Multiplexes, film producers talk to solve revenue issues

Mumbai, Jan 21 | Updated: Jan 22 2007, 06:15am hrs
Hindi film producers and multiplex owners are holding talks to reach a consensus on the vexed issue of revenue-sharing for big banner films. In 2006, while Hindi movies made huge profits, top producers also demanded a larger share from mutliplex owners for screening their films. The amount paid by multiplex owners to producers varies from movie to movie, with some big banner producers demanding as much as 50% of box office collection for their film in the first week.

Yashraj productions started the trend by demanding a higher than usual share for their film Fanaa (50%) and other big banner brigade of Bollywood soon followed including Vidhu Vinod Chopra for Lage Raho Munnabhai. While the normal rates charged by top producers from multiplexes for the first, second and third week are 48%, 38% and 30% respectively, the rates were higher at 50%, 45% and 40% for Fanaa.

Producers of Hindi movies are silent on the issue. Its not right to talk now since diccussions are on, said a spokesperson for film producer Vidhu Vinod Chopra. Deepak Ashar, chairperson of the multiplex owners association, says, Everybody has to sell their product at the right price like in a bidding. However, like any normal business transaction, parties on both sides need to reach a consensus.

Even as every big movie is asking for a bigger share than ever, analysts feels that there cannot be a standardised system for deciding the share. If there is a uniform system, then it won't be capitalist business any longer, says a media analyst. However, Atul Goel, CEO, Fun Republic, says, This will soon reach an equilibrium. There will be standardisation in the entire process in a couple of months. Rasesh B Kanakia, chairman and managing director,

Cinemax feels, Producers and exhibitors have to sit together and talk. There is no other way out.

Media analysts, however, feel that producers are justified in their demand, at a time when Bollywood movies are growing at an exponential rate. Multiplexes get enormous tax benefits and if a film does well, there is profit for both producers and exhibitors, says an analyst. The privilege of bargaining for the share is limited only to a few big banners.

Multiplexes also cater to small movies, which make good profit with small budgets, along with big banner movies. So they have to pamper the big banners if they want to show their movies, or else they should not showcase them at all," opines another analyst.