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Film viewing is an experience after which one feels inclined to pronounce a judgement. Whatever the kind of film, its genre, whether good, bad or ugly, people can’t refrain from declaring what they thought of a film. They’ll discuss the film with family, close friends or colleagues at their work-place. ‘Hit’, ‘flop’, ‘super-hit’ are terms usually used by cinegoers to describe a film they’ve seen.

But while these terms are quite loosely employed by the general public, words such as the above are actually very technical in nature with specific meanings. More often than not, when laymen employ the above terms to describe a film, they use them to describe their feelings about the film, about how they liked or disliked it.

The film trade, however, treats a film as a ‘hit’ or a ‘flop’ according to its earnings vis-à-vis its cost. Whereas personal judgements can be very subjective, money is the only tool to categorise films into hits, flops, semi-hits, disasters, super-hits etc.

A film is treated as a hit by film trade analysts only if it more than doubles the investment of the distributor. If the cost of a film to a distributor is not recovered after the film has completed its run, it is termed a flop. Not many are aware that the cost of a film to its distributor - and not to the producer - is compared with its earnings in the distributor’s circuit for arriving at the categorisation of films as hits, flops etc.

For the uninitiated, a producer is the one who makes the film by arranging for the finances, stars and technicians and their dates. He sells it to various distributors, one for each circuit or territory. The buyer, or distributor as he is called, has the right to release the film in only the territory for which he has acquired the distribution rights. Thus, for example, the person who buys a film for the Bombay circuit will release it in cinemas falling in the jurisdiction of Bombay city and suburbs, parts of Maharashtra (like Pune, Aurangabad, Malegaon etc.), Gujarat, Saurashtra and parts of Karnataka (like Hubli, Belgaum etc.). The circuits for the purposes of film business have nothing to do with state boundaries we know. For instance, although Central Province was the term used to describe today’s Madhya Pradesh in pre-Independence India, even today C.P.

Berar is the nomenclature used in the film industry to describe the territory comprising parts of Maharashtra (like Amravati, Akola etc.) and parts of Madhya Pradesh and Chhattisgarh (like Raipur, Jabalpur, Bhilai).

The price (MG or Minimum Guarantee) which the distributor pays for acquiring a film’s distribution rights, usually for 5, 7 or 10 years is the major chunk of his investment in the film. Since Bombay is the biggest territory, its price is considered the ‘ratio’ of the film. All other circuits are sold as percentages of the ratio. Thus, for instance, C.P. Berar fetches a price that’s 30 - 40% of Bombay’s price or, in other words, 30 - 40% of the ratio of a film. Rajasthan is 20 to 25% of the ratio. The other two components of the distributor’s investment, besides the MG price, are the cost of prints and publicity.

As against the old system of distribution in which the producer used to give the distributor quota prints alongwith the distribution rights, today the cost of prints is borne by the distributor. The publicity in his territory is also to be done by him. Thus, the cost to the distributor is the total of all the three aforesaid costs (MG royalty plus print cost plus publicity cost).

For example, the total investment of the Bombay distributor in the recently released Qayamat for Bombay was Rs. 2.75 crore. If the film would’ve done a business of Rs. 2.75 crore, it would have been termed an average fare. If it would not even have recovered its cost, it would have been termed a flop or, if the business fell far short of the investment of Rs. 2.75 crore, even a disaster. But if Devgan Software, the Bombay distributor, does a business of Rs. 5.5 crore, the film would be referred to as ‘A’ class or, in other words, a semi-hit. Business of more than Rs. 5.5 crore would entitle it to be referred to as a hit (‘A1’).

And if Qayamat goes on to touch the figure of Rs. 6.5 or 7.5 crore, it would be construed to be a super-hit (class ‘AA’). If it does more than even that, it would qualify to be a blockbuster, depending on how much is the final figure of business done. In reality, the film is expected to touch Rs. 3 to 3.25 crore, which would make it a commission earner. A film becomes a commission earner when it covers its cost plus 25% more than that. Twenty-five percent is the industry norm for calculating the distributor’s expenses for releasing a film. Between a commission earner and a semi-hit is the nomenclature ‘overflow film’. Such a film covers its cost as well as 25% commission and goes on to do more business.

