The villain of the piece

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Head to head Shah Rukh Khan confers with Aamir Khan during a press conference.
Head to head Shah Rukh Khan confers with Aamir Khan during a press conference.


The show might just go off at multiplexes across the country, as the ongoing strike between film producers and multiplexes short-changes the audiences.

If multiplexes don’t comply we will screen films only in single screen theatres.

We were lazy and disunited. So, they took advantage,” says seasoned producer Mukesh Bhatt, now trying to break the deadlock with the multiplexes in the ongoing tussle between film producers and multiplexes for a larger slice of profits.

“We provide international standard of viewing cinema. It costs us expert staff with huge pay packets. We cannot compromise on that. That’s why our profit share from producers and ticket rates is high,” counters Sanjay Koul, owner, M2K multiplex in Delhi.

In this tug of war between producers and multiplex owners, hardly anybody seems to spare a thought for audiences, who finally contribute to the producers’ and multiplex owners’ income. Films are still a primary mode of entertainment for a large majority of Indians. With the summer vacations round the corner, people have ample time for entertainment. More so, because IPL is drawing in the crowds in South Africa, leaving the cricket lovers back home high and dry.

So, what is the strike all about? What is so compelling that arch rivals Aamir Khan and Shah Rukh Khan joined hands to organise a press conference in Mumbai? And Saif Ali Khan acted as a mediator between multiplexes and producers?

The issue is simple: There are some 35 A-grade single screen cinemas in Delhi and five multiplex chains with two to five auditoriums each. The admission rate for single screen halls varies between Rs.30 and 90. The hall, according to R.K Mehrotra, general manager, Delite cinema in Delhi, spends some “Rs.2 lakh for maintenance every week”. In multiplexes, a ticket ranges between Rs.125 and 250 on weekends and its “maintenance cost is one-and-half-lakh per day,” as distributor Sanjay Ghai puts it.

For better viewing pleasure, audiences have to burn a hole in their pocket in multiplexes while most single theatres in Delhi offer little in terms of quality. That’s where multiplexes prevail.

High money

“Multiplexes charge 80 per cent of money from the producers every day irrespective of whether the film is small or big. With the rest 20 per cent, producers have to pay to the distributors and meet other expenses. The producer already pays his actor a huge amount before the film is released. And film industry takes care of the employment of at least 10 lakh people. So, how can 20 per cent be adequate for them?” questions producer-director Sudhir Mishra.

Hence, adds Aanand Mahendroo, whose “Rang Rasiya” is awaiting release, “This is a fight for principles.” Lalit Kothari, a distributor for many R.K. and Yashraj films for the last 52 years, chips in, “The strike has more to it than meets the eye. Multiplexes work smartly. They have to pay two taxes – entertainment tax and show tax. In Delhi, entertainment tax is 20 per cent and the show tax is Rs.20 per show which goes to the Municipal Corporation of Delhi. In Uttar Pradesh, entertainment tax is 60 per cent and show tax is Rs.20 to 60 per show in the halls having a seating capacity of 500 to 1000. All multiplexes got tax holiday for five years from the time they start operations. The income tax holiday was revoked two years ago. The multiplexes, despite enjoying tax holiday, charged 80 per cent from the producers all these years. They also get a lot of sponsors and advertisements. Moreover, show timings they provide to the films are not supportive. They start at 9.30 a.m. for which hardly anyone comes. Here, a filmmaker loses money, so they have to run those films again elsewhere. While in single screen the show timings begin at noon which gets audiences. Then there are hidden charges like one per cent INR (Indian News Review) that the Supreme Court has freed multiplexes from paying. It was like TDS that they had to play to the Government which they didn’t do all these years but it was included in the 80 per cent they took from producers. Moreover, there is manipulation in the admission of the audience to the halls. They allow in a viewer but do not ‘tear’ the ticket. The money from those entries goes directly into their pocket. So, a correction stage had to come.”

The Government, meanwhile, made money in all films, good or bad, for it got entertainment tax from 200 multiplexes in India.

Hence, Aamir and Shah Rukh joined hands. Their production houses had also suffered. The two Khans put three demands before the multiplexes: 50:50 share in screening in “all films, small or big”, all the discrepancies (INR, etc.) to be removed to ensure a transparent system, and distributors to be allowed to release films as per their choice. For instance, a film on a Parsi family would find more audiences in South Mumbai. “If multiplexes don’t comply,” asserts Bhatt, “we will screen films only in single screen theatres.”

While PVR and Big Cinemas are tight-lipped, Koul speaks up, “Producers should know that on the first four days of the week shows go very weak as there are few visitors. But the producers went straight away on a strike. They should have had a proper meeting with us, and also with the distributors and exhibitors to find an amicable solution. We are incurring huge losses because of it.”

The loss is calculated at a whopping Rs.90 crore per month for the multiplexes and another couple of crores for single screen halls. But the worst affected is the film industry which has already lost more than Rs.200 crore. “If the strike goes on, the loss would be unmanageable,” says Mahendroo, adding, the future of the film industry lies in small films. “You cannot have huge stars paid in crores and the film sinking in the first week. Moreover, Rs.125 to 250 per head for a ticket is big sum for a middle class family.”

Now, there is a need for founding an independent chartered accountant body which could audit the industry and multiplexes’ account. “We have told multiplexes, if we will survive, only then you will survive. So let’s reach an amicable solution,” says Bhatt.

Amidst the stand-off, is anybody thinking of the audiences?



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