Bollywood producers and multiplex owners stand-off ends

Munish Kalia, manager, Safari Cinema in London's Middlesex, is a happy man as the stand-off between Bollywood producers and multiplex owners came to an end early on Friday morning. Kalia is no longer required to down the shutters of his movie theatre from Monday, which he had planned to do earlier in the absence of new Hindi movie releases.

Movie theatres in cities such as New York, Vancouver, London and Dubai took a big beating as the flow of films from Bollywood came to a standstill and many have had to temporarily close down. The bane of contention was over revenue sharing and the deadlock had prevented new films from being shown in Indian and global multiplexes since April 4, 2009.

Producers demanded a 50-50 per cent share in the profits generated by the cinemas, while theatre owners argued the producers' cut should be less if a film does poorly at the box office. The multiplex owners wanted a performance-linked model based on a film's budget and star power.

A phone call to the Eagle theatre in New York, makes the picture clear. "Due to the Bollywood strike Eagle Theatre is closed," a recorded voice says.

The Raja Cinema in Vancouver also shutdown on May 12. "We'll be temporarily closed but hope to reopen with a new movie in June," the theatre's website says. Its tickets are priced between $ 5 and $ 8.50.

These are ethnic theatres and are in cities having a large Indian diaspora. They depend largely on Bollywood content for their programming and are screening older films.

"We are screening Dostana currently but barely two to three people come as compared to almost 1,000 people coming in on weekends," Kalia said.

Murli Shanker, manager, Donya Cinema in Dubai was also hoping for the stand-off to end soon. His theatre is screening Jaane Tu Ya... Jaane Na and Ghajini.

"We are miles away from India but and not even involved in the issue but we're still affected. The stand-off only added to our woes of running a high maintenance business. Since there have been no new movies in a while, audiences will be curious which may see a lot of footfalls," Shanker says.

On June 5, the 50 per cent revenue share has been agreed on for the first week. Reports also suggest that all national multiplexes were part of this agreement.

Now, with some big-ticket releases like Yashraj Films' New York, Eros' Kambakkht Ishq and UTV's Kaminey scheduled for release in the next two months, things could be better for these theatres.

For the Rs 11,000 crore Indian film industry, overseas box-office revenues are a significant revenue stream. It is the second largest revenue stream after domestic box-office collections.

Overseas revenues contributed almost 9 per cent of the total revenues in 2008 and this is expected to grow to about 9.8 per cent by the end of 2009, according to the Ficci-KPMG report of the media and entertainment industry.