Every rupee earned after the entire commission of the distributor is recovered, is to be shared with the producer, usually equally. That is to say, the distributor keeps 50 paise of every rupee earned after his commission is earned and gives the remaining 50 paise to the producer as his share of overflow. Hence, the term ‘overflow film’. When film industry trade papers predict the fate on the day of a film’s release, what they actually do is estimate the likely business of the film through its entire run of 5, 7 or 10 years and compare that with the price for which the said film was sold.

Rakesh Roshan’s forthcoming Koi...Mil Gaya has been sold at Rs. 3 crore per major territory. Which means, a distributor of a major circuit will have to invest about Rs. 3.50 to 3.75 crore in the Hrithik-Preity starrer, taking into account the cost of about 50 prints and likely publicity for the big-budget film. Only if it does a business of about Rs. 7.50 crore will it qualify to be termed a semi-hit. Further, if it is to be called a blockbuster, the Rakesh Roshan flick will have to do a business of at least Rs. 10 to 11 crore.

Interestingly, although the distributor’s revenues depend on whether or not the public likes a film, a producer can make his money on the day of release itself, if he has been able to pre-sell all the rights. Technically and theoretically, therefore, even if a film were to bomb on release, the producer would sit pretty with some crores or lakhs in his bank account because the risk is that of the distributors of the various territories. This is generally true in the case of top-line producers of big-budget star-cast films who have successful track records. For them, their productions are hits and super-hits or even blockbusters on the day of release itself. For example, although Subhash Ghai’s Yaadein was a flop in the distributors’ hands, the showman’s company, Mukta Arts, made a hefty profit in the disaster as the film was pre-sold to distributors across the world. But for the majority of the producers who can’t pre-sell their films, the risk is more theirs than that of their distributors who may not buy the film on MG royalty basis.

The other popular forms of distribution include the advance basis and the pure commission basis. Under the advance system of release, a distributor advances a pre-determined amount to the producer but if he can’t recover that amount from the theatres, the producer has to refund the shortfall after a fixed period, usually a year after release. Under the pure commission system of release, the distributor may advance nothing to the producer who would even give him the prints for releasing in the cinemas.

The distributor releases the film in the producer’s account and remits the shares, after deducting his commission (which may be 7.5%, 10% or 15%, depending on the arrangement between the producer and the distributor), to the producer.

So, next time, you use the words ‘hit’ and ‘flop’, be sure, you use them in the right context. If not, the better way to describe your opinion would be to say whether you liked a film, hated it, loved it or adored it.

SEPARATE BOX

Circuit: The area for which a distributor buys the distribution rights for a film for a period of (generally) 5 or 7 or 10 years.

Ratio: The price for which a film is sold for Bombay circuit. Prices for all other circuits are determined as a fixed percentage of the ratio. For example, Delhi-U.P. is usually 80 to 85% of the ratio. But in the case of action films, which have a bigger market in North India, Delhi-U.P. may be sold for 100% of the ratio.

Flop: If a film can’t even cover its investment by the distributor, it is termed a flop.

Average: If a film manages to simply recover its cost, it is an average fare.

Commission Earner: When a film recovers the investment and, over and above that, gets in revenues of 25% more, it is termed a commission earner. Thus, if the distributor’s total investment in a film is Rs. 2 crore, and it does a business of Rs. 2.50 crore, it is termed a commission earner. 25% of Rs. 2 crore is Rs. 50 lakh which is the amount of commission which belongs to the distributor to cover his expenses of releasing the film.

Overflow: When a film crosses the commission mark, the revenues thereafter are to be shared between the producer and distributor. The producer gets a share in the ‘overflow’ business, generally fifty-fifty. Such sharing makes the film an overflow film. Overflow films can be further categorised as under, depending on the quantum of overflow.

Semi-Hit: A film which does a business that is double the distributor’s investment in it, is termed a semi-hit. In such a case, the producer gets handsome overflow from the distributor.

Hit: If a film more than doubles its investment in the distributor’s hands, it is deemed to be a hit.

Super-Hit: If the returns on a film are much more than double the investment, it is termed a super-hit.

Blockbuster: Returns are almost triple the investment.