3 posts tagged “media”

I've been trying to write at one more blog so as to follow Media and Culture happenings more closely. Here's one of my posts there on the recent multiplexes vs producers standoff in Hindi commercial cinema industry:

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Producer-Distributor vs Multiplex standoff in India

All ye Hindi movie buffs out there, it is time to rejoice as the over two months long standoff between movie producers/distributors vs the 7 exhibitor chains(multiplex chains) has ended.

For those unaware of full proceedings, the issue goes like this: India has roughly 11,000 screens out of which around 800 screens are multiplex screens. However, the revenue share is highly skewed in favour of multiplexes which generate around 50% of overall theatrical revenues. As Vanita Kohli’s article in Business Standard puts it:

According to Prakash Chafalkar of The Multiplex Association of India, of the 11,394 screens in the country, 800-odd are part of multiplex chains. They sell tickets at anywhere between Rs 120-150 against the all-India average of Rs 30-50. Overall, theatre revenues accounted for 76 per cent (or Rs 9,700 crore) of the Rs 12,600 crore that Indian films made in 2008. According to Kapur, multiplexes bring in 55-60 per cent of a film’s theatre revenues, while the remainder comes from the 10,500-odd single screens.

Hence, the producers-distributors want a bigger share of revenue-share pie from the multiplexes now. Now, it’s a known fact the Mumbai territory brings in the highest amount of revenues for industry. But in Maharasthra, due to Government waiver, multiplex chains save all of the 45% entertainment tax — which goes into their pockets only. From the rest of 55% money, the revenues used to be split in the ratio of 48% for first week, 40% for second week and less than 35% for third week.[These ratios are valid all across India, not just for Maharashtra]. The reason for the standoff was that producers-distributors now wanted 50-50 revenue share for all the weeks.

In an analysis done on 18th April, IndianTelevision tried to gauge the financial impact of a long running standoff on both the parties. It estimated a loss of Rs. 850-900 million for the industry in case the strike lasted for over a month. Well.. the losses should turn out to be biggger now.

In a further analysis on 30th May, they tried to analyse both parties’ stands, jotting down pros and cons of their currents stands and ramifications of any potential reconciliation efforts. From the movie industry front, folks were more or less united with Aamir  Khan even going upto the extent of asking his fans to avoid his own movie “Raakh”, which was being released in single screen theatres.

But now, finally, the issue has been settled. “The final agreement with multiplex owners will give producers a 50% share of box office takings in the first week, 42.5% in the second and 37.5% in the third, with the final week yielding 30%. The settlement also allows for a 2.5% swing either way in the event the films make above Rs17.5 crore or less than Rs10 crore. In case of the latter, the films are released with at least 500 prints. ”(source: Mint)

Some people have been left over voicing over three other equally important concerns of the industry. First of these issues is Accounts settlement. Ideally, the producer should get his share of money within a week or two of the ticket sales, but multiplex chains usually take 2-3 months sometimes taking upto 7-8 months for settlements. So, even though as the Indian Media and Entertainment industry tries to scale up to global standards, the business practices still confirm to Unorganized sector behaviour.

The other issue is control over release strategy of movies. Since each print usually costs Rs. 60,000 to the distributor, Distributors usually want to release movies only in select locations so as to maximize their revenues. So, for e.g. release a movie in Cinemax Versova and Fame Lokhandawala but not in Mulund. But this would hurt the theatrical collections of buyer multiplex chain for its Mulund location.. Hence, the standard practice is to have buffet approach — either the producer/distributor has to agree to provide copies to all the screen of Exhibitor chain, or face zero presence in that chain. But then, in heat of the moment and mounting losses, probably no one bothered to discuss nitty gritties. [For more on these issues, you can listen to the podcasts attached to these articles on Mint (1 and 2).]

The final issue concerns with the quoted amount of theatrical revenues itself.

The real issue is not what the share distribution of the pie is, the real issue is what exactly the pie *is*. Many producers and distributors quote inflated collection figures in trade papers which are very different than what is actually being indicated by the multiplex collection feeds. This is not to speak of internal squabbles between the producers and distributors themselves once its time to split the presumed overflows. [via IBOS]

As far as my personal opinion is concerned, I personally don’t have a stand on this issue, except for the fact that single-screen theatres(which in turn, means small towns and villages also) have been totally ignored out of this discussion, as if they don’t matter -- a space which has resulted in rise of Bhojpuri and Regional Cinema. Also, the amount of disorganization in industry is appalling and leads to loss of scale in terms of revenue potential and production qualities. After all, everybody in industry is here to entertain people and make money.. and if despite all these no-settlements or settlements, the industry continues to make pathetic movies and deliever flops after flops, the audiences will hardly care for them.

