Indian multiplexes will not be able to offset the impact of the film strike/boycott/non-releasing with screening of Indian Premier League (IPL) cricket matches. The imminent IPL season was anyways going to put a damper on the box office for the next six weeks, but with Hindi producers refusing to release any new films, screening of cricket matches would have provided some respite for the multiplex operators.
From the Economic Times:
A senior executive with a Delhi-based multiplex chain, who did not wish to be quoted, said, “The IPL committee was asking for a very high price as minimum guarantee, in addition to revenue sharing arrangements. This is not a financially viable business model that multiplexes operate on.” He added that multiplexes can’t hike ticket prices significantly as that would not help in attracting volumes.
As per another senior executive with a company that was looking to bid for the multiplex distribution rights, IPL was looking at a minimum guarantee of Rs 35-45 crore and was awarding the distribution rights only for a year.
“Since the matches are happening in South Africa this year, it would have been an even bigger business opportunity for multiplexes, distributors and advertisers,” UFO Moviez CFO Kapil Agarwal said. The digital cinema solutions firm had evinced interest in providing back-end technology for live telecast of the matches at multiplexes.
Meanwhile, there appears to be no end in sight for the stand off between producers and multiplex operators. Though no major films were set for release during the IPL tournament anyway, there are no dangerous signs of post-IPL releases getting pushed back. From Times of India:
Films like Shortkut, Luck, Kaminaay, Kambakht Ishq, New York and Love Aaj Kal are a few biggies awaiting release. Going by last year’s IPL record, all but one film (Jannat) released during the matches bombed. Then, Ramzan begins on August 22 and most producers won’t release during the holy month. That leaves about two-and-a-half clear months for movies to release between the IPL and Ramzan. “The current situation is so fluid that one can’t say anything definite,” says Dinesh Vijan, Saif Ali Khan’s partner on Love Aaj Kal. “Movies with release dates slotted for May have been postponed. We intend to stick to our scheduled release date (June 26) and hope this situation gets sorted out soon,” he adds.
Trade sources confirm Vipul Shah had chosen August 14 as his release date for London Dreams. The producer had assumed he would get a clear run until Ramzan, and even further. “Now that films are being moved from their original release date; there is going to be a big clash from the time the strike lifts,” says Mehra.
CNBC-TV18 does a good job of crunching the numbers of what the multiplexes are losing from the current standoff:
Here’s the math:
The big-five multiplex chains together have 1.62 lakh seats. Each seat screens at least 4.9 shows a day, that’s 34.3 shows a week. This means every week, 54.55 lakh seats are available to generate revenues.
But weekly occupancy levels at most multiplexes stand at around 27% even with higher rates on weekends and holidays. This leaves just 16.36 lakh seats that actually generate revenues.
On average, a seat at a multiplex generates Rs 121 per show, with an additional Rs 31 on food and beverage. That’s a weekly revenue of around Rs 24 crore for the big-five chains.
INR 24 crore (Rs 240m) works out to almost $5m per week, which is a LOT for the nascent Indian multiplex industry. Meanwhile producers have floated the idea of each production house ‘adopting’ a single screen cinema and refurbishing it to multiplex standard, though how much substance or chance of realization such a proposal has is open to speculation.
Meanwhile, Bollywood stars like Shahrukh Khan, Preity Zinta and Shilpa Shetty - who have tended to side with the producers, perhaps not surprisingly given that many of them have their own production banners - can afford to take a relaxed attitude about both films and cricket’s no-show on multiplex screens at least for now as they own stakes in the competing cricket teams. Moreover from AFP:
Action hero Akshay Kumar is brand ambassador for Delhi Daredevils, movie hearthrob Hrithik Roshan is flying the flag for the Mumbai Indians, while screen siren Katrina Kaif is supporting the Bangalore Royal Challengers.
Top performers and music directors have also got in on the act, producing music videos for many of the teams that owe much to Bollywood’s song and dance routine tradition.
In their oversized filmstar sunglasses and designer clothes, Shetty, Zinta and Kaif added much-needed glamour to the gathering of corporate suits at the auction for new players in the resort state of Goa earlier this year.
For the actors, many of whom who have been making the rounds at promotional events before the start of IPL’s second season, merging cricket and film makes perfect sense given the fanatical following that both have on the subcontinent.
As Shilpa Shetty correctly observes, “Cricket is not a sport in our country, it’s a religion.” But if multiplexes are the temples, then the gods have deserted them and show no signs of returning until the keepers of the temples appease them.
