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Another look at Fair Rights for Friday Nights

The last week has seen an interesting feud in the Hindi film industry with producers and distributors joining hands against multiplexes over the issue of revenue sharing. Industry heavyweights like Shah Rukh Khan, Aamir Khan (actors who have turned producers since a few years), Karan Johar, Yash Chopra and a host of others held a press conference to ‘explain to the audience why they will not be seeing any new releases in the theatres for a while.’
The issue at hand is that the current paradigm of revenue sharing between producers and exhibitors (theatre owners) is roughly 40:60 in the favour of the exhibitors. The demand of the producers is that it made into an equal 50:50 share.
Chairman of the United Forum for Bollywood Producers and Distributors, Mukesh Bhatt had earlier made a statement saying, “Our demands are just, we want equal shares in profit sharing which is the norm all over the world. The situation is not in our hands and we will proceed with the strike as planned.”

As far as the question of the norm across the world is concerned, it seems the producers’ association has erred a bit.

The paradigm in the United States of America is dependent strictly on performance. A website called realbollywood.com managed to get the exact wording of the policy statement followed in the US. Here is an extract:

Form 10K of the Securities and Exchange Commission of the USA. Form 10K is the annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934. The Securities and Exchange Commission (SEC) is the US equivalent of the SEBI in India.
Form 10K of Cinemark Cinemas states –
Film rental costs are accrued based on the applicable box-office receipts and either the mutually agreed upon firm terms or sliding scale formula, which are established prior to the opening of the film, or estimates of the final mutually agreed upon settlement, which occurs at the conclusion of the film run, subject to the film licensing arrangement. Under a firm terms formula, the Company pays the distributor a mutually agreed upon specified percentage of box-office receipts, which reflects either a mutually agreed upon aggregate rate for the life of the film or rates that decline over the term of the run. Under the sliding scale formula, film rental is paid as a percentage of box-office revenues using a pre-determined matrix based upon box-office performance of the film. The settlement process allows for negotiation of film rental fees upon the conclusion of the film run based upon how the film performs. Estimates are based on the expected success of a film over the length of its run in theaters. The success of a film can typically be determined a few weeks after a film is released when initial box-office performance of the film is known. …. The final film settlement amount is negotiated at the conclusion of the film’s run based upon how a film actually performs.

While names of some films of the Yash Chopra and Sajid Nadiawala are being pitched as projects that will be hurt by this strike, multiplex owners are of the opinion that the timing of the strike has been deliberately chosen so as to not hurt any big banners or stars.

Shravan Shroff, Managing Director of Fame Cinemas says, “Was there an Aamir Khan or a Shah Rukh Khan film releasing, which has been stalled? The fact is that all this is just hot air — a big deal being made out of this strike when the fact is that there were no big releases scheduled during this time, especially with the IPL around the corner.”

Multiplex owners continue to stress on the performance driven paradigm and have in turn asked producers to make better films!

What interests me more is the statement made by Shah Rukh Khan when he delivered the keynote address at the aforementioned press conference. He said, “This will help all the small producers. It is not a power show, we are all partners, it is actually a show of togetherness.”

While ‘small producers’, whoever they are, may be helped in the long run, as of now, small films (which is what I think the Khans meant by ‘small producers’) have the field to themselves like never before. Since the big banners have decided not to release any new films till an agreement has been reached, films that would ordinarily be completely ignored are ruling the roost at the multiplexes, where people are, as is the norm, still going.

This week, films like Tarique Khan’s Ek Se Bure Do, starring Arshad Warsi and Rajpal Yadav, V.K Kumar’s Pal Pal Dil Ke Saath, starring former cricketer Ajay Jadeja and an unknown actress called Rimpy Gill, Gurbir Singh Grewal’s Coffee House, starring Ashutosh Rana and TV actress Sakshi Tanwar, and Ravi K. Patwa’s Royal Utsav, starring Vikram Kumar and Monalisa.

The official websites of most of these films aren’t even fully functional, mainstream film websites like Bollywood Hungama don’t have all details, and yet these films have released, giving credence to the speculation that they may have jumped at the opportunity of not having to compete and naturally lose out to any big banner, big star film.

Websites reffered to:

Bollywood producers on strike

Aamir, SRK back together


Bollywood releases in limbo as producers go on strike


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