Okay, time for some fisking.

Vinod Mehta, editor of Outlook, one of the leading magazines in India, says in one of his speeches:

We are told the reader is king and it is the job of a responsible media organisation to provide cent per cent satisfaction - This proposition is now so widely accepted that to argue against it is like whistling in the dark. Those who believe otherwise are seen as cranks, out of touch with the contemporary market -- in other words the reader. If journalism is a consumption item like butter chicken, then why not give the customer the flavour and taste he wants. That, after all, is the first rule of free market capitalism [Emphasis mine].

To defend his so called "anti-free market + good journalism" views, he goes on:

I ask you this: If some readers or viewers wish to see or read about paedophilia, should we oblige? If some readers or viewers wish to see or read about wife-beatings, should we oblige?.

Not only this, he goes on to the extent as saying that readers are fools or they themselves do not know what they want:

I will just provide three examples of the confusion in reader’s minds regarding their expectations from the media.

One. Research shows unambiguously that most readers desire to read more international news. Yet, the international pages of a paper are the least read. International news may be good for the soul but it does nothing for circulation.

Two. Readers insist that the price of their morning paper does not matter. It is such a vital part of their life that they would happily pay the extra rupee for it. Yet, as Mr Rupert Murdoch and Mr Samir Jain have demonstrated, print publications are extremely price sensitive. You can bleed the opposition by cover price cuts. The phrase “invitation price” terrifies rival publishers.

Three. Readers will tell you that they want a single-section, compact morning paper. They don’t want sections and supplements dropping out. Yet the opposite is true. Papers with multi-sections prosper, others suffer.

I think I have made my point. We must lead readers, not be led by them. Really great journalism must do more than merely give people what they want. There has to be room for the unexpected, for stories the public has no idea it wants until it sees them.

Seriously, it's hard to give up the habit of lecturing others, especially those involving taking potshots at free-markets without understanding any of it.

Mr. Mehta, I'm not a "citizen journalist" or whatever you media wallahs term guys like me, and my blog is in no way a competitor to your magazine, but I'm thankful that we have a virtual free market for newspapers, magazines amd blogs in this country or else I'd have been forced to read craps like you every morning. Let me explain you why.

If only some of your readers want to read about paedophilia, then obviously you shouldn't publish it because majority of your other readers will become angry. But if all of your readers want to read about it, then may be you can run a cover story on "Why everybody wants to read about paedophilia?" without actually explaining how to get involved in it.

Regarding your three iconic examples which prove that readers are fools in disguise of consumers, I'd like to suggest you to use a little bit of common sense and read more on revealed preferences. Let's say if you come to me today and ask if given a choice which car would I like to buy, I'd say something like Ferrari, Porsche or BMW. But in reality, I can't afford to buy even one single car and in real life, I drive a bike. So, it is a bike that I actually want. Not even a Maruti Suzuki Swift or, a Honda sedan, but a bike!

If you say that International news is rarely read, the reason is simple. People don't understand the nuances of international affairs so as to be able to read beyond a point. When publishing international news, have smaller articles with easy to understand headlines. Of course, A lot many people want to read about International news, but not in the way you present it currently. Just have a look at The Economist, or The Wall Street Journal -- people actually read international news, but you've to target your consumers correctly for that.

If you want to say that people don't mind paying high price for newspapers, think of Walmart. Most people wouldn't mind paying Rs. 1 or 2 more for some grocery item from a neighborhood mom-and-pop store if it's a one-off purchase only. But when savings tend to pile up over a long period of time, it does affect we consumers subconsciously. And as we do the price-vs-value calculations, we tend to realize that how on earth could we have read Outlook magazine once upon a time in our lives.

And lastly, if you are saying that people don't want supplements falling out of newspapers but actually buy newspapers with supplements -- It is due to the reason that in most of Indian homes, a single newspaper is shared between multiple family members. Therefore, it helps if a newspaper has multiple supplements. It also helps during a train/bus journey as the lightweight supplement is easier to read in a crowded compartment. Moreover, it also helps to identify who's the dumbest person in the house -  just notice who picks up the Page3 supplement first even before he/she has touched the main newspaper.

Mr. Mehta, It is easy to pontificate, make random assertions without doing serious analysis and finally blaming free-markets for poor performance of your magazine. But sometimes, truth is better understood through financial numbers, and hence, you've got to listen to we consumers; It'll never be the other way round.