• What does Box Office Collections mean and how is the number calculated? When is a movie a hit? Can collections be inflated?

Listening to Hindi songs of the 1960-1970’s gives me so much happiness for which I am grateful to the lyrists, music directors and producers. I have seen classics like Guide, Waqt, An Evening in Paris, Khamoshi, Hum Dono, Aradhna, Anand, Padosan and Mera Naam Joker, atleast six times. 

Unlike today, then lyrics and box office collections had a meaning. Movies ran for 25-50 weeks and when declared Hit, we know it was actually one.

In today’s multiplex era the movie Pathaan was declared a Hit in week one. Some said box office collections touched Rs 700 crores, others said Rs 160 crores. What does the term Box Office mean? 

This article covers what does term Box Office Collections mean? When is a movie a hit? Can collections be inflated or deflated?

1. What does term Box Office Collections (BOC) mean?

The exact terms between film producers, distributors and exhibitors vary from movie to movie.  Sometimes a producer sells rights for a lump sum or minimum guarantee plus share or pure commission basis. The table gives average numbers (prepared after speaking to sources in Bollywood) and explains in a simple way. Focus on the concept.  

Table 1 – What is Box Office?

Note that the exhibitor share varies from week to week. If a movie runs longer, the share goes up. Typically, it is 50:50 in week 1, 55:45 in week 2 in favour of exhibitor, 62.5:37.5 in week 3 and fourth week onwards 70:30.

So when media says BOC Rs 100 crores, the producer gets only Rs 43 crores. A producer also incurs marketing and printing cost. The extent depends on arrangement with the distributor (funds movie and is usually appointed for a territory).

There could be variants of the above for e.g. the producer pays a minimum guarantee plus a profit share.

Proceeds from sale of satellite television telecast or OTT rights, songs royalty etc usually go to the producer.

Table 2 – Outside India Collections

When a producer has its own overseas offices for e.g. Yash Raj Films has offices in U.K. USA and UAE the above table will not apply.

Key points - The risk of success or failure of a movie lies with the producer. There is no industry body that declares box office collections although there are bodies like Producers Guild of India and IMPPA

2. When is a movie a Hit?

As a qualified accountant say a movie is a hit when income substantially exceeds cost.

Income includes net collections from domestic and overseas markets and sale of rights e.g. television/ music rights. Cost would include all costs associated with movie i.e. production and marketing.

So saying a movie has box office collections of 300 cr or has entered the 100 cr club means little. Question to ask how much profit has the movie made?  

Sometimes, the box office collection figure becomes a matter of prestige or ego. When ego comes into play, profitability could take a back seat.

The industry, probably prodded by the government, must have a body that declares box office collections just like SIAM (Society of Indian Automobile Manufacturers) does in the automobiles sector. Transparency is important as Gautam Adani is learning today. Also read Is the auto slowdown for real 

Till transparency starts expect confusion as this pic shows. 

There could be an Indian equivalent of www.boxofficemojo.com , an American site that tracks box-office revenue in a systematic way. It was bought by IMDB that is now owned by Amazon.

3. Can Box-office numbers be deflated or inflated?

Technically yes. Here are some examples that one has heard about.

In 1970, a leading film producer allegedly bought tickets of Mera Nam Joker and sold them cheap so public might realize movie is not worth it.

In 2010, an old friend visited a leading multiplex chain. He was given seats in first two rows because other tickets were sold out. By interval he realized the theatre was empty. The salesperson at the counter said what could she do if people bought tickets and do not come. Someone might have paid cash to buy tickets in order to inflate collections.

In 2015, a good friend say AK was invited by another friend to see a movie at leading multiplex chain. On reaching AK learnt that the entire hall was booked by his friend. Deeper intent was to boost collections.

In the absence of documentary evidence cannot share more details.

Having said the above, industry sources state that due to increase in the number of shows at multiplexes and large scale computerization at their end it is difficult to replicate examples 2 and 3 referred to above.

If a movie shows abnormally high overseas collections it could be genuine collections or a way to receive money as legitimate income into India. There is however, no tax break on such receipts.  

4. Pathaan Collections

This has received undue press coverage. Perhaps, Bollywood and others wanted the movie to be known as a hit in order to get over a depressing 2022.

When media reports start showing global collections for a movie out of the blue ordinary consumers guess it is paid PR and an attempt to influence them to watch the movie. If so many are seeing movie, why not you?

Business analyst and Influencer Taran Adarsh tweets - Feb 6 said Pathan crosses Rs 300 crs overseas. Tweet of Feb 7 says, “YRF drops rates of Pathaan in week 2 at National Chains. Resultantly, admits on Monday are similar to Friday.” Aditya Nayak compares two tweets of Taran and tweeted.

Would a producer reduce rates of a movie if it were a hit? Should not collection figures be released by an industry association?

It does not matter what movie collections are. Since cost per India Today is Rs 240 crs and per Filmik, movie costs Rs 275 crs, has it made a profit or not?

Hope this piece provides clarity. Am always happy to stand corrected.