When a Bollywood movie ends its theatrical run, we get to know whether the film is a hit or a flop. Sometimes a film collects 50 crores and becomes a Super Hit and sometimes even after collecting 100 crores the film is declared a flop. This parameter is decided on the basis of “Distributor Share” which means how much money a distributor makes. A big film’s failure may shut their shop but the film’s huge success doesn’t guarantee them high returns. To understand this let me explain Box Office Model of Bollywood-
Producer– Producer is the man responsible for bearing all the costs involved in the film including artists fee to crew members and film promotion. (Karan Johar, Gauri Khan)
The cost Of Filming– A film’s cost is the total money involved. Film’s cost comprises of pre production+film making+post production+Promotion & Advertisement.
Distributor– Distributor is the most important terminology in the box office model. The distributor is the one who buys the movie from the producer and reaches it to the audience. (Fox Star Studios, Viacom18)
Exhibitor– Exhibitors are theatre owners who play the movie in their theatres. (PVR, Carnival Cinemas)
Now suppose a producer makes a movie and the total cost involved in the film is 100 crores including Promotion and Advertisement. The producer will search for a distributor who can make his movies reach to the theatres. Suppose Salman Khan is in the lead role of the movie means one is expecting that the movie will easily collect at least 200 crores at the box office. Due to brand Salman, distributors purchase the movie rights for a hefty amount (say 100 crores). Suppose the producer sells its Satellite Rights for 35 crores, music rights for 15 crores and overseas rights for 10 crores.
This means the producer has already earned 100+35+15+10= 160 crores before the release of the movie. He has made 160 crores by investing 100 crores. Profit has already been made. Now let’s talk about the distributor.
The distributor has paid 100 crores and he needs to earn more than 100 crores to make a profit. Suppose the movie fails (like Tubelight) and earns 120 crores at the box office. The distributor earns only 50% of this 120 crores i.e. 60 crores (because remaining 50% goes to the Exhibitors). It means the distributor had invested 100 crores and earned only 60 crores, resulting in a loss of 40 crores which will shut his shop. And suppose if the movie had earned 210 crores then the distributor would get 110 crores, making a profit of 10 crores which further gets distributed to local distributors.
If a movie turns out to be a blockbuster, the distributor makes some little profit but if the movie turns out to be a flop, distributors lose their hard earned money. On the other hand, Producers and Exhibitors are unaffected if the movie tanks.