India strike ends with revenue share deal

Split ends two-month new release lockout

NEW DELHI -- The two-month dispute between producers and multiplexes over how to share ticket revenue -- estimated to have cost the biz 3 billion rupees ($6.2 million) -- has been settled.

Refusing to release new movies under terms they considered unfavorable, producers and distributors turned off their distribution tap in April, leading to a dramatic boxoffice decline.

Reliance Big Entertainment chairman Amit Khanna said the strike ended early Friday morning following a marathon meeting between both parties in Mumbai.

"Both parties have arrived at an amicable solution," Khanna said. RBE, which is investing in the new incarnation of DreamWorks, runs India's largest theatrical chain, Big Cinemas. Other top chains that were part of the discussions include New Delhi-headquartered PVR Cinemas and Mumbai-based Fame Cinemas and Inox.

No new major releases hit screens since the strike was called by the United Producers Forum, which represents such top banners as UTV Motion Pictures and Yash Raj Films.

In recent years, producers and multiplex owners have been battling over revenue-sharing terms that have been negotiated on a per-picture basis depending on the title's budget and star power.

When talks with multiplexes would fail, releases of films suffered, including last year's "Tashan" by Yash Raj Films.

Although producers demanded a 50-50 split, multiplexes argued for a performance-based revenue-sharing system based on a film's budget and star cast.

Khanna added that the new terms the parties agreed to set out a revenue-sharing system for the first four weeks between producers and multiplexes, with the multiplexes gradually increasing their share of ticket sales. The weekly breakdowns between producers and multiplexes, respectively, will be: 50:50, 42:58, 37.50:65 and 30:70, irrespective of a film's budget or star cast.

Movies that do "exceptionally well" will see producers getting an additional 2.5% and the same amount will be reduced for films that perform below expectations.

"It's not just revenue terms that were finalized," said Khanna, adding that other issues resolved include the rights of producers to determine the number of screens on which they open their films, while multiplexes will have the right to decide how many shows they want to run of any release.

While the strike as led to a backlog of titles fighting for scarce release dates, Khanna said he didn't see any negative impact "as there is enough elasticity to accommodate releases in the coming months. I am confident the industry will make up for any losses."

Director-producer Mahesh Bhatt told THR, "It's good to finally see both producers and multiplexes coming together to find a solution for the well being of the industry. I sincerely believe that all the differences of the past are over."

Bhatt's banner Vishesh Films is headed by his producer brother Mukesh who was actively involved in the negotiations. Bhatt said that Khanna "played a crucial role in the negotiations so that we could all arrive at a solution."

The Indian arms of Hollywood studios were not officially part of the strike, but Sony Pictures saw its May 29 release "Angels & Demons" open only in single-screen theaters and not multiplexes. Paramount's "Star Trek" opened Friday in both types of cinemas.

SPE India MD Kersey Daruwalla said, "We welcome the ending of the strike and the return of our audiences to the theaters where we have a strong lineup for the summer."

One of the first major Bollywood releases after the strike will be "Kal Kissne Dekha" (Who Has Seen Tomorrow), co-produced by RBE-owned Big Pictures, which is slated for June 12. Sony will distribute the Bollywood release "Tere Sang" (With You) in the coming weeks.

Other upcoming releases include big-budget offerings such as Dharma Productions' "New York," UTV Motion Pictures' "Kaminay" (Treacherous) and Eros International's "Kambhaqt Ishq" (Notorious Love), which features cameos by Sylvester Stallone and Denise Richards.