If you have tried booking movie tickets online for the upcoming Bollywood venture Sooryavanshi, you may have noticed that many top cinema chains including PVR, INOX and Cinepolis have not opened advance booking for the film yet.
This is because of the tiff between the producers and exhibitors on revenue sharing. Exhibitor Vishek Chauhan, who runs single-screen Roopbani Cinema in Bihar's Purnea district said that the producers of the film are asking for higher distributor share.
Sooryavanshi is presented by Reliance Entertainment and produced by Rohit Shetty Picturez in association with Dharma Productions and Cape of Good Films. Reliance Entertainment is also the co-distributor of Sooryavanshi.
"While they (multiplexes) have opened advances for (Hollywood venture releasing on November 5) Eternals but not for Sooryavanshi. National chains contribute 60-70 percent of revenue for any Hindi film. We are told that by today the advances could open," said Chauhan.
Analyst Karan Taurani, Senior Vice-President, Elara Capital explained that producers of Sooryavanshi are asking for a distributor share of 60 percent in the first week. Pre-COVID their share was around 50-52 percent in first week.
He pointed out that Hollywood studios and producers of Bell Bottom were given a higher distributor share of closer to 60 percent in the first week. And producers of Sooryavanshi are expecting the same revenue share to continue.
The revenue sharing model under which some portion of a film's box office collections goes to those distributing the film and the rest to the exhibitor underwent a change due the COVID-19 impact.
With theatres shut for many months, many studios and producers held film releases for long periods which led to heavy losses. Owing to this, producers asked for higher revenue share which is currently at 60 percent revenue in the first week, 55 percent in the second week and 50 percent in the third and fourth week.
Pre-COVID, the revenue sharing was around 50 percent in the first week, 42 percent in the second week and 37 percent in the third week. And if a film is expected to deliver strong performance at the box office then in the first week the distributor share is 55 percent.
For Sooryavanshi, the exhibitors are seeking to give a distributor share of around 55 percent in the first week.
Chauhan said that PVR, INOX, Cinepolis are not agreeing to 60 percent distributor share because they have content to play on their big screens with Eternals also releasing on the same day as Sooryavanshi. "Plus, exhibitors are arguing that if they agree now for higher distributor share then every Hindi film producer will ask for it and then the same issue will arise on November 26 when Satyameva Jayate 2 releases."
Although top multiplexes are trying to keep the distributor share at 55 percent, multiplexes including Carnival Cinemas and Mukta A2 Cinemas have opened advances for Sooryavanshi. In addition, many single and two-screen cinemas have started the advance booking for the Bollywood venture.
Chauhan noted that while cinemas that have opened the advance booking of Sooryavanshi have agreed for higher distributor share, these cinema chains have been told that whatever is decided with national chains that will be for all.
Taurani pointed out that distributor share is likely to trend higher in the 57-58 percent range as against 50-55 percent in the pre-COVID times.
Opinions remain divided over the ongoing issue over higher distributor share. While Taurani said that distributor share to be higher in most states despite occupancy cap removal as producers have incurred losses over last one year waiting for cinemas to open up, Chauhan said that producers alone have not faced losses.
Chauhan also said that he has been asked to pay 10 times higher advance for Sooryavanshi which cannot afford in times of COVID-19 when limited films have done good business at the box office.
"The distributor for Bell Bottom (which was produced by Pooja Entertainment, Emmay Entertainment and distributed by Pen Marudhar Entertainment) took Rs 50,000 but for Sooryavanshi the distributor is asking Rs 5 lakh. Even for a movie like War, I had paid an advance of Rs 1-2 lakh in the pre-COVID period," he said.
According to him, if the disagreement between producers and theatre owners is not resolved soon then Sooryavanshi's business will see a big impact.
"It is not looking good for Sooryavanshi which is touted as a venture that is likely to revive the film business. Also, theatres for the south market have Rajinikanth's Annathe. And then there is also Eternals," added Chauhan.
It is estimated that Hollywood's Eternals saw over 3,000 tickets sold when the advance booking was opened on October 31 at PVR for IMAX shows.
While there are concerns regarding advance bookings for Sooryavanshi, the real test will be on November 5 when the film will hit the theatres.
Taurani noted that there will be a sharp reversal towards pre-COVID distributor share in the next six months if there is recovery in box office collection for which all eyes are on Sooryavanshi's box office business.
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