Multiplexes to sign pacts with Hollywood studios

Multiplex operators are now negotiating with Hollywood studios on an individual basis, depending on their movie line-ups.

A senior industry official said, according to the discussions, the revenue-sharing agreement would be based on the number of movies the studio released and the number of prints that were released.

For instance, Sony Pictures, which is set to release Spiderman, Ghost Rider: Spirit of Vengeance and Men in Black III, may command a higher share of the first week's collection. “The negotiation details are still being worked out with individual studios,” the official said. In the last three months, the release of several Hollywood films, like Warner Bros’ Harry Potter and the Deathly Hallows Part 2, Fox Star Studios’ Rise of the Planet of the Apes and Paramount Studios' Captain America, ran into rough waters, following the deadlock.

Multiplex chains had asked for 55 per cent revenue in the first week of screening Deathly Hallows 2, as opposed to the 50:50 agreement for earlier films. Currently, both the parties are negotiating on a case-to-case basis, said a leading distributor from Mumbai.

Though the total contribution of Hollywood movies to the Indian box office remains marginal, it is an increasing figure. According to PricewaterhouseCoopers’ India Entertainment and Media Outlook 2011, the share of Hollywood content in the Rs 8,750-crore Indian film industry stood at 4.6 per cent last year, compared with three per cent in 2009. As many as 75 foreign films were released in India in 2010, with collections crossing Rs 400 crore.

In June 2009, multiplexes and distributors had signed a two-year memorandum of understanding, according to which, producers would get 50 per cent in the first week, 45 per cent in the second week, 37.5 per cent in the third week and 30 per cent in the fourth week. The agreement expired on June 30, after which both the parties started fresh negotiations with multiplex operators, demanding a 55:45 split in the revenue from the first week's collections.

However with Bollywood producers, the current agreement would be signed again, with the addition of a new clause for small-budget movies. “According to the clause, if a low-budget movie grosses less than Rs 6 crore, multiplex operators would get 55 per cent in the first week, rather than the 50:50 share,” said an official.