Multiplex operators refuse 50-50 revenue split

As Bollywood moves to copy Western biz practices, producers are trying to get a larger slice of the box office pie from exhibs. Producers in India started playing hardball April 3, withholding new releases when multiplex operators refused to agree to a 50-50 revenue split.

“The producers and distributors in the Indian film industry have taken a voluntary decision not to release movies in multiplexes indefinitely, until we reach a revenue-sharing arrangement that is acceptable and fair,” says UTV Motion Pictures topper Siddharth Roy Kapur.

Ken Naz, prexy of North American operations for Eros Intl., the 800-pound gorilla in Bollywood distribution globally, says international releases will be affected as most pics unspool day-and-date.

Enthusiastic Indian filmgoers, who would normally be starved of new movies, aren’t feeling the pinch yet. April 3’s lone release “8×10 Tasveer” received a cool welcome at the box office. And with year-end exams about to get under way, general elections and Indian Premier League cricket beginning April 18, there’s plenty of diversion for auds.

As Shravan Shroff, managing director of Fame Cinemas, told Reuters, “A big deal is being made out of this strike when the fact is that there were no big releases scheduled during this time.”

Plex owners also say there have been few hits in 2009.

“It hasn’t been a very good year,” Naz admits.

Until a decade ago, Naz says, producers and distributors got as much as 80% of the revenue split besides making a cut from concession stands, but that changed a few years ago, when the exhibs bargained for and got 60% of the earnings.

“The multiplex owners are together and, unfortunately, producers and distributors were apart, and multiplex owners, in my eyes, were taking advantage,” he says.

With no resolution in sight yet, Hollywood stands to gain if Indian producers withhold movies.

“Given the embargo by producers on releasing films, it will be key to have an alternate programming strategy. Indian Premier League clearly takes the lead in filling the slots, besides short film festivals and foreign-language film screenings,” Anand Vishal, VP of marketing at Fun Cinemas told website Cricket360.

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