A New Bollywood movie is released every Friday and you go to the theater to watch them and pay some money to purchase the movie tickets. Have you ever thought about how this money is gone to the Movie Maker and how does a Bollywood movie earns Money?
To get the answer, let’s first understand where a movie maker does invest money in making a movie?
Role of Producer
To make a movie, a movie maker needs the money and for this, he needs a producer. Therefore, the Producer is a person who invests the money in the movie.
Where exactly the money is spent in the Movies?
· Payments of Actors or Actresses or other team members
To make the movie, the first thing you need is the Story. After that dialogues will be written. After that, you need to decide who will be the Actor or Actress of your movie depending upon the script.
Different Actors charge different amounts. E.g. Salman Khan takes ₹60 crores for signing a movie while actors like Shahrukh Khan, Amir Khan take ₹50 crores and Akshay Kumar takes ₹40 crores for signing a movie.
After the selection of Actor, rest crew members get finalized and payments will be given to them according to their work in the Movie.
So, Money is invested in signing Actors or Actresses and other team members.
After the selection of the crew, the next important step is the selection of Location for the movie. If the movie is going to shoot outside India, then expenses like a hotel room, food or other get included. Here, money is spent by producer.
After, the completion of a movie, a lot of money spent on video editing.
Therefore, to make a movie a lot of funds required that are given by the Producer.
Suppose, ₹100 crores are spent in making a movie, Then the question arises, how to make money from the movie or how to recover the money spent on making money or how to make profits. Here comes the role of a Distributor.
Role of Distributor
A Distributor is a person or group of people who release the movie. There are two cases:
Case I: When the producer sales the movie to Distributor at some price.
Suppose, a producer spends ₹100 crores in making a movie and sell the movie to Distributor at ₹150 crores. Therefore, the producer makes a profit of 50 crores and gives money to everyone involved in the movie. After purchasing the movie distributor is only responsible for releasing the movie and make money.
Case II: When the film producer himself is the distributor.
In this case, film producer himself releases the movie and earns the profits.
Whether the Film producer becomes a distributor or a producer sells the movie to the distributor, the question is how Distributor or film producer who himself is the distributor will earn money? Or if the money comes from theaters is only source of income?
Suppose, a distributor has a movie with him, then he will make a Market budget for it i.e. he will spend money on marketing of the movie. He will play songs, display posters or send actors for marketing to ensure that everyone gets to know about the movie and its releasing date. Marketing cost maybe around ₹15-₹20 crores. So, he needs to spend extra money for marketing also.
Now you think the distributor earns money from the theater but the reality is different. They already earn the money before releasing the movie but how?
Suppose, a new movie arrives in the market and any song in the movie becomes the ringtone. There are some rights called copyright which is sold by the distributor to a particular company. Similarly, a song being played on a T.V channel before the movie release, then these rights are different and distributors can sell these rights can earn the money.
Also, there are satellite rights i.e. which channel will broadcast the movie for the first time on T.V. i.e. whether Sony Max will broadcast it first or Star Gold or any other channel. These rights are very costly.
There are many other rights also e.g. if you go to a petrol pump and a movie song is being played, then this is different right or apart from this, if a movie is displayed on a bus or airplane, then these rights are different.
In short, we can say that before releasing any movie by selling its rights, producer or distributor makes a lot of money on paper.
Who are these Distributors?
There are many distributors in the market e.g. Yash films, Dharma Productions, Eros. Entertainment, Fox Star, etc, whose name is displayed on the screen at the beginning of the movie.
Role of Sub-Distributors
These distributors go to different sub-distributors who in return have rights or they decide which movie will release on which theater. Every region has different sub-distributors. Sub-distributors have done proper mapping with Local Theatres. An Agreement is signed between the theaters and the sub-distributors regarding the distribution of profit between them.
Now, if the movie is displayed in single screen theater then the earnings from tickets are divided with the ratio 25:75 or 30:70 that means 25-35 % amount of movies ticket will be taken by theater and rest amount will be given to the sub-distributor.
But in the case of Multiplex or Malls, this ratio differs. In the first week of the movie release, the ratio is 50:50, in the second week this ratio becomes 60:40 and in the third week, it reduced to 70:30, which means if the displayed in a multiplex for a long time then the multiplex can earn the profit.
By this, the money you spend on purchasing the movie ticket is shared between the sub-distributor and the theater and then some percentage of this will be given to the distributor or the film producer who himself releases the movie.
Let’s understand with some examples
You must have seen Bajrangi Bhai Jaan whose producer were Salman Khan and Abbass Khan. The budget of the movie was ₹90 crores in which Salaman Khan was an actor. Its total earning was ₹400+ crores from India only and if we look worldwide, then this movie earns ₹970 crores. So, by investing 90 crores in the movie, a huge profit is earned.
Similarly, take an example of another mover i.e. Dangal, whose producer was Amir khan and his wife Kiran Rao. He acted in the movie. The Budget of the movie was ₹70 crores but it's earning in India is ₹580 crores and worldwide is ₹2200 crores. That means, with the investment of ₹70 crores, they had earned ₹2200 crores.
Therefore, this is the reason that these days actors are becoming producers as well as distributors because by spending some money they are getting huge profits.
Nowadays, big actors themselves become producers and distributors of their movie as they are getting more profit and small movies are sold to the distributors for release. If the movie flops, the whole loss will belong to the distributor.