Summer film profits threatened by strike

MUMBAI: The irony is inescapable. Just when Hindi film producers have agreed to call off their two-month-long freeze on new releases, the state’s theatre owners have decided to go on an indefinite strike from May 16.
More than 1,200 single-screen cinema halls in Maharashtra will shut operations to demand a reduction in the entertainment tax to 30 per cent, the abolition of the show tax or theatre tax levied by municipal bodies, the simplification of rules and procedures to renew cinema licences and that property tax be delinked from box-office collections.
"The state government recently reduced the entertainment tax on live shows to 25 per cent, but refuses to do anything for theatre owners," complained Nester D’Souza, president of the Mumbai Theatre Owners’ Association.
The tax and maintenance costs of running a theatre are mounting when box-office collections are dwindling drastically and seat utilisation is at an all-time low, he said. Running a theatre is no longer financially viable, he contended.
The strike call has come as a blow for film producers who have not released a single film since March because of a disagreement with distributors’ associations in three territories—Delhi-UP, West Bengal-Bihar and Punjab—about when movie cable and satellite rights should be released.
Producers had also stalled releases of major films in February and March because of the cricket World Cup and examinations. Four big films—including Ramgopal Verma’s ‘Bhoot’, Dinesh Gandhi’s ‘Armaan’ and Suneil Darshan’s ‘Andaaz’—were scheduled for May releases to cash in on the summer holidays, when the attendance in cinema halls are comparatively higher. "But with theatres planning to remain shut from May 16, these films will suffer severely since the Mumbai circuit is the biggest revenue-grosser," said film trade analyst Amod Mehra.
Ramesh Taurani, whose film ‘Ishq Vishq’ is scheduled for a May 9 release, is hoping that theatre owners and the state government resolve will their differences soon. "Otherwise, producers are doomed," he said.
On Monday, four producers’ associations decided to release new films without involving the distributors’ associations of the Delhi-UP, West Bengal-Bihar and Punjab territories. Anil Nagrath, director-general of the Association of Motion Pictures and TV Programme Producers, said the producers have decided to either release the films directly to theatre owners or form a parallel distributors’ association in these three territories.
Since March, the producer and distributor associations in the three north and eastern territories have been engaged in a duel over the release of cable and satellite rights. The distributors are demanding a five-year hold-up period to release satellite rights and one-year hold-up period for video and cable rights.
However, the producers believe that new films do business in theatres only for the first three months, so they should be allowed to release the film rights after six months of a release. "Moreover, with the onset of the digital print format, producers will start releasing 300 to 500 more prints than earlier," Nagrath said. "The distributors will hence be able to recover their money that much faster. So, the question of a one-year hold-up period does not make sense."