War Of The Worlds: Producers V/S The Multiplex Owners
From April 4th, the producers have threatened to stop screening their movies in the multiplexes if the multiplex owners don’t agree to have a fixed revenue sharing model of 50:50 for all the movies irrespective of the quality or the banner.
The Producers’ Stand:
The way things work with the multiplexes is that all the movies are graded by multiplex into categories. Typically, a big budget movie is deemed as a CAT A movie (eg: Chandni Chowk to China, OSO, Jodha Akbar), a medium budget movie is deemed as CAT B (Billu Barber), small budget CAT C (eg: Dev.D, Raaz 2) and so on. Depending on the category that the movies fall into, the revenue to be shared is fixed. Typically for a CAT A movie, the producer get a greater pie than what a CAT C movie producer would get. So, in effect, even if a Raaz 2 or a Dev.D rakes in the moolah, the producer’s share is lesser than what a multiplex owner would get. It is this fact that has infuriated the producers. Their logic being that since the multiplex also earns through popcorns, samosas (F&B that are exorbitantly priced), it’s not fair that that the actual movie earnings is at a lower level to the makers of the movie. Hence they are demanding an equal share of the revenue. Also, according to the producers, the international practice is also of equal revenue sharing between the producers and exhibitors.
The Multiplex Owners’ Stand:
The Multiplex Owners (MO) justify the variable revenue model by citing the high infrastructure costs due to which the break-even period is pretty long. Therefore, they argue that it’s fair to apportion a greater share of the revenue.
Additionally, because of the multi screen concept, it has helped in carpet bombing during a new release. Carpet bombing basically means that when a big budget movie (like Singh Is King) releases, they release with over 800 prints simultaneously due to which they are able to attract the maximum eyeballs in the opening weekend which is usually unaffected by Word of Mouth (WOM). And by time a negative WOM is generated (if any) the distributors have already got their money and are busy counting the profits. This way even a strictly ok movie becomes a huge hit in spite of being panned critically. Secondly, due to the better sound systems, ambience, comfy seats and cleaner washrooms, they have brought the families back to theatres which are the main target audience of most of the blockbusters.
The Genesis of the WAR:
The war between multiplex owners and the producers first came to light when YRF successfully arm twisted the multiplex owners to get a higher revenue share for their blockbuster Fanah. But two years later, the multiplex owners had the last laugh when they refused to be arm twisted again and boycotted the much hyped multi-starrer Tashan. In my books, inspite of the low quality, Tashan would have been a huge hit if they had got a multiplex release. Worse movies like Singh Is King, Welcome and Race have become successful due to the carpet bombing techniques and strong promos.
Since then, in the last one year we have had multiple instances of the producers and arguing about the revenue model. The latest case being the one that UTV had with the MOs during the release of Dev.D and Delhi 6. At that time it was amicably resolved and both the movies got released in multiplexes.
In my opinion, if the stalemate does not get resolved by the 4th of this month, then the producers will also suffer along with the multiplex owners. As of now the producers are taking a tough stand as they are the content providers and they believe that if content is there then the audience will come even to single screens. Personally I beg to differ because no matter how good a movie is, I wouldn’t like to take my family to single screen theatres. Lousy seats and the quality of crowd that comes to such theaters (Thane area) compels me to sit at home rather than take my family out to such theaters.
Recently I happened to meet up with an executive with one of the production houses and I broached the topic of the impasse with him. He had an interesting take on the issue. He pointed out that the film industry can give even the politicians a run for their money as far as chameleon quality is concerned. Therefore according to him, the issue may just be resolved on its own with a lot of work being done behind the scenes!
Let’s wait and watch on how things unfold…I just hope that the movie loving audience won’t end up being losers as a result of this war.
Disclaimer: I am in no way connected to the film industry / exhibitors in any capacity. All the above views are just of a ticket paying cine goer and most of the views are picked up by media reports.
Tags: carpet bombing, Multiplex, Single Screen, Strike, UTV, YRF Films
Anurag Kashyap
Abhay Deol
Dibakar Banerjee
Hansal Mehta
Khalid Mohamed
Kundan Shah
Anish Kuruvilla
Jaideep Verma
Manish Gupta
Navdeep Singh
Bhavani Iyer
D. Santosh
Onir
Ashvin Kumar
Ramu Ramanathan
Sudhir Mishra
Pankaj Advani
Revathy
Saurabh Shukla
Shilpa Shukla
Sujoy Ghosh
Suparn Verma
Santosh Sivan
Shashank Ghosh
Shivajee
Pavan Kaul
Partho Sen-Gupta
Prroshant Naryannan
Sam Langoria
Satish Kasetty
@ Sudhir- as of now the strike is very much on.But dont worry with the elections & IPL on there is no biggie planned for release anyways in April except for 8*10 Tasveer which releases tom.
I’ve written about it myself-
http://passionforcinema.com/next-month-at-the-movies-money-saved-joy-lost/
U’ve missed out the technicalities like the multiplexes giving a revised proposal from their side for revenue sharing based on a film’s performance which got rejected by the producers.
My take on this is that the multiplexes should have a variable pricing scheme looking at the budget of the film.
