Bollywood film producers are going on indefinite strike from this weekend, after failing to resolve differences with multiplex owners over their share of box office takings.
The move is likely to hurt India s $2.1 billion a year Hindi-language movie industry, which is already feeling the fall-out from the global economic slowdown as audiences dwindle, but both sides are refusing to budge.
It is unfortunate and a reality now. We are going on strike from April 4, said producer Mukesh Bhatt.
We have been discussing with (the multiplex owners) to sort out this issue for the last two months but no solution has been found.
A number of new releases have already been put back, including Bhatt s Jashn, Yash Raj s New York and Anil Kapoor s Short Kut. Other studios have shelved promotional work and publicity because of the uncertainty.
At issue is the producers demand for a 50 percent share of revenue earned from their films, following practice in other countries.
But multiplex owners are unwilling to give up their current cut, which can be as high as 60 percent, saying they are only prepared to share takings equally if a film does well.
Producers complain that multiplex owners have effectively formed a cartel and were negotiating unfair deals with individual filmmakers.
Multiplex cinemas have taken off in India in the last five years.
There are now 240 multiplex cinemas with a total of 849 screens. Many have sprung up in new, Western-style shopping malls in big cities.
With higher ticket prices – often more than three times the price at a single screen talkie – multiplexes generate about 65 percent of film revenues.
In most countries in the world, multiplex owners share a revenue of 50:50 so why not India? said producer-director Yash Chopra. We feel our demand is justified and they should agree to it.
But Tushar Dhingra, head of the Big Cinema multiplex chain promoted by Indian corporate giant Anil Ambani, said their argument against the producers was very simple.
If a film does well we are willing to pay 50:50 revenue to producers but unfortunately if a film does not do well then we cannot pay that kind of money to them, he said.
We have invested huge money in our properties and one cannot compare us to the West. In those countries the market has been saturated over the years and only then can this kind of revenue sharing agreement come into effect.
We are still a nascent industry (compared with) them.
The managing director of the Fame Cinema chain, Shravan Shroff, added: We have computerized the entire ticketing system in India. We update regularly the ticket sale figures to producers via email. We have made this business very transparent, which was not the case earlier. Asked why relations with the producers have deteriorated so badly, Shroff blamed producers for making bad films.
When the producers started giving bad films to us, the audiences ran away. So, we are saying to them in simple words: give us good films and we are ready to pay you good money and also 50:50 revenue.
