For nearly two months, Bollywood fans were left without a Shah Rukh Khan, Amitabh Bachchan or Aamir Khan film on the bigscreen, as a dispute between distribs and multiplex owners turned off the spigot of new releases. Sure, there were a few smaller movies here and there, but for the first time producers and distribs banded together and stood firm for better terms than they had been getting from ‘plex owners.
The stoppage spurred discussion between the two sides on how to grow box office for Hindi films, says Ronnie Screwvala, topper of UTV Motion Pictures. “It was a good hiatus.”
The Hindi film biz has been inching toward the Hollywood model. About five years ago. the government listed it as an industry, which allowed banks and other financial institutions to invest in Bollywood. This was a departure from the past when producers often turned to rather shady sources and led to the Mumbai mafia running roughshod over filmmakers.
The next step was to formalize box office agreements between exhibs and distribs.
Although most reports about the standoff centered on the revenue split between distribs and exhibs (distribs and producers wanted a 50-50 revenue share, plexes sought a sliding scale), Screwvala says the discussion was also about P&A. Plexes prefer a wide release to recoup all their costs in opening weekend, but some producers want to open small and build on a platform release. After all not, all films merited going wide on opening day.
“The key solution was to leave distribution strategy with the producers,” Screwvala says.
The June 4 agreement centers on a sliding scale with a 50-50 split of the B.O. in the first week, 42.5% to distribs the second and 37.5% the third week, along with a 2.5% increase beyond that giving producers a net 5% increase on hits.
Amit Khanna, chairman of Reliance Big Pictures, which also owns plexes, says the strike has hit Bollywood badly causing a loss of between rupees 300,000 and rupees 400,000.
“Opportunities lost with no films released for several weeks,” he says. But he agrees with Screwvala that some good came out of it.
“For almost 50 years, till the end of the last century film distribution, production was all done by small groups of people working independently and there was no organization of the business,” Khanna says. “The basic framework was antiquated, no ground rules.”
Screwvala says the next step is for the two sides to grow box office in India — and he’s dreaming big, aiming for $100 million takes in a country where the top box office was $38 million last year for “Ghajini.” He’s undeterred by that fact that it’s rarely been done in Asia.
He’s got a supporter in Khanna who points to the fact that India with 4 million admissions a year is underserved as far as theaters are concerned. Although the recent downturn has slowed plex building, “there is scope for improvement,” he says.
Producers and exhibs have been talking to the federal government about centralizing the entertainment tax, which can be as high as 30% in some states. Combining it with a federal tax, called goods services tax, of about 5% would leave filmmakers with a lot more dough, but observers doubt states would go for it, as they’d lose revenue.
Meanwhile, Bollywood is ready for new films to hit the theaters after a first half that yielded mostly disappointments, and possibly led to the standoff between distribs and exhibs.
UTV is ready to unspool Vishal Bharadwaj’s “Kaminey,” “Main aur Mrs. Khanna,” toplined by Salman Khan, Irrfan Khan starrer “Pan Singh Tomar” as well as Ashutosh Gowarikar-helmed “What’s Your raashi.”
Bollywood behemoth Yash Raj Films is ready with John Abraham starrer “New York,” which opens June 26; Big Pictures released “Kal kisne dekha”; and Eros Intl. rolls out “Kambakkth ishq,” in which Sylvester Stallone and Denise Richards have cameos.