Hollywood studios, multiplexes compromise on revenue sharing

The dispute between Hollywood studios and the Multiplex Association of India (MAI) over sharing revenues from movies appears to be drawing to a close, with both sides arriving at a compromise formula.

According to the agreement, producers will get 50 per cent of the revenues in the opening week, followed by 42.5 per cent in the second, 37.5 per cent in the third and 32.5 per cent share of profits in the fourth week respectively.

Disagreement arose over the MAI’s proposal that studios get 45 per cent in the first week. “Now, when a movie does not come to India within two weeks of its international release, the studios will get 45 per cent in the first week, followed by 35, and 27 per cent shares of the revenues in the second and third weeks respectively,” said a city-based distributor privy to the agreement.

The earlier agreement, signed in 2009, expired on June 30.

Distributors who released the last part of the Harry Potter series in July on an interim agreement, say they were worst affected, as they unable to raise bills for the high-profile release.

Hollywood movies account for over 20 per cent of the overall movie ticket sales in India.

The agreement also says a ‘day-and-date’ film release will mean a revenue-sharing understanding which works for Bollywood movies. A day-and-date release refers to a Hollywood movie which releases in India within two weeks of its international release.

“In case of a day-and-date release, a 50-50 revenue-sharing agreement has been arrived at. This is the arrangement which is now functional for Bollywood releases,” the distributor said.

When contacted, MAI representatives said talks were in progress. “As and when a film is slated for release, discussions take place. As of now, discussions are on,” said Deepak Asher, president, MAI.

Over the past two months discussions between the duelling parties had led to a situation where movies like Final Destination 5 and Captain America were released only in single-screen theatres. These theatres operate on a rent system, where the studio hires the movie theatre for the duration of the movie’s run and pays rent to the owner.