If you are reading this and you are not an movie exhibitor in India, be thankful.
The ongoing battle between producers and cinema owners in India was still going strong as the calendar moved toward the second half of 2009. Virtually no new films have been released on India's cinema screens since April 4, as producers demand a 50 percent share in box-office revenue while multiplex owners hold out for a performance-based model based on a film’s budget and star power.
Marketing and distribution of all new Bollywood films has been suspended, and media reports estimate multiplex revenue losses at approximately US$64.4 million in the first quarter. Average occupancy for the April to June period has reportedly fallen to 10 to 15 percent since the tussle began, reducing plex revenue by 30 to 50% according to an April 16, 2009 report by Angel Broking, which continued to rate Indian multiplex stocks as neutral.
But the same report asks why the issue of revenue share has become so important issue after nine years of corporatization and growth of the multiplex industry.
"Revenue sharing amongst the producers/distributors and multiplexes has always been on a case-by-case basis depending on the star cast, film budget and bargaining power of the production house," said the report. “Conventionally, multiplexes had been sharing 48% of their ticket sales of a film [net of entertainment tax] with film producers/distributors in the first week of release, which decreases to 35-38% from week two onwards. However, producers/distributors are pressing for a flat 50% revenue sharing for all the movies exhibited across weeks, as is the case abroad."
The brokerage firm maintains that the Indian multiplex industry is facing several strong "headwinds" in the near-term: 1) delayed movie releases owing to the exhibitor-producer row, 2) a weak movie pipeline, and 3) stagnation due to a slowdown in consumer spending.
In the interim, most multiplexes are cutting costs—operating fewer screens and lowering advertising spends—while producers have resorted to re-releasing old titles on single screens to draw audiences, though not to churn greater revenues.
Cinepolis Expands to India
Meanwhile, 38-year-old Mexican exhibitor Cinepolis announced in May its plans to open 500 screens across India within the next seven years. The circuit presently reports it has more than 2,000 screens in six countries and serves more than 100 million patrons annually. The company claims a 46 percent share of screens and 56 percent share of box office in its homeland.
“We have made a substantial commitment to India and are excited at the prospects of being in a country which is the highest producer and consumer of filmed entertainment. We envision ourselves to be present in India for the long term and for India to become our largest international expansion project,” said Javier Sotomayor, Cinepolis strategy head.
So far, Cinepolis has identified 110 screen locations across eight cities in India, with operations expected to start in the latter half of this year. Their strategy is to build megaplex sites with double-digit numbers of screens per site at most of the locations. They are in active talks with some of India's prime real-estate developers to secure sites.
CineAsia Returns to Hong Kong
I feel like I am the only one on Planet Earth who does not know that CineAsia 2009 will be moving back to Hong Kong. It seems that Macau lacked the glam and glitter of Las Vegas and was a bit difficult to get to, so Bob Sunshine, Mitch Neuhauser and their crew are bringing the show back to the good ole days in Hong Kong (its second home after Singapore).
Thai Production Drops
Time to look at Thailand, where 2008 stats on movie titles were recently announced. It seems filmmakers premiered only 54 titles last year, compared with 74 in 2007.
Only six films reached the super box-office number of US$1.5 million last year: The Holy Man 2, about a monk into community redevelopment; 4 Bia, a horror flick; Hormones, four stories about teenage love; Chocolate, about an autistic Japanese/Thai girl with martial-arts skills; Ong Bak 2, starring Tony Jaa (just picked up at Cannes for international distribution by Magnolia Pictures); and Queens of Lungkasuka, a period piece by Nonzee Nimbutur.
Cambodia Sees Decline
The Phnom Penh Post reports that new data collected by the Cambodian Ministry of Culture and Fine Arts indicates that the number of Cambodian companies producing films and karaoke albums has fallen more than 75 percent since mid-2008, a trend attributed to increasingly widespread piracy and the world economic crisis.
Sin Chanchhaya, director of the Cinema and Cultural Diffusion Department in the Ministry, said there were 67 film and karaoke production companies registered in Cambodia last year. The most recent survey revealed that only 15 companies remain—11 karaoke production companies and four film companies.
"Our film industry is on its last breath," Sin Chanchhaya reportedly said. "Most producers have been forced to shut down, and cinemas almost no longer exist."
In addition to rampant piracy and the economic downturn, he said, low-quality products and steep prices for Cambodian films had contributed to "the collapse of the industry.”
Hvay Sam Ang, owner of Nice Star Productions, a Phnom Penh-based production company, said he stopped producing films last year because of the decline in consumer demand. "In my opinion, our film industry has nearly died because of piracy and the current economic slump,” he observed. “So how can we continue production?"
Contact Asia-Pacific bureau chief Scott Rosenberg with your news items at (662) 982-4525, by fax at (662) 982-4526, or by e-mail at email@example.com.