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Filmmaker Ashutosh Gowarikar just can’t seem to cut a break these days. The director’s latest film, ‘Jodhaa Akbar’ , was scheduled to be released in 26 countries on February 15th, however multiplexes in India refused to play the movie due to an ongoing dispute with the film’s distributor, United Motion Pictures (UMP). Turns out the distributor wanted 42.5% of the second week’s gross in most cities, but exhibitors only wanted to pay 41%. In the end, a deal was reached late Friday evening giving UMP terms of 50% for the first week and 41% for the second week, except in Bombay where the terms were 45% and 37.5% respectively.
With exhibitor’s Friday schedules thrown into chaos due to the delayed release of ‘Jodhaa Akbar‘, the film opened Saturday to poor reviews. However the controversy didn’t end there. Protesters showed up at several theaters, including a Velocity multiplex in Indore and a PVR cinema in Guragon, near New Dehli. They disrupted screenings of the film by ripping down posters, broke windows and caused a public disturbance. Police actions, and a few arrests, broke up the protests and in most cases the screenings continued after a short interruption.
Apparently members of the Rajput community were upset that the romantic epic from Gowarikar was historically inaccurate. The three hour and twenty minute historical drama is loosely based on the love life of the Moughal king Akbar. According to India eNews the film portrays:
Jodha Bai as Mughal emperor Jalaluddin Akbar’s wife, which is factually incorrect. Jodha Bai was not the daughter of Raja Bharmal of Amber as shown in the film. The princess was the daughter of Motaraja Udai Singh of Marwar and she was married to Akbar’s son Salim alias Jehangir. And Mughal king Shahjahan was her son.
So, while most American and European audiences may not mind when their filmmakers take poetic license with historical events in their movies Indian audiences aren’t as forgiving. Police presence has since been beefed up around multiplexes showing the ‘Jodhaa Akbar’ and Additional Superintendent of Police, Mahesh Chandra Jain, stated “Security of those visiting the cinema halls will be ensured. No organisation will be allowed to take law in their hands.”
The release of ‘Jodhaa Akbar’ was highly anticipated, not only because it stars Indian mega-stars Hrithik Roshan and Aishwarya Rai, but also because Gowarikar has become a notable filmmaker after his 2001 film ‘Lagaan’ was nominated for a Best Foreign Language Film Oscar.
]]>Thanks to lurid exposes like the one which appeared in the December 22nd issue of The Economist most westerners probably think of India as a crowded and impoverished country filled with 1.1 billion people living in slums and working for miniscule wages. What they might find hard to believe, despite Bollywood’s international reputation as a bustling film industry, is that Indian’s spend Rs 8000 crore, or $2 billion, per year going to see movies. According to “Cinemagoing India“, a report published by Dodona Research, a UK-based industry analyst, this figure is not only accurate, but bound to grow over the next several years.
And if that doesn’t convince you, the Federation of Indian Chambers of Commerce and Industry (FICCI) hired PricewaterhouseCoopers to write a separate report which predicts that by 2011 the Indian film industry could be generating upwards of Rs 17,500 crore, or $4.4 billion. While this figure may not outpace yearly box office figures in the United States, the world’s highest grossing film industry, it still amounts to Rs 80, or $2, per capita in India. In a country where the average movie ticket price is under $1 and per capita income is $707, raking in that kind of dough is certainly an achievement.
This might be why last year Sony Pictures ventured into India to release the first Hindi language film produced by a major Hollywood studio, ‘Saawariya’. The film went on to gross $19 million. Other Hindi language hits such as ‘Chak De! India’, ‘Bheja Fry’ and ‘Taare Zameen Par’ brought in an additional $100 million making 2007 a banner year.
What’s more remarkable is that India has emerged as the third largest film industry in the world and is stocked mostly with single screen, antiquated theatres. However multiplexes are sprouting up like weeds all over the country changing the industry landscape and providing an escape for India’s middle class, flush with disposable income in one of the world’s fastest growing economies. Yet because ticket prices at the new multiplexes are higher than single screen theatres admissions have actually fallen.
Sound familiar? It should, it’s precisely what happened in the United States when over zealous exhibitors overbuilt multiplexes and began raising ticket prices in the 1980s and 90s. Though, much like their western counterparts, Indian exhibitors have found other ways to bring in revenue, as Anil Nagrath, secretary of the Indian Motion Pictures Producers Association pointed out in an article on 2007’s box office figures published by The Telegraph on December 17th:
“Multiplexes make their money out of the highly priced tickets and the over-priced snacks they sell. They don’t believe in numbers as long as a handful of viewers fills up their revenue target.”
Presently India has only 450 multiplexes, however there is an ongoing multiplex building boom occurring with large exhibitors such as Pyramid Saimira Theatre Limited and PVR having already announced their expansion plans. This no doubt accounts for the predictions that box office returns will increase by 30 percent over the next five years.
