How is a film determined to be a hit?

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Shaitaan Haiwan

@Shaitan-Haiwan

Stunner

+ 8

Posted: 10 years ago

Sorry guys I dont really understand how the Box Office thingy works? Can someone please explain it to me?...For example in one of the Phantom topics...someone posted a tweet that said that total costs of Phantom is 60 Crores - and the movie would need to make 90 crores to be a average.

Using this as an example...I dont understand how making 30 crores after recovering costs still makes a movie an average earner? So how is a film determined to be a hit...is there a particular amount that it needs to earn or something? 😕 I just dont get it...sorry if i sound dumb

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870349

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Posted: 10 years ago

I think a film needs to make double its budget in theatrical revenue to be a Box office hit .

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fairy_queen

@fairy_queen

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Posted: 10 years ago

Originally posted by: Shaitan-Haiwan
Sorry guys I dont really understand how the Box Office thingy works? Can someone please explain it to me?...For example in one of the Phantom topics...someone posted a tweet that said that total costs of Phantom is 60 Crores - and the movie would need to make 90 crores to be a average.
Using this as an example...I dont understand how making 30 crores after recovering costs still makes a movie an average earner? So how is a film determined to be a hit...is there a particular amount that it needs to earn or something? 😕 I just dont get it...sorry if i sound dumb

both producers and distributors have to make money for a movie to be hit. I don't believe the budget is 60. I would say around 50. It will be a hit if it makes ~80.

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@DB_reloaded

Trailblazer

+ 5

Posted: 10 years ago

if a film is made on budget around 50cr the film needs around 90cr to recover all its investment from the theatrical release

its just a simple theory

but in reality

producers sell their film to many individual distributors acrosss 10 plus territories in different prices

so if the Mumbai circuit is sold on a price of 20cr the distributors need to earn around 30-35cr to recover its investment

so verdict depends on how many distributors have made profit in some cases hardly any distributors make profit but producers do as they breakeven via Non theatrical revenues or overseas revenues and also via selling their films upfront like Jai Ho in that case hardly any films gets a Clean hit tag mostly semi hits like Jai ho Bang Bang

Edited by DB_reloaded - 10 years ago

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Nikki

@touch_of_pink

Sparkler

+ 8

Posted: 10 years ago

Indian Box Office Verdicts

2 years ago

by Indicine Team

3 min read

Note: This article was first published way back in 2007.

Indian Box office verdicts are usually confusing. A few movies are called Blockbusters by the media even though they are just Semi-hit to Hit. A few movies which go into overflow are termed Flops.

Also many of you might have wondered on what basis a verdict is given out on a movie. How does the trade define a movie as a Hit, Flop, Superhit, Blockbuster. Hopefully this article will clear all your doubts.

Gross collections - Total collections at the box office.

Nett Gross (Raw collections) - Is the total gross minus entertainment tax which is usually around 30%. When the government decides to waive off the taxes of a certain film, it goes tax-free. In which case, no entertainment taxes will be paid by the producers / distributors.

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 cant 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.

ALL TIME BLOCKBUSTER: When returns are more than triple the investment i.e more than 300%.

https://www.indicine.com/movies/bollywood/indian-box-office-verdicts/

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Nikki

@touch_of_pink

Sparkler

+ 8

Posted: 10 years ago

This article is more informative and they have used Tevar's box office collections as a case study:

Box Office India: What makes a film Hit, Flop, Super Hit or Blockbuster?

8 months ago

by Indicine Team

5 min read

A lot of our readers wonder how a film that earns around Rs 60 crores, like an Action Jackson, is declared a FLOP' at the box office. On the other hand, a film like Hate Story 2 that earns just Rs 28 crores, is declared a HIT'.

So how exactly are verdicts like HIT, Flop, Average, Super Hit or Blockbuster given to films?

There are a lot of points to consider before giving a theatrical verdict to a film.

1. The person who creates / packages the film is the called the PRODUCER'. He / she may create the entire project like hiring the director, actors, script-writers, technicians etc.

Examples of leading producers: Rakesh Roshan (FilmKraft Productions), Karan Johar (Dharma Productions), Farhan Akhtar and Ritesh Sidhwani (Excel Entertainment), Sajid Nadiadwala (Nadiadwala Grandson Entertainment), Bhushan Kumar (T-Series) etc.

