India row on revenue sharing

Multiplexes, Hollywood can't agree on terms

Hollywood distributors and India’s multiplexes are in a standoff over revenue sharing, which is forcing films to release in single-screen cinemas.

Distribs and multiplexes used to take an equal share in the box office revenue in the first week of a film’s release under a two-year agreement signed in 2009. The distribs’ share falls to 42.5% in the second week, 37.5% in the third week and 32.5% in the fourth.

The agreement expired on June 30, and plex owners offered distributors 45% in the first week, 37.5% in the second, 32.5% in the third and 27.5% in the fourth.

This was unacceptable to Warner Bros. India, nearly scuppering the release of “Harry Potter and the Deathly Hallows: Part 2.” The film was eventually released after both sides agreed to postpone the discussion on revenue sharing.

Last week, Fox Star Studios India failed to reach a revenue agreement on “Rise of the Planet of the Apes,” forcing the film to release in 400 single-screen cinemas.

Fox said in a statement: “Despite our best efforts, we were unable to come to an appropriate commercial arrangement with our exhibition partners as we were offered terms that were not consistent with other recent Fox films of a similar scale.”

Pic grossed a respectable $1.3 million in its opening weekend, but the returns would have been higher had it been released in plexes, which are typically far plusher, boast superior projection and charge higher ticket prices than single screens. Affluent Indians, who are willing to pay higher rates for better facilities, usually shun single-screen theaters.

Though both distribs and plex operators are negotiating, neither side is willing to budge from its position. Distribs want to continue the 2009 agreement while plexes are adamant on the new terms.

Today “Captain America: The First Avenger,” distributed by Viacom 18 Motion Pictures, Warner’s “Final Destination 5” and Disney’s “Winnie the Pooh” open in India.