box-office collections for films released in the country.)

Both sides have been at loggerhead for the past two months over who gets a bigger pie in the revenue generated at the box office. Before the tussle, the multiplexes commanded the bigger share in the box office revenues. They also had the final say on how many movie prints were required a Hindi film was released.

Apart from this, there were issues over delayed payments or minimum guarantee by both parties and financial matters pertaining to entertainment tax adjustments in the revenue sharing formula.

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First Published: Jun 01 2009 | 12:42 AM IST

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