Why Distributor Share is wrong criteria to rank box office
Monday, November 23, 2009

Would we consider rating the commercial success of the last Michael Jackson music album based firstly on the order of how much the CD delivery truckdriver made?

That's exactly who a distributor is in the movie business. He's the truck driver, a middleman. The distributor is not Shahrukh Khan or Salman Khan or Amitabh Bachchan or Akshay Kumar or Hrithik Roshan or Abhishek Bachchan, nor is he Sanjay Bhansali or Reliance or Warner Brothers or Yash Chopra creating the product. Nor is he the audience consuming the product. His/Its relevance to the movie's 'economy' is strictly intermediate. Neither irrelevant, nor primary.

In the movie album business, music CD can be the product, a company like Sony the album producer, and the buyer is the audience. But have we ever heard of music album's success being contingent on the distributor ie (truck driver)'s share? No, and that is why the notion of using distributor share primarily to rank movies' economic impact doesn't make sense either. You don't rank a movie's success by the agent's commission, which can depend on a number of factors, including how low or high he agrees to buy a film at.

This is not to entirely discount distribution's role. Of course without distributors and distribution films don't get from producers' studios to theaters. But if the movie release business is a supply chain, a distributor is just one node in that supply chain. Distributor share can be a way to look at films, but it is not the centrally critical criteria as far as overall box office/commercial result is concerned.

Ultimately the box office and commercial impact measure of a movie is whether it managed to create more capital than it took to generate it. For that we have to measure the inflow-outflow at each node of the release process and if the net cash inflow is more than the net outflow, the movie is a commercial success. Otherwise, not.

However since in India, there is not the transparency to reveal cost structures at each node, the best indication is the admissions grosses. And to create the commercial profile based on that primarily. Even there, there is a catch. Collections are revealed as net collections. When that is not what the consumer is paying or the movie generating at the actual box office. Why talk of cost of production of film in gross terms (ex. it cost 80 crores, it cost 50 crores), but box office collections in only net terms? Talking in net terms excludes the impact it makes towards Government coiffers via the entertainment tax and thus on the overall economy. What the movie is generating is reflected in the gross box office not the net.

In closing, Gross Box Office ie GBO, is the international standard in the cinema business, not nett or distributor share. And the Indian film industry should work towards transparently reporting that first and foremost across all regions and languages in its cinema business.


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