2. Once a film is ready for release, the producer may decide to sell the film to a Corporate house' or a Individual distributor'. For example, Sajid Nadiadwala sold Salman Khan's Kick' to UTV Motion Pictures; Excel Entertainment sold Don 2 to Reliance Entertainment'. Producers always sell it at a price higher than the Cost of Production' (which is known in the trade as COP). This ensures that the creative producers are safe in terms of the business of the project. To give our readers another example, the COP of Jai Ho was very less, but the film was sold for a much higher price to Eros International', which was the reason why the film was a failure at the box office. That's the reason why we hear that the producers (in this case Sohail Khan) made his money, but the distributors (Eros) lost.

Examples of leading distributors

Yash Raj Films (Producers + Distributors)
Anil Thadani (AA films worldwide) - Movies distributed include Hate Story 2, Yaariyaan, Humpty Sharma ki Dulhania, Hasee toh Phasee, Dirty Picture, Ek Villain.
Eros Entertainment(Producers + Distributors) - Distributed films like Happy Ending, Jai Ho, Linga, Ram Leela, Tevar etc.
Reliance Entertainment (Producers + Distributors) - Distributed Don2, Holiday, Singham, Bodyguard
Viacom18 (Producers + Distributors) - Distributed Mary Kom
Fox Star Studios (Producers + Distributors) - Distributed Bang Bang, My Name is Khan, Jolly LLB, City Lights

3. Once the distributor acquires the project at a premium, they might decide to sell different territories to sub-distributors. These sub-distributors then sell the film to theatre owners (exhibitors).

To understand the business of a film, we have to understand the cost involved at each step. Thus when we claim that a Tevar or Action Jackson have failed, even with reasonably good collections, the costs incurred at each step maybe higher.

Case Study of Arjun Kapoor's Tevar

Boney Kapoor (Producer) invests about Rs 30-35 crore into the film
He then finds a buyer (Eros International) who buys the theatrical distribution rights for Rs 48 Crore.
Eros International (Distributor) then invests around Rs 12 crore to market (promote) the film.
Total costs of Tevar = Rs 60 crore
Estimated total revenue from other sources like Music, Satellite rights and Overseas is Rs 18 crore approx.
Total cost to recover from theatrical business is Rs 42 crore (Revenue from other sources i.e Rs 18 cr deducted from total costs of Rs 60 cr)

Now, the most important point. If a Distributor has to recover Rs 42 crore from theatrical business, then the film has to collect atleast around Rs 80-85 crore. The reason is, a share from the total collections also goes to the exhibitor (theatre owner). If Tevar collects around 50 crore at the box office, Eros International would only get around 25 crore.

Breakdown of Tevar (all figures are approximates to make it simple for our readers to understand)

Money to recover = Rs 42 crore.
Expected total collections from theatrical business = Rs 50 crore
Distributors Share that Eros International would get (Total recovery) = Rs 25 crore
Total Loss = Rs 17 crore

Reason for failure is the high price paid for Tevar by Eros International. If Boney Kapoor had sold the film for a lower price or released the film himself, Tevar would have been a success at the box office even if it collected around Rs 50 - 55 crore.

Finally, based on the costs and various other factors, we then give our box office verdicts to films. Taking the case study of Tevar, here is how much it had to collect to get different verdicts.

For Tevar to be a All Time Blockbuster - Rs 175 crore or more.
Blockbuster - Rs 140 crore or more
Super Hit - Rs 110 crore or higher
Hit - Rs 90 crore or higher
Average - Rs 70 crore
Flop - Anything less than Rs 60 crore

Note: There is no fixed formula for verdicts. In today's times, trade analysts are a little more lenient when it comes to verdicts. With strict verdicts, Kick wouldn't be a Blockbuster' as some distributors lost money (due to high costs). Bang Bang wouldn't be a HIT and Happy New Year wouldn't be a Super Hit'.

Also, if a film does well in theatres, the distributor or producer may get a higher price through Satellite Rights, thus additional revenue is generated from other sources if it does well in theatres.

Every film that is released in theatres must be assessed this way to understand its business and final verdicts.

https://www.indicine.com/movies/bollywood/box-office-india-what-makes-a-film-hit-flop-super-hit-or-blockbuster/

Edited by touch_of_pink - 10 years ago

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@TheRowdiest

Stunner

+ 6

Posted: 10 years ago

Does not matter how much a producer earns from various sources , if distributors face loss then movie is a flop and if they recover their money then it's a hit ...BB , ATBB depends on how much it earns more

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How is a film determined to be a hit?

Indian Box Office Verdicts

Box Office India: What makes a film Hit, Flop, Super Hit or Blockbuster?

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