Part of the cause for the surge in multiplexes is the tax benefits for building such theatres. In some cities in India the tax on tickets is as much as the admissions price itself. Older single screen theatres have not been given such a tax break so they are slowly disappearing, much to the chagrin of their owners. But the tax breaks were only instituted for five years, a time frame which is quickly coming to an end, causing some major exhibitors to start duking it out with distributors over the rental terms of such movies as ‘Om Shanti Om’ and ‘The Simpsons Movie’
Another factor which both reports point to as a reason why the Indian box office will grow “too big to ignore” is the emergence of digital cinema. It is predicted India will be home to around 2,000 digital screens by 2010. Such technology will allow Indian language films to be distributed more rapidly and more cheaply. Rather than playing the same film for weeks, if not months, on end waiting for an expensive film print of a new release to show up, digital prints are far less expensive (Rs 5,000 or $125) and can be distributed more rapidly. Of course, that’s sort of pointing out the obvious, as the reduced price of distribution has long been hailed as a benefit of digital cinema, no matter the country. The real advantage digital cinema will bring to the Indian market is the ability for distributors to show their films in more remote areas of the country, specifically in what are referred to as Tier II and Tier III cities.
So, while many westerners might think of India simply as a country sucking up outsourced jobs, filmmaker Shekhar Kapur believes it will soon be recognized more as an international hub of cinema. In another article published in the Indo-Asian News Service, the director of ‘Elizabeth - The Golden Age’ was quoted as saying:
]]>“For many international releases today, where 80 per cent of the revenue was earlier coming from the US box office, today it is only a third. Two-thirds are pouring in from outside US markets. And in future, this would do down to just 10 per cent. European economy today is middle-aged. India and China are bringing in the young audience. The balance of 90 per cent will come from the young markets . . .”
For one weekend out of 52, Indian cinemas look like those in almost every other non-US territory dominated by Hollywood films. There were no less than five studio titles opening this past Friday: I Am Legend, 30 Days of Nights, 1408, The Heartbreak Kid and Air Buddies, with just one Hindi film (Hitchcock’s Strangers on a Train re-make Strangers), plus a last minute postponement of the release of Eastern Promises. While it shows a faltering grasp of the counter programming concept (vampire film, vampire/warewolf film, Stephen King adaptation and a narrowly avoided David Cronenberg film) it is the celluloid equivalent of saturation carpet bombing of Indian multiplexes with US films. The explanation is that no major ‘Bollywood’ releases are due for another week, when Aamir Khan’s much anticipated Taare Zameen Par (Every Child Is Special) opens, alongside mid-size title such as Welcome. So next week is back to normal.
But Hollywood films are slowly starting to grow in the Indian cinema market even though they are still to mainstream cinema, what non-English language films are in the US cinema market. An article in Time of India (Hollywood spins Rs 300 cr web in India - not web link) shows that films from the major US studios have crossed the 300 crore rupees threshold ($76m) compared to 241 crore last year, a significant leap, despite the number of titles released only going up from 74 to 76, i.e. three every two weeks. From the article:
The mood in Sony, Warner and UIP is therefore celebratory. According to trade guru Amod Mehra, Hollywood’s share in the cinema revenue pie in the country is still a nibble of barely 3 to 5%, but the fact that the Rs 300-crore mark has been crossed is reason enough to rejoice.
Proof of Hollywood’s growng appeal is reflected in the distribution pattern. Casino Royal was released with 427 prints in 2006, whil Spider-Man 3- the biggest ever hit in India so far - was released with 597 prints this year. In fact, big Hollywood films are now often released with 100-plus prints, a sign of growing demand.
The article goes on to stress that part of the reason for the success has been the dubbing of films into local Hindi, Bhojpuri, Tamil, Telugu and other regional languages. In fact, the listings for I Am Legend showing in half of all the Mumbai screenings in Hindi, with even one Tamil screening in Bombay. Meanwhile, home-grown fare has not had a particularly good year (Bad year for Bollywood) with a disproportionate number of flops this year compared to 2006. But don’t think that it is over for ‘Bollywood’. From the article:
Tushar Dhingra, COO of Adlabs believes that in spite of the string of flops, statistically 2007 was better than last year. He says, “The marketing has been more aggressive and I would say that the quality of films were better than the quantity. If you take films like Hey Baby and Om shanti Om, or even Aaja Nachle, they might not be stellar box office hits, but the fact remains that they have had better weekends. The quality of the movies has improved quite a bit and we need to concentrate on that.”
Hindi titles will still win out over Hollywood films at the box office for some time it seems. Despite the odd ‘freak’ week.
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