January 31, 2014

Jai Ho Economics: Hit-Flop and Profit-Loss for Makers and Distributors.

Since, Jai Ho has under performed at Box Office, many are asking question on the film fate. We have summarised few points below to make it clear for all. Jai Ho is set to be one of those rare film in recent times, which have made makers earned crores, but distributors are struggling to recover their investment. Reason, film theatrical rights are Sold for huge record price. Let's look at the basic economics of the film post-release.

Budget of Jai Ho: Film Cost: 55 crore. P&A: 15 crore. Total: 70 crore (Approx).

Theatrical Rights (India + Overseas): Sold to Eros for 111 crore.
Satellite Rights: Sold to Star Network for 50-55 crore (Approx).

Profit/Loss Made by Makers: [Theatrical Rights + Satellite Rights + Music + Home Video + Others] - [Budget of Jai Ho] = [111 + 50-55 + Rest 10] - [70] = 100 crore (Approx) of Huge Profit.

How much need to Earn by Distributors (Eros and Sub-distributors) to Break Even: Jai Ho is brought by Eros for huge price and even they have Sold it to sub-distributors for record price in many circuits. Eros and other Sub-distributor needs to earn 111 crore distributor share from India Overseas. Say, Jai Ho earns 8-10 crore gross from Overseas theatrical, that means around 25 crore distributor share from Overseas. Then it needs further 85+ crore distributor share from India Theatrical to be in safe side. As Jai Ho is collecting significant in Single Screens, the DS there is on higher side. Still Jai Ho needs to collect around 155-160 crore nett from India alone for distributors to break even or earn some decent profit. This figure is looking tough for Jai Ho to collect and it is more or less certain that distributors or few sub-distributors will fail to recover their investment.

Jai Ho Film Verdict: Above Average: 115-120 crore nett. Semi Hit: 120-125 crore nett. Hit: 125-130+ crore nett.

Note: Above is just estimation for those who want to know the Jai Ho business aspects. Film is still running in theaters and final analysis may change. We have done the analysis looking at the film First Week Trend.

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