Bollywood producers, Indian multiplexes end standoff
By Shilpa Jamkhandikar
MUMBAI (Reuters) - Bollywood producers have agreed to end a crippling two-month standoff over revenue sharing with Indian multiplexes that had dried up releases and led to large losses in the world's most prolific film industry.
The deadlock, which piled woes on an industry already battling a slowdown, ended late on Thursday after eight hours of talks when both sides came to a verbal agreement.
"The strike has been called off and you will see films being released at the box office from next week onwards," Tushar Dhingra of Big Cinemas, part of the Reliance ADAG group, told Reuters.
Producers had demanded a 50 percent share in box-office revenues, while multiplex owners favored a performance-linked model based on a film's budget and star power, resulting in a deadlock that has seen almost no releases since April 4.
"We have agreed to a 50 per cent revenue share for the first week, across board for all movies, including Hollywood films," Priti Shahani, Senior Vice President of the Indian Film Company, told Reuters.
Multiplexes are largely concentrated in cities and big towns in India, and have also encouraged the production of low-budget films that are a departure from song-and-dance extravaganzas.
India's filmed entertainment sector, estimated at about $2.2 billion, is forecast to grow by more than 9 percent every year over the next five years, according to consultants KPMG.
Box-office revenues are still less than 10 percent of Hollywood's because of low ticket prices.
Dhingra said all national multiplexes were part of the agreement. The two month gap will mean a backlog of movies waiting to be released, which may hurt smaller companies.
"The deadlock hasn't really caused losses for the producers so far, because it has only meant releases have been pushed forward," trade analyst Komal Nahta said.
"However there will be a huge pile up of releases in the next few months, which is bad news for smaller films."
(Editing by Matthias Williams and Sanjeev Miglani)