Producers-Distributors Versus Mutiplexes : Crucial Meeting Today!

Producers-Distributors Versus Mutiplexes : Crucial Meeting Today!
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Finally, on 29th April, the first step towards a settlement of the ongoing dispute between multiplexes and producers/distributors was taken. Although the talks between the two disputing sides remained inconclusive at the end of the meeting, the trade heaved a sigh of relief because a beginning had at least been made. For, this was the first time in 25 days that the two warring sides had come on the negotiation table.

It may be recalled that following a stalemate, producers/distributors had called for a suspension of all new film releases from 4th April. The standoff continued thereafter as all the earlier attempts at finding an amicable settlement had come to a standstill once the core committee of producers/distributors announced the suspension.

The meeting on 29th, attended by the core committee members like Mukesh Bhatt, Ramesh Sippy and Ronnie Screwvala with producers like Yash Chopra and Amit Khanna from the side of producers/distributors and Shravan Shroff, Rasesh Kanakia and others from the side of multiplexes, lasted for well over three hours. While the lobby of multiplex owners agreed to meet the demands of producers/ distributors insofar as they did not relate to revenue-sharing, the sore point, as always, was that of division of the box-office receipts between the two sides.

After a lot of deliberations, the seven multiplex chains gave up their demand for a performance-based revenue sharing formula when they realised that it was not at all acceptable to the core committee of producers/distributors. They then agreed to part with 50 percent of the net collections in the first week in favour of producers/ distributors, 40 percent in the second week, 30 percent in week 3 and 25 percent in week 4. Clearly, they had turned down the 50 percent demanded by producers/distributors every week.

At first reluctant to accept anything less than 50 percent in every week, the producers/distributors also stepped down their demand. They then demanded 50 percent in the first week, 45 percent in the second week, 35 percent in the third week and 30 percent in week 4. This means, there is a difference of 5 percent in the revenue-sharing in weeks 2, 3 and 4 between the formula advocated by the multiplexes and the one put forward by producers/distributors. With both sides sticking to their guns, the meeting ended without a solution to the problem which has already eaten into the industry’s fortunes in the golden summer vacation period. The two sides decided to resume talks on 5th May.

Besides the issue of the formula for dividing the box-office collections between multiplexes and producers/distributors, the other chief irritants for producers/distributors have been:

(i) the undue delay on the part of multiplexes in settling the accounts with them, and

(ii) they being forced by multiplexes to supply prints to feed the weaker multiplexes of the chains.

The multiplex owners agreed to henceforth settle the accounts in reasonable time and also to not arm-twist producers/distributors to supply prints for their weaker cinemas. Hopefully, a solution might be found next week.

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