MUMBAI: Catch 22! That’s what the present situation between the multiplexes and producers – distributors can be best termed as.

While producers are gallantly saying they would not release movies in multiplexes and go ahead with only single screens if need be, the fact of the matter is that returns would not be substantial or even justified when pitted against the investment that goes into their movies.

On the other hand, the bulk of multiplexes’ revenue comes from mainstream Bollywood movies. If there’s no show of these movies, the footfalls would drop drastically as any other film contributes minimally to the total multiplex collections.

Businessofcinema.com takes stock of the situation and puts forth some points…

Firstly, why doesn’t a content creator of any kind of movie deserve to get minimum 50 percent share for his movie in the first week of release in cinemas, be it Rab Ne Bana Di Jodi or Billu? Any movie in the category of big, medium or small deserves an equal share at least at the time of its release. Thereafter, depending on the fate of the film, the revenue share can be subsequently decided in the forthcoming weeks.

For instance, Chandni Chowk To China wasn’t the best Akshay Kumar movie to release in a really long time. However, it’s opening weekend gross collection of Rs 330 million (Rs 33 crores) in India wasn’t bad either. The movie dropped on the following Monday and met with a worse fate the week thereafter. In a scenario like this, why should the producers and distributors be denied at least their 50 per cent share in the opening week?

Similarly, for films like Jaane Tu… Ya Jaane Na, A Wednesday and Slumdog Millionaire, which picked up gradually by word of mouth and have had a long innings at the box office, rightfully deserve an equal if not more share in the subsequent weeks. For movies, which fall in the smaller category the terms can be decided accordingly.

Depending on the movie’s performance in the first week, the revenue share for the weeks thereafter can be revised depending on the collections, footfalls, occupancy or any such yardstick, which the distributors and exhibitors should mutually agree upon. But getting into the nitty-gritty of each movie’s performance at every cinema will only complicate matters further. It needs to be dealt with a more holistic approach.

If according to an exhibitor, a distributor’s slate of films has some impressive and some dud films, then according to a distributor, an exhibitor’s properties are also benchmarked thus. Therefore, the right to segregate in order to streamline must duly lie with either parties or no one at all.

In India, does a distributor have an opportunity / incentive to give his movie a platform release like 20th Century Fox released Slumdog Millionaire in North America starting with 10 screens in the first week and increasing them thereafter? Since in India revenue share in subsequent weeks keeps getting lesser; the distributor is therefore forced to capture as many screens as possible in the first weekend itself, which may not be in the best interest of a film sometimes. Add to that the menace of piracy that one has to contend with on a week on week basis. Moreover, in order to feed their properties, multiplexes often ask producers to up their print count even if the producer is looking at a limited release of his film. This in turn increases cost (a single print costs Rs 40,000).

Similarly, over the years all movies box office collection have grown significantly due to the mushrooming of multiplexes, but has this actually helped a distributor in increasing his share of revenues? In 2001, Gadar did a net collection of Rs 800 million (Rs 80 crores) at the box office in India and the distributors share was Rs 600 million (Rs 60 crores), but seven years later with the release of Ghajini its net collection was Rs 1.15 billion (Rs 115 crores) in India and distributor share stands at Rs 580 million (Rs 58 crores), which is proportionately much lesser than that of Gadar.

Conversely, producers and distributors feel that they take a very big risk to invest in movies, whereas multiplexes get the content free of cost without any risk attached. However, don’t exhibitors also take risk to invest in cinema properties in various locations across the country? Moreover, multiplexes also have to pay fixed rentals for their properties irrespective of the occupancy levels.

A cinema gets long term tax exemption from government, but don’t producers too get certain subsidies from state and foreign governments for shooting films?

On the other hand, a cinema chain takes much longer to break even on a property than a producer or distributors takes to break even on his movie.

Just the way a movie’s fate cannot be pre-determined, the fate of a cinema property also cannot be pre-determined. Who thought Cinemax Versova — the third multiplex to open in the catchment area of Andheri — would be the most successful one? Similarly, who though Rakeysh Omprakash Mehra and UTV’s Delhi 6 would be below the mark? Also who thought Ghajini would set multiple records at the box office?

Every business has its own revenue streams. While cinemas make money on food and beverage (F&B) sales, ad sales and car parking; producers also make money on home video, satellite, DTH, digital, Internet, PPV rights and numerous other rights by juxtaposing it with a movie’s box office collections!

Last year the cost of operation for producers and distributors touched the sky due to high costs of movies, thus the return on investment was either insignificant or negative for most companies, which in turn affected their capital flow. On the other hand, some cinemas continue to operate with minimal profits and some others have posted loses. Needless to say the loss collectively posted by producers and distributors is manifold in comparison to that of the multiplex cinemas. So who has a better pulse of their business? Just because the multiplexes losses are lesser in comparison to the producers and distributors, does it mean that the latter should eye the former’s share in order to better his cash flow?

Each business has its own modus operandi. Just because the two are dependent on each other doesn’t mean the terms of operation are same or even similar.

At a time when the economic downturn is taking its toll on all and sundry, the rift between these two parties will only add fuel to the fire and adversely affect the film industry.

A solution needs to be reached at without further ado. Movies are made for the audience and need a wide distribution platform, which multiplexes provide. If the no-show happens come 4 April, it will ultimately be detrimental for one and all.