While Reliance Entertainment is gearing up for the release of Sooryavanshi in the first week of April, now that different state governments are permitting cinemas to function at full capacity in keeping with the Centre’s directive, there is still a big roadblock to be surmounted. The producers of the big-budget film, which has been delayed by a year due to the pandemic lockdown, and the multiplexes and single-screen cinemas are fighting over two points: revenue-sharing and exclusive theatrical window.
While Reliance is asking for increased share of net collections, it is also demanding a reduced theatrical window of four to six weeks instead of the usual eight weeks. Insiders say that the production house is eyeing at a share of 65% of the net collections in the first week, 55% in the second week, 45% in the third week, and 40% in the fourth and further weeks. As per the pre-lockdown formula, it is entitled to 50%, 42.5%, 37.5% and 30% respectively in the first, second, third, and fourth and onward weeks. In case the film performs well, Reliance would be entitled to get 2.5% extra share in the first and second weeks. For widely-released films which underperform at the box-office, the first and second week’s shares will be 2.5% less than normal i.e. 47.5% and 40% respectively.
The national multiplex chains — PVR, Inox, Cinepolis and Carnival — are hesitant to accept the revenue-sharing formula proposed by Reliance. And quite understandably so. If Reliance has lost almost Rs. 25 crore by way of interest due to the year-long delay in releasing the film, so have the multiplexes and single-screen cinemas because of the shutdown due to the lockdown. Reliance is also aware that its revenues from Overseas may not be as per the pre-COVID levels because cinema attendance in many countries is low and also because cinemas in the UK are shut due to the new lockdown which may extend till July this year. Besides addressing the uncertainty about whether the public will come to the cinemas in large numbers, another logic behind Reliance asking for higher percentage shares from multiplexes — and, by implication, single-screen cinemas too — is that the loss (due to lower shares) that may accrue from Overseas should partly be made up from India.
Information feels, it would be ideal if the revenue share of Reliance were to be linked to the box-office performance of Sooryavanshi. There’s a big difference, though, in linking the revenue share to the performance of the film. Whenever revenues are linked to how a film fares at the ticket windows, it is a given that better the performance, higher the percentage share that will accrue to the producer/distributor. However, in the formula being suggested by Information, the reverse will hold true i.e. better the performance, lower the percentage share that should accrue to Reliance. This principle is based on the theory that Sooryavanshi is a hit film which, in normal circumstances, would net around Rs. 300 crore and that if the film is unable to deliver to its full potential, the reason would be the lack of inertia among the public to come to the cinemas due to the fear of the coronavirus.
The production house and the cinemas should decide that if the film nets Rs. 100 crore or less, 65% of the revenue would accrue to Reliance in the first week, 60% in the second week, 55% in the third week, and 42.5% in the fourth and subsequent weeks. If the film nets more than Rs. 100 crore but upto Rs. 200 crore, 60% of the revenue would accrue to Reliance in the first week, 55% in the second week, 50% in the third week, and 40% in the fourth and subsequent weeks. If the film nets more than Rs. 200 crore but less than Rs. 250 crore, the revenue accruing to Reliance would be 55% in the first week, 50% in the second week, 45% in the third week, and 35% in the fourth and subsequent weeks. If the film nets more than Rs. 250 crore, Reliance should accept the pre-COVID percentage shares viz. 52.5% (50% plus additional 2.5% for brilliant performance), 45% (42.5% plus additional 2.5% for brilliant performance), 37.5% and 30%.
The exclusive theatrical window should also be linked to the box-office collections of the film — lower the collections, shorter the window, and higher the collections, longer the window.
It may be mentioned here that reliable sources tell Information that Reliance is in talks with Netflix, its OTT partner, for different release strategies. Netflix and Reliance are trying to arrive at prices if Sooryavanshi is:
(i) premiered on Netflix exclusively, bypassing the cinema platform;
(ii) released simultaneously on Netflix and non-national multiplex chains and single-screen cinemas (because national multiplex chains will not agree to simultaneous release, Reliance will forgo the film’s release in those chains);
(iii) cinema release followed by release on OTT after 4 weeks;
(iv) cinema release followed by release on OTT after 6 weeks;
(v) cinema release followed by release on Netflix after 8 weeks.
As Reliance would need at least six to seven weeks to promote the film, it would be ideal if the stalemate between the production company and the Multiplex Association of India were to be broken at the earliest. On its part, Reliance would do well to expedite the settlement process — probably on the above lines — in its own interest and also in the larger interest of the film industry in general and the exhibition sector in particular. Till each sector does not stand in solidarity with the other sectors, getting the trade back on its feet may be difficult.