Calculating Box Office Collection For A Film

Movie making is an Art. But, more than art, it is a business. Behind every movie, there is an agenda and a specific audience. Some are just for commercial entertainment while others are to create a change in the mindset of society.

Movies have played a great role in shaping society. At times it has been a reflection of how we are. Pick a movie and you will realize that it tells us much about fashion, an ideology of people, and even the technology of that generation.

Every Friday when a new movie releases, the destiny of hundreds and thousands of people is at stake. It’s not just money but blood and sweat of the entire cast. It takes directors, producers, distributors, actors and actresses, stunt men, VFX artists nowadays, photography team, prosthetics, make-up artists, musicians, technicians, and the list is endless.  

We closely associate movies with the term “Box Office Numbers”. Consequently, The box office is the account of the money a particular movie makes.

What is Box Office in the cinema?

Box Office Collections are the measure of the money a particular movie is making at the theatres. It is a tedious process that is well-defined and structured. We measure Box Office collection in two ways:

  1. Gross: This is a collective sum of the ticket value sold at the counter.
  2. Net: This is (Gross collection – Entertainment tax).

For the movie-makers, it is the net collection that holds importance. Gross collection is something theatres publicize to lure the people into believing how well a film is doing. But, the actual judgment about how much money the movie makers made is on the basis of net collection numbers.  

How is the Box Office collection calculated?

The process to calculate the Box Office collection is pretty simple. 

Gross BO collection= No. of tickets sold * Cost of a single ticket

It is notable that there is parity in whether a film has done well or not if the gross collection is considered between states. This is because different states levy their entertainment taxes on a different percentage. When comparing any two films, there are various parameters that need to be taken into account. Moreover, the average ticket prices also have a considerably large window that cannot confine the calculations to fix numbers. 

It is not necessary that the people involved in two different movies that have a gross collection of 200 crores may have earned equal money.

Consider two theatres A and B. A is situated in a state that has 0% tax on movies and B has a 30% tax. In this situation, for a single ticket that costs Rs. 200, the money that goes to the movie makers is Rs. 200 in the case of A and Rs. 140 in B.

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How is the profit and Box Office money distributed for a movie?

The process right from its making to releasing for the audience in theatres is a costly affair. There are certain roles that need to be understood to understand how the distribution of profits takes place.

Producer: The person who funds the movie and is the whole and sole financial provider for the film is the producer. There can be more than one producer for a film. The budget of the movie is in the hands of the producer. Producers are at the uppermost tier in the film industry.

Distributor: This is the strongest link between producers and theatre owners. The distributors are the ones that buy “Theatrical rights” from the producers. Presently there are eleven circuits for distribution of Indian cinema across India. They are namely:

  1. Bombay circuit
  2. Delhi circuit
  3. Nizam circuit
  4. Rajasthan circuit
  5. Andhra circuit
  6. Tamil Nadu circuit
  7. Mysore circuit
  8. Eastern circuit
  9. East Punjab circuit
  10. C. P. Berar circuit
  11. Central India circuit 

The finances are managed such that suppose a movie is made with a budget of 15 crores by the producer, he sells it to the distributor who pays 25 crore rs. for it. As a result, the producer has made his profit of 10 crores. 

The distributor now spends an additional 10 crore on its promotions and advertisements. This means that the distributor’s spending is 35 crores.

The New-Age Box Office Scenario

In order to recover this money and make a profit after giving the share to theatres (Both single screen and multiplexes), he needs a revenue generation of at least 70-75 crores. Only then we consider the movie to be a “HIT”.

The profit distribution changes steadily from week-to-week from the day of release of the movie. They fix the profit share distribution ratio between distributor-theatre owner. In the first week of release, it is 50-50%, in the second week of 58-42%, the third week it is 63-37%, and thereafter 70-30%.

Nowadays big movie stars avail a certain percentage from the share of profits besides their fees. Furthermore, the more famous and bigger the star better are the chances of the film to gross. Thus, producers entrust big-budget films with bigger stars. Why did you think producers worship Ranveer Singh, Salman Khan, or Amitabh Bachhan?

However, the scenario now is changing. People give importance to talent and potential, and movie-makers are ready to take the risk with new faces. Be it Ayushmann Khurana, Rajkumar Rao, Sushant Singh Rajput, they are all now part of films that are breaking barriers in every sense. Not just that, we have seen many women-centric films that cast Vidya Balan, Tapsee Pannu, etc. that are doing quite well.  

This change is ultimately due to the change in how today’s audience is perceiving the Indian films. We want fresh concepts, stories and are over the cliched dancing around the trees cinema.

So, the next time a film releases and you hear that it is grossing 100 crores and beyond, you know what it means. Don’t let the trade analysts, movie buffs, and financial gurus fool you. 

I guess now you know why that Bucket popcorn or simple snacks like Samosas were so expensive in the theatres.

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