After completely denying to share 50 percent revenue with distributors, exhibitors said that the revenue share of each movie should be performance linked, the benchmarks of which should be decided on the basis of box office collection of a film, budgets, star cast etc. Not only will movies be performance linked, the cinema properties too will fall under this purview then.
Present at the conference were Tushar Dhingra and Rajendra Singh from Big Cinemas, Shravan Shroff and Aditya Shroff from Fame Cinemas, Alok Tandon and Utpal Acharya from Inox Leisure, Sanjay Dalmia and Devang Sampat from Cinemax, Vishal Kapur and Bhumika Tewari from Fun Cinemas and Hamid Shaikh from Movietime Cineplex.
In 2005 – 06, 45-50 per cent of the box office was contributed by multiplexes whereas in the year 2007 – 08, this figure rose to 65 – 70 percent and is likely to go up further in the coming years. For 2005 – 06 distributor share on Rs 100 at the box office was Rs 42 and in 2007 – 08 it has become Rs 43, thus increasing the distributor share.
Commenting on the varied revenue share terms for different territories in India vis-a-vis standard terms in the UK and the US, Dhingra said, “In India, the taxes multiplexes pay is varied for different states, the realty estate prices are far skewed in India, the hospitality in our multiplexes are higher, in India the business is at a growing stage as opposed to the UK and the US so it cannot be compared to India.”
In response to producers’ allegation about exhibitors charging 33 per cent tax in Punjab despite exemption from the state government, Dhingra said, “Most of the exhibition companies are listed on the bourses and we do not do such things in the business.”
In response to the producers’ statement regarding zero risk taken by exhibitors, exhibitors said that back then the rent to theater owner was fixed irrespective of collections and whether the movie was a hit or a flop. Therefore, the risk lay completely with the producer. Now, there is a clear revenue sharing where theater owners also bear part of the risk.
Fame India managing director Shravan Shroff added, "If a movie does better than expected at the box office then we are ready to share the surplus with producers and distributors. However, if a movie fails at the box office, the losses will be have to borne."
The net contribution towards box office collection of movies has gone up year-on-year due to the multiplexes and the distributors share has gone up in various metros and mini metros.
