A long line at India multiplexes — for the films

100-plus movies compete for release after two-month strike

NEW DELHI -- Some 100 films are waiting for release following a resolution over revenue-sharing terms last week that ended a two-month strike called by producer/distributors against exhibitors.

One of the immediate beneficiaries: Sony Pictures' "Angels & Demons," which finally opened in multiplexes Tuesday after its initial May 29 release here was restricted to single screens, even though Hollywood studios here were not officially a party to the strike.

But given that screen time is now more precious than ever, "Indian films could be given first preference as they usually attract more cinemagoers, and that could impact Hollywood releases," said Tushar Dhingra, CEO of India's biggest multiplex operator, Big Cinemas.

Regardless, the upcoming weekend has a plethora of big-ticket releases -- Warner Bros.' "Gran Torino" and Fox's "Bride Wars" will, for example, compete against major Bollywood pic "Kal Kissne Dekha" ("Who Has Seen Tomorrow") co-produced by Big Cinemas' production banner Big Pictures.

Sony Pictures will bow its tentpole release "Terminator Salvation" on June 26 and distribute Bollywood title "Teree Sang" ("With You"), slated for Aug. 7.

The industry lost about 3 billion rupees ($63 million) during the strike.

"Boxoffice for this year will definitely be negatively impacted but by what% is difficult to state," said Timmy Kandhari, Mumbai-based PricewaterhouseCoopers entertainment analyst. "There will be a logjam of releases which will eat into smaller films which could have had a better run otherwise."

A recent report by U.K. boxoffice analyst Dodona Research indicates that cinema admissions average about 1.5 billion annually in India's estimated 10,000 screens, of which 1,350 are multiplex screens. Dodona projects that total theatrical boxoffice will reach $1.3 billion by 2012, representing a 25% increase over 2007 figures. The report adds that owing to higher ticket prices than traditional single-screen cinemas, multiplexes now account for more than 50% of boxoffice receipts.

But the strike also had benefits. Producers came together in a rare display of unity, "something that will be helpful in the long-term as we lobby for bigger issues with the government such as reducing and standardizing entertainment taxes and fighting piracy," said UTV Motion Pictures CEO Siddharth Roy Kapur.

The United Producers Forum will meet with Prime Minister Manmohan Singh and senior government officials soon to discuss these issues.

However, it is the settlement of revenue-sharing terms that is seen as a breakthrough, and a win-win for both producers and exhibitors. Compared to the past, which would sometimes see a breakdown in negotiations between distributorsand exhibitors resulting in stalled releases, the new terms specify a scalable formula.

Starting with a 50:50 share in the first week, distributorshares for the next three weeks will be 42.5, 37.5 and 30%, respectively. Films that gross more than $3.6 million will get a 2.5% bonus favoring distributors.

Dhingra said that this agreement brings the Indian industry "at par with the U.S. where similar terms are also followed with roughly the same percentages."

While the terms appear to be slightly in favor of the producers, Kandhari still feels that "because it was arrived at amicably, it benefits both parties who now seem to have a better understanding of each other's business."

Because major multiplex owners like Big Cinemas and PVR Cinemas have also diversified into production and distribution, skeptics can point to a possible conflict of interest in negotiations. "For diversified players, the production and multiplex divisions are very distinct businesses so I think they really negotiated terms more as multiplex owners than as producers," Kapur said.

But Kapur agrees that the brunt of the strike seems to have been borne by multiplexes "since they had to battle with daily fixed costs while producer/distributors had to see their returns on investments delayed because of the strike."

Some multiplexes saw the strike as a catalyst to source alternative content. Big Cinemas, which recently dida deal with U.K.-based cinema content provider More2Screen, will in select venues soon screen Italian opera titles "La Cenerentola" ("Cinderella") and "Giulio Cesare" ("Julius Caesar") with English subtitles.

Going forward, producers have finalized release schedules for major Bollywood offerings such as Yash Raj Films' "New York" opening June 26 and starring Katrina Kaif and actor John Abraham, that revolves around a group of Muslim friends in the U.S. post-Sept. 11.

Another ambitious release is the July 10 opener "Kambhat Ishq" ("Notorious Love") from Eros International, featuring Sylvester Stallone, Denise Richards and Brandon Routh in cameo roles with top Bollywood stars Akshay Kumar and Kareena Kapoor.

UTV has lined up "Kaminay" ("Crooks") -- from acclaimed director Vishal Bharadwaj -- for the crucial Aug. 14 holiday weekend along with Eros' "Aladdin" featuring iconic thesp Amitabh Bachchan.
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