For eg. it is ridiculous that I am paying Rs 200 for watching a CC2C and a Barah Aana when there is a 10 fold difference in the budgets of both the movies. Also this is the only way small and niche films like Baara Aana, Straight and the ilk can co-exist with your big budget potboilers
@Sandy
Yeah the variable pricing is the call of the hour…but nobody seems to take the call for it…the smaller budget movies will get a huge boost with variable pricing strategy.
@Sethu
Maybe thats why they have called for a strike in the first place…but typically in such dull periods (IPL times) u would have a lot of smaller movies releasing…instead of the joke that we had of 7 movies releasing in the last two weeks of March, it would have been much better if the smaller movies would have had evenly spaced out release in the month of April…
Variable pricing sounds like a good idea to me. Anybody with good ideas on how practical this could be?
Well, i think concept of viewing movies with family is long over.
I think multiplex were catering to a a family who not necessarily not want to see a same movie.
But the situation is they have not improved quality in other hand may be responsible for downfall of quality.Mat be producers are getting more experimental with directors and tryig to get movies made.But sad thing is that multilex show only big blockbuster at prime time, not small or experimental films.Other sad thing is sometimes multiplex reserve showtimes for b grade hollywood movies instead of promoting Hindi or any other regional movies.Multiplex screen selected South Indian Blockbusters.Even Marathi films which are screened at such odd times that it is impposible for an average cine goer to watvh the movie.
Other things is movies are consumed generally all over by youth between age of 18 to 25.
Frankly i think content should be the king and will be, we go to movie to get engrossed for 3 hours, not for popcorn and loo.I f you want ambeince go to Hotels.
Variable Pricing, i think right pricing of tickets are important.]
An Average Indian Middle Class of family of four cannot afford current multiplex ticket rates.
The running cost per seat in a multiplex is Rs. 13. Thats it. Those greedy multiplex owners should reduce the ticket rates pronto. Actually till recently it was the novelty aspect as well as the experience, because of which we thronged to a multiplex. But I have settled down to watching films on pirated DVDs. I wont pay 250 per ticket. If ticket prices are reduced below Rs. 100 level per ticket, then everyone will profit.
Nice stuff Sudhir..my guess is that its a major deadlock.Both parties need to rethink.
Both parties are at fault..i dont think consumer will be king this time.
I love my neighbourhood theatre: Movietime cinema, Evershine Nagar, Malad W. It has one big screen and one small screen. Seats are comfy. The sound seems okay to me – I’m no expert on sound design. More importantly, in the bigger screen, the sounds of people talking, which can be clearly heard in a multiplex like Cinemax or Fame, are drowned out
And the best part is tickets are 80 for evening shows and 50-60 for morning/noon shows.
@ Vinay
Yes, 100 bucks a ticket is a reasonable price.
Flexi pricing is definitely something that the multiplexes and some of the better single screen theatres must introduce.a lot of multiplexes even get tax exemption from the Govt- why the hell cant they pass atleast part of the benefit then to the consumers?Atleast in Mumbai/Pune you have cheaper tickets in the morning shows.But the same funda doesnt exist in a Chennai,B’lore,Hyd etc.Lots of things can be done which will ultimately benefit the multiplexes too by increasing the footfalls.
Agree with Vinay. Multiplex owners are fleecing everyone. They need not price tickets, parking, F&B so exhorbitantly. They are even exempt from entertainment tax. Do they want to get back all of their investment in just one year or so? That seems to be the plan. Ticket prices should be between Rs. 70-100.
@cinemausher
this comes from man who watches every movie in multiplex
Kenny, man! Thanks for reminding me about Movietime. From now on, I will check whats playing in Movietime. The issue is good screens have popped up near places where I stay and travelling in Mumbai has always been a drag. But yes, Movietime, Malad is not far… and pop tates is near by as well
Dhulia, I tried calculating. One screen typically consists of 650 seats (A-Z x 25). There are atleast 4 shows in a day. Assuming that the theatres are full only 3 days a week, thats 12 days a month, the multiplex owner earns a cool 1.5 crores a month. That translates to 15-18 crores a year. Two years and his investment is back.
@atheist,
I never knew Anand in thane,Joker in Kalyan and Tilak in Dombagoan are Multiplex.
@ Cinemausher-
Anand in Thane & Joker in Kalyan are single screen theatres but the best in that area.Similarly in case of Dombivli- Pooja,Tilak & Madhuban form 3 theatres in a cineplex and it used to be the best in Dombivli.None of these are multiplexes though.
@Sethu,
That is exactly the point i am making to the atheist who seems to be confused between multiplex and cineplex.
I would like to add for south indian movies i prefer Aurora.
So what happens in the multiplexes this Friday or Saturday?
Evelyn Tu :
As of now the boycott is still on…in fact according to this morning’s report, SRK & Aamir Khan are going to have a joint press conference to lend their support to the producers’ cause…
So let’s see who blinks first…me thinks that this time the multiplexes will have to agree to the producers’ terms…
@cinemausher
Oh that’s such a fantastically mind-blowing awesome observation. I am humbled and will be grateful to you forever for bringing this absolutely brilliant insight into my purview.
@Atheist,
Let us not make it personal,let us discuss cinema.
@cinemausher
Oh My! What wisdom
@Atheist,
Becuase i belive in magic of cinema,cinema for me is god.