Film producers plan to go on an indefinite strike starting April 3, as they could not resolve their differences with multiplex owners over revenue sharing.
The move has come after multiplex owners did not agree to their terms of 50:50 equality in revenue sharing for every film to distributor and multiplex owners.
"We realised that we are talking to a wall and to the people who were insensitive to our demands," said filmmaker Mahesh Bhatt. "Multiplexes have adopted the policy of tossing a coin, and that is not done."
The rift between multiplex owners and producers has been going on for a while. But this is the first time that top producers of the film industry like Yash Chopra, UTV and Indian films came together and said that there will be no bullying tactics of multiplexes against them from April 3 until and unless they agree on equal revenue sharing.
At present, the deal between producers and multiplex owners varies according to the status of the film and the stars acting in it. If an actor like Shah Rukh Khan's film is released, then the multiplex will budge for their revenue sharing with producers. But if a lesser known actor's film is being released, the multiplex producers will dictate terms.
According to the producers, multiplex owners have formed a cartel and have armed-twisted them individually, and they refused to take it anymore.
"In UK and UAE, the distributors and multiplex owners have a 50:50 ratio of revenue sharing. In USA and Canada, 60 percent of the first week's collections goes to the distributor and 40 percent goes to the multiplex owners. Unfortunately, this trend is not followed in India and they dictate terms to us," said Ramesh Sippy.
"The multiplex owners earn 25 percent of revenue from the canteen, 15 percent from the car park and 8 percent from the advertising and we don't even ask anything from that," added Mukesh Bhatt.
At present, there are 240 multiplexes with 849 screens in India, with a capacity of 2, 27,084 seats per show. They are essential to the profits of the film because the tickets cost more vis a vis single screen theatres, resulting in a big profit margin for the producers and distributors.
When we contacted Shravan Shroff, owner of Fame chain of multiplex theatres, he said he could not answer any question at the moment. "We will invite the press in a day or two to answer all the queries," he said.