Movies

Exhibitors favour performance-linked revenue share model

MUMBAI: Close on the heels of the producers and distributors deciding not to screen films in multiplexes from 4 April, multiplex owners have stated that they are ready to agree upon a performance-based revenue sharing model.

The performance-linked model will be based on benchmarks such as box office collections of a film, budget of the film and star cast, multiplex exhibitors told reporters here today.


"If the movie is a super hit, we would share higher revenue. But if a movie like Chandni Chowk To China fails at the box office, then be ready to suffer the losses," said Fame India MD Shravan Shroff.


On an average, a multiplex earns 70-75 per cent from box office, 20 per cent from concessions, and 5-10 per cent from advertisements.


Multiplex exhibitors believe that unlike yesteryear, when rent to the theatre owner was fixed irrespective of collections, today there is a clear revenue sharing where theatre owners also bear part of the risk.


"Also, with the advent of computerised ticketing, the multiplex industry has offered a major impetus in actual revenue delivery to various stakeholders," elaborated Big Cinemas COO Tushar Dhingra.


The exhibitors point out that multiplex penetration in the smaller cities has brought patrons back to cinema and that all kinds of movies are being released which were not viable few years ago.






In 2005-06, 45 to 50 per cent of the box office was contributed by multiplexes while in 2007-08, the figure rose from 65 to 70 per cent and is likely to go up further in the coming years.


For 2005-06, distributors took 42 per cent of the box office returns. This has gone up to 43 per cent in 2007-08, the multiplex exhibitors clarified.


Meanwhile, when quizzed why multiplexes in India do not follow a revenue sharing model based on global standards, Dhingra noted that the hospitality services offered in India are quite different from international markets standards.


Also, there is a different tax structure overseas with US paying about 8.5 per cent tax and UK paying around 15-17 per cent.


Today there are approximately 225 multiplexes and 850 screens in India. The projected multiplex screen count will be 1500 screens by the end of 2010 and 2500 screens by the end of 2011, Dhingra said.

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