Latest Tweets

Same Same, But Different

There are some editorials in which we put on record our stand on a film industry-related debate and some where we call out events or practices that we think are detrimental to the interests of the fraternity. This is not one of those pieces.

Our intent here is merely to highlight and share an observation that we found interesting because it seems somewhat counterintuitive.  With that advisory in place, here goes.

Let us consider the hypothetical (though by no means implausible) case study of the divergent box office trajectories of two different films.

The first film, let’s call it Naam Bade Darshan Chote (NBDC), opens huge on the back of its star-studded pedigree but, unfortunately, generates poor word-of-mouth almost from the word go. Consequently, its collections crash after its opening weekend and it limps to a first week tally of `125 crore, the vast majority of which was mopped up during the first three days. In its second week, the film is virtually on life support, collecting a mere `6 crore; and in week three, it is picking up the crumbs (`1 crore) before theatres pull the plug and discontinue shows.

The second film, let’s call it Chota Packet Bada Dhamaka (CPBD), has a decent though not gigantic opening. However, thanks to fabulous word-of-mouth, its collections drop only marginally (if at all) after its opening weekend and it collects a healthy `62 crore during its first week. The film continues to perform strongly, perhaps because by now the cost-conscious consumer is convinced that the content is worth the price of admission. Consequently, it collects `27 crore, `15 crore, `10 crore, `8 crore, `6 crore and `4 crore during weeks 2, 3, 4, 5, 6 and 7, respectively. 

As a result, both films end up with an identical lifetime tally of `132 crore net. Most observers, however, would argue that the moral victory belongs to the second, ‘smaller’ film that punched way above its weight, whereas the ‘bigger’ film would be deemed a disappointment for not living up to its potential.

But bragging rights aside, what do these collections tangibly mean for the distributors of each film in terms of their share of the box office revenue?

As we know, the revenue-sharing formula between exhibitors is not a standalone figure but a moving target that varies over a film’s theatrical lifetime i.e. the number of weeks it continues to be screened. Moreover, the ratios also change depending on the quantum of business that films do, with distributors enjoying enhanced shares for weeks 1 and 2 once they cross certain milestones in terms of their lifetime collections.

So, for the two scenarios illustrated in the preceding paragraphs, let us apply the relevant ratios through the course of each film’s theatrical run to see what the distributors’ share of each works out to. For the sake of simplicity, we are assuming that there are no ‘Fixed Hire’, ‘Minimum Guarantee’ or other commercial arrangements in play and using the standard formula for the entire collections of both films. As below:

 

*For films collecting over `60.7 crore net

It is an easy table to read and the numbers speak for themselves… and it is a pretty interesting story that they have to tell!

Despite the collections of both films being identical, the apparently disappointing film generated a substantial amount of almost `10 crore (or 17 per cent) more for its distributors than what accrued to those who distributed the apparently overachieving film. In effect, NBDC managed to take home 51.57 per cent of its net collections whereas CPBD could manage only 44.48 per cent.

So while the surprise hit may justifiably be proud of its moral victory, the monetary triumph (at least with regard to this face-off) quite clearly belongs to the underperformer – despite, or more accurately, because of its shorter theatrical run. So much so, it could have conceivably outscored the other film in terms of distributor share had it even collected almost `20 crore less at the box office.

As mentioned at the start of this note, and it bears reemphasizing, this is not a value judgment and there is no right or wrong implied here. Moreover, one recognizes and appreciates the rationale behind the mutually negotiated revenue-share formula – to incentivise exhibitors to give a long run to films in an era where we have a glut of new releases each week chasing a finite (and inadequate) number of screens.

The only moral of this story, if you insist on one, is a variation of the lesson we were taught in the childhood tale of the hare and the tortoise: in the film trade, the slow and steady can often win the race… but not necessarily the winner’s prize money!

- Nitin Tej Ahuja

Anonymous's picture