How Is The Box Office Collection Calculated In Bollywood?

How are collections from the movie box office calculated in India?

How Is The Box Office Collection Calculated In Bollywood: All have heard the name of box office collection, but do you know how it is estimated when a new film is released, how much the film has earned, or how much loss the film has suffered? Whenever a new film is released, you hear in the news what the total box office collection of that film. After all, what is this box office collection? How do we get to know about it? Let us tell you today how the box office collection of a film is counted.

Producer: This is the person who provides money for all the expenses incurred in making a film. The amount that a producer invests in making a film is called the budget of that film. This includes the fees paid to the actors, travel, food and lodging expenses of technicians and crew members, etc. Apart from this, the expenses incurred on the promotion of the film are also included in this.

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Distributor: It is like a link between the producer and the theatre owners. The producer sells his film to distributors all over India. Sometimes the producer also sells the distribution rights of the film to the distributors through a third party. He makes his deal with the third party even before the release of the film. In this, the profit or loss falls on the third party.

Theatre owner: The distributor persuades these theatre owners to screen the film in their theatres based on an agreement. There are two types of theatres in India. The first is a single screen and the second is a multiplex chain. The distributor has different types of agreements with both types of theatre owners. These agreements are made especially keeping in mind the number of film screens and profit returns. On the basis of these, it is decided how much of the earnings from the theatres will go to the distributor.

It is worth noting that the total collection is collected by the theatre owners only. Now, out of this total collection, about 30 percent goes to the state government as entertainment tax. This tax has different rates according to each circuit. Finally, a part of the amount that remains after paying the entertainment tax is returned to the distributor as per the agreement.

How is box office collection calculated?

The returns that distributors get from theatre owners are given every week. In case a film is distributed across multiplexes, it normally gets 50 percent of the entire collection in the first week, 42 percent in the second week, 37 percent in the third week, and 30 percent after the completion of its fourth week and shared with the film distributor chain. On the contrary, in the case of a film being cleared for a single screen, the distributor may be entitled to 70 to 90 percent of the revenue during the first week and continues earning all through the period that the film is screened. In this way, the profit or loss of the distributor = cost of purchasing the film – distributor’s share

collection calculation an example:

Suppose the average price of a ticket in a multiplex is Rs 250 and a total of 100 people watched the film, and 100 shows of the film were held in the entire week. Thus, the total collection of the film in one week was 250x100x100 = Rs 25,00,000. Now after deducting entertainment tax at the rate of 30% from this, the total earnings were Rs 17,50000. According to the agreement, 50% of these earnings in the first week will go to the distributor. Similarly, 42% of the second week and the same will continue to go for the subsequent weeks as long as the film runs.

Now, suppose the price of a ticket on a single screen is Rs 150 and 100 shows are shown in the whole week and 100 people watch the film in each show. According to this, the total collection of the cinema hall for the whole week will be 150x100x100 = Rs 15,00,000. Now, after deducting entertainment tax at the rate of 30% from this, the total earnings will be Rs 10,50,000. Now if according to the agreement, 80% of the earnings have to go to the distributor, then he will earn a total of Rs 8,40,000 in one week. The distributor will keep getting his share for as many weeks as the film runs. Also know that apart from the sale of tickets in theatres, the film also earns from non-theatrical sources like music rights, satellite rights, and foreign subsidies etc.

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