December 21, 2011

Theatrical HIT, Recovering Cost, Distributor share, Nett Gross. Get Familiar with Box Office Terms.

Have you ever considered how Box Office evaluates a film success and its failure. Which film has made profits to Makers, Exhibitors & Distributors. Here below are some of the list which will ease your thought process. Earlier only theatrcial business is the major parameter for a film's success, but with business growing lots of other avenues have also erupted. 

Many sites gives false reports regarding a Film success and datas are manipulated accordingly for personal benefits. So, here are some tips which can help you to access a film's success on your own.

1. Film Cost (Investment) - It is the production cost of the film including all the cost of the stars and everything else. Nowadays marketing cost is also included in it.

2. Cost Recover before release - It is the amount that is recovered even before the film is released in theaters. It can be Satellite & Music rights, other rights or even subsidies.

3. Film Gross - It is the amount collected from the Theaters inclusive of TAX amount.

4. Film Nett Gross - It is the amount collected from the Theaters minus TAX amount.

5. Distributor Share - It is the amount recovered by makers/exhibitors/distributors after paying the rentals of the theaters. (It is approximately 50-60% of nett gross in Single Screens & 40-50% in multiplexes).

6. Clean HIT (Theatrical HIT) - Film recovers it full cost from Theatrical revenues (i.e., Distributor share is more or equal to Film Cost).

7. HIT - Film recovers its major amount from Theatrical revenues and earns profit through other rights such as Satellite, Music etc.

8. Average - Film just recover its total film cost from Theatrical, Satellite rights, Music rights etc.

9. Flop - Film fails to recover its cost from all the avenues such as Theatrical, Satellite, Music & other rights.

Few more Terms Equally Important

10. Overseas Business - Nowadays a film recover its huge chunk of money from overseas also. But two major problems are their for evaluation. 1. Overseas datas are not so transparent and provided by makers directly. Many manipulated datas are floating around. 2. Market is still very small compare to Indian Market, only few films have made very good inroads to have comparative figures to Indian Market. Just for comparison - In India nowadays on average for a HIT Film with decent budget grosses around 50-70 crore nett (70-100 crore gross) figure. But in overseas a HIT film grosses 10+ crore gross (INR). So, Box Office generally consider domestic market as film success parameter and overseas as additional revenue. Moreover in Overseas hype, visibility, marketing are more important parameter than content.

11. Satellite Rights - It is the amount recovered by makers by selling satellite rights to a particular channel (e.g, Star, Sony, Colors, Zee etc).

12. Music Rights - It is the amount recovered by makers by selling music rights to music companies.

13. Super HIT, Blockbuster & All Time Blockbuster - It is all Sub Part of Clean HIT (point no.6 in the list). If a Film is Clean HIT and it is still earing profits left and right, it is further provided adjective such as Super HIT, Blockbuster & All Time Blockbuster (ATBB). It is basically defined by Return of Investment (ROI) defined next.

14. Return on Investment (ROI) - It is a ratio calculated by Distributor share & Film Cost. In Layman language we can say it is the percentage taken of Distributor share by Film Cost.

Hope article is helpful and more inputs are welcome.

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