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Multiplexes: Biting the hand that feeds you

Finally, somebody with standing and honourable track record in the entertainment industry has
decided to take on the might of the multiplex chains. Unlike the old fashioned single screen
exhibitors and distributors of respective films, which believed in the policy of ‘live and let live,
now, in the case of multiplexes, the terms of business are one-sided, heavily loaded in favour of
the chains.

Ronnie Screwvala, who released a moderate budget film, "Mard Ko Dard Nahi Hota", a week
back has approached the Monopolistic and Restrictive Trade Practises Commission (MRTPC)
with a grouse that the major multiplex cinema chains have formed a cartel and are exploiting the
film producers-distributors by charging a high Rs 20,000 (+GST) Virtual Print Fee every week
which facilitate screening of films. Why every week? Beats logic.

Screwvala's company, RSVP, released a moderate budget, non-star (as in nil face value) film last
week titled "Mard Ko Dard Nahin Hota". The film was made at a budget of about Rs 12 crore and
was released at 450 screens. Assuming that 200 out of these were engaged at multiplexes that
would put a burden of over Rs 40 lakh for the producer. That is the burden on a small film.
Imagine the amount that a film which releases with 2,500 to 3,500 screens. It would be a small
fortune of more than Rs five crore to Rs six crore!

When the South film industries, Tamil, Telugu, Kannada and Malayalam, faced this problem just
about the same time last year, they decided to stop releasing films. The strike lasted for 48 days
till they got results.

The problem with the Hindi film industry is lack of unity. There are as many as four producers'
associations! Only two of them, The Film & TV Producers' Guild and Association of Motion
Pictures and TV Programme Producers (AMPTPP), matter since they have active producers as

The producers and distributors have found these charges to be arbitrary, adding to the risk factor.
If the roles of both the parties are defined, the content and the content provider should be calling
the shots. But here it is otherwise — multiplexes, the outlet provider for the content providers
dictate the terms.

Now that the other avenues like OTT are opening up, they should be wary. They should also
consider the example of the pioneers of the multiplex foray into India like Zee, Fame, Adlabs,
Fun, Big Cinema, and others who walked out in time after realising this was not the business
suited to India or, at least, most parts of the country except South. This is why. Hindi cinema has
about one or two new releases every week besides a couple of irrelevant films which don't even
draw footfalls for their first show and are declared as ‘No Audience, No Show'.
Next, you can't have a Salman Khan or Aamir Khan film every week. Even when you do, they
have an expiry date of three to five weeks at most. And, when they do, the number of screens go
on receding each week.

People compare the number of screens in India to other countries like China. However, with the
policies adopted by the managements, even these screens in India will find it hard to sustain.
People have gone and mindlessly built properties with anything between 10 to 16 or even 20
screen multiplexes in some metros. Fine, now, what do you screen there? In Western India, you
have a choice of a Hindi film, English film and Marathi or an occasional Gujarati film.
In East again, you may screen a Hindi, English or a Bengali film. In North, mainly in Punjab,
again, Hindi or Punjabi film with a limited audience for English films. It is only in South India
that these properties have a chance of survival as there is content on a more regular basis in
Tamil, Telugu, Kannada and Malayalam across the states besides audience for English and a
limited audience for Hindi films. Here, too, at best, a five-screen multiplex can survive. But
Chennai boasts of a 10-screen and a 20-screen property!

Do the multiplex managements think they can last by exploiting the content providers as well as
the audience (by arbitrarily increasing admission rates at whim)? The market rumour says, that
even two to three major multiplex chains have come to terms with the reality and are in talks for a
smooth exit.

How do multiplexes run? They run because a filmmaker provides content. What does he receive
in return? Less than 50 per cent of box office collections in the first week, 48 and 35 in the
second and third weeks, respectively. The risk is all his own. Finance, expense, labour and, if the
film flops, losses.

What is the multiplex investment? A onetime investment of whatever the property and
infrastructure cost. What it earns from a film is not only lion's share of the box office collections
but also other revenues from concessions, parking and, mainly, advertisements screened along
with a film's screening. None of that is shared with a filmmaker because of whom all these
revenue sources are possible.

You get footfalls because of the film you screen. You make money from concession. Also, from
parking et al because of the footfalls the film gets you. Fine. But, if you want to make the content
provider pay for the transfer of the content to the format you use, shouldn't you be paying?
In the days of physical positive prints that a cinema hall ran, of course, a maker or his agent as in
distributor provided the print to be screened. But that print lasted for ages and moved from screen
to screen and one town to another town. A film lab processed the print and charged a producer
according to the length of the film. That print was provided to the cinema hall. Loading a print on
the projector was a tedious task show after show. These cinemas never thought of charging a
producer for that!

"Sholay", for instance, ran for five years at Minerva Cinema, Mumbai and, reportedly, the print
was changed every one and half years. Thanks God, there were no hurdles in those days! The old
print, if in runnable condition (as the term was used), went to other towns. Compared to this, what
a multiplex feeds on its projection system is lost forever, does not come back to the distributor or
the producer!

In that case, if a multiplex is going to charge a producer for loading his film on its projection
system, why should a producer not get a royalty for providing content to a multiplex up front?
The rest can be shared as decided!

Earlier, an exhibitor came to a distributor's help by advancing him money at the time of release
against the collections that would accrue when the film was screened at a cinema. That helped the
distributor pay the lab bills. Now, it is quite the contrary! The business was of mutual
accommodation between the two. If an exhibitor lost money on a particular film, the distributor
gave him better terms in the next movie.

Multiplexes have driven out the first weekend compulsive movie-goers whom we called masses
with their high admission rates. Film entertainment is not meant only for the moneyed. From
airlines to net providers and cell phone networks, everybody realised that the money and profits
are in volumes. India is a vast country, be reasonable and go for volumes in business. Your
screens won't be putting up ‘Show cancelled due to lack of audience' signs anymore! A thing that
happens on regular basis come Monday at most multiplexes.

Screwvala has a good standing in the film industry. Were he still heading Disney, multiplexes
would not have dared to take panga with him. But, even now, he is garnering a good lot of
support and as things stand, multiplexes may soon face a South film industry-like revolt here.