No 50:50 profit split with producers: Multiplexes

Even as the April 3 deadline for the indefinite strike approaches--a date after which producers have threatened not to release any Bollywood films in multiplexes across India--the producers' United Forum has been using every opportunity to draw attention to its demand for a 50-50 revenue-sharing model with the 850 multiplex screens across the country

No 50:50 profit split with producers: Multiplexes

But multiplex owners, who currently keep more than half the profits from shows, say it is not feasible for them to agree to a 50-50 split. Devang Sampat, senior vice-president of the Cinemax Group said he and colleagues from other multiplex chains like Inox, PVR, Fame, Adlabs as well as Fun, feel they've been accused of "arm-twisting.'' However, no one seems interested in their side of the story.

Trade consultant Amod Mehra said trade reports show 90% of multiplexes are in the red. Giving the example of a couple of leading multiplexes in south Mumbai, Mehra said, "Many multiplexes are rented properties with rents as high as Rs 35 lakh a month.

Their electricity charges are another Rs 5 lakh. Salaries and incidentals cost Rs 15 lakh.'' According to him, in other words, each multiplex spends Rs 50 lakh a month, whether or not they do any business. "Bollywood films have not done well in the past three months. So the multiplexes will have run losses in the current quarter, January to March 2009.''

Sampat says if the increased margin on food and advertising revenue were not available to multiplexes, then each one of them would bleed. "Even now, many of us just about manage to get through by the skin of our teeth,'' he said.

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