Saturday, June 13, 2009

Bollywood stand-off is finally finished

After two months struggle, the stand off between movie producers and multiplex owners finally ended on June 4, 2009. After a long discussion of eight hours the two parties came to a verbal agreement. For the time being, both parties agreed that in the first week of release, producers and multiplex owners will have 50:50 revenue sharing. The stand-off started in April over a introducing a 50:50 revenue sharing model between movie producers and multiplex owners. However, multiplex owners were asking for a performance based revenue sharing system.

(This entry was first posted in this blog a few days ago. However, for technical problems, it got deleted and I am reposting it today).

Indian film industry is one of the largest and most profitable movie industries in the world. Still, the industry does not make as much as Hollywood due to lower price of movie tickets. According to KPMG, the current size of the movie industry is estimated about $2.2 billion and is expected to grow by more than 9% every year in the next five years. In the last couple of years, Indian cities saw the rise of multiplex theatres which increased the revenue of the movie industry and also gave a big boost to small movie producers in India.

Due to the stand-off, release dates of many movies have been pushed forward. This would prove harmful for small movies.

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