The Business of Hindi Movies
Cost :Budget : The Budget of a movie is referred to as the amount of money spent on making the movie, that is the production costs, the actors/performers/music directors and many more personnel involved the whole movie making process. The burden of the Budget cost is taken by the “Producer”.
Now the Producer can either invest his own money, take money from an financier on loan or Partnership.
Also a new trend with the incoming of Corporate is that they might provide the financing of a movie on the behalf of the Producer with profit sharing.
Selling Cost: When the movie is ready then either the Producer can release the movie through the distributors or he can sell the whole Product on a lump sum to an Interested Party.
The Former case is very rarely done nowadays. So, in most cases the Producer can sell the movie on a Premium to an Studio/Corporate.
Thus, the Producer can make an healthy profit even before the movie releases and now the main pressure to recover the investment is on the Party who bought the movie.
The Price which an Studio/Corporate pays to get the movie is called the “Buying Cost” or the “Acquisition Cost”.
Print and Publicity(P&P): On top of the Buying cost, the Corporate/Buyer now also has to invent an significant amount in the Print and Publicity costs of the Movie, to promote it on a wide scale and also to have an extensive release for the movie.
The whole cost/Total cost of the movie is thus, Selling cost+(Print/Publicity).
The above Total Cost is to be recouped by the concerned party by various channels of revenue.
Revenue :
The Revenue Channels for Hindi movies are generally considered as follows:
Indian Theatrical Share: 50%
Overseas Theatrical Share: 20%
Satellite : 20 %
DVD/Music : 10%
Indian Theatrical (Hindi):
The first and the major contributor for the revenue generation is the Indian Theatrical collections.
There are few terms in relation to Indian Theatrical run of Hindi movies:
Gross Collections : Gross is the total amount generated by a movie at ticket counters.
As simple as that.
Entertainment Tax : Most states levy an “entertainment tax” on movies least in India. On an average, across India it’s assumed to be 40%. The following is the general breakdown across the nation :
Nett Collections : After the entertainment tax is deducted from the Gross Collections, what is left is the “nett”. This is the money which is now with the Theatre owners.
