Economics of ADHM and Shivaay

Karan Johar's Ae Dil Hai Mushkil was one of the most anticipated movies of the year. The expectations were high because Karan was returning 4 years after Student Of The Year' and he had a solid star cast in Ranbir Kapoor, Anushka Sharma and Aishwarya Rai Bachchan too.

But the odds throughout the campaign were stacked against the film. There were threats of boycott because it featured Fawad Khan, there was a bigger film Shivaay' which was also scheduled to release on the same day and many though ADHM might only appeal to the urban audience.

6 days after release, the tide has turned and Ae Dil Hai Mushkil' is already a profitable film for its investors.

The breakup of economics:

• Cost of Production - 68 crore
• Print and Advertising - 20 crore (14 crore in India, 6 crore overseas)
• Margin for Fox Star Studios - 15 crore
• Total - 103 crore

Note: The cost of production does not include Karan Johar's direction fee, but it doesn't need to (he is the producer).

Non-theatrical Recovery:

• Satellite Rights - 45 crore
• Music - 19 crore
• Digital - 10 crore
• Total non-theatrical - 74 crore

In short, even after including the distribution margin of Fox Star Studios, Ae Dil Hai Mushkil has to recover only around Rs 29 crore from theatrical business - a figure that would be covered just from the overseas business of the film.

However, a big film like Ae Dil Hai Mushkil' cannot be declared a hit if the domestic net box office collections aren't equal to or higher than the costs.

Here is the break-down of how much Ae Dil Hai Mushkil needs to attain various box office verdicts:

• Below 85 crore - Flop
• Below 100 crore - Average grosser
• 100 crore or more - Hit
• 130 crore or more - Super hit
• 170 crore or more - Blockbuster

Shivaay Hit or Flop: Business Economics

Ajay Devgn's Shivaay was undoubtedly one of the biggest releases of year and also one of the costliest. The beginning to the campaign was outstanding as the Shivaay trailer was unanimously applauded for its action and scale. Post the trailer, the units that were put out failed to sustain interest and the film eventually opened below expectations on its opening day.

Shivaay did well on the Diwali holiday and has since sustained, but collections never hit the kind of levels that a big film like this was expected to. It needed a couple of 20 crore plus days, but nearly a week after release, the 15 crore mark has only been surpassed once.

The reason it needed those big days is the high costs. The two major circuits combined had to collect somewhere around 75-80 crore just to cover costs of the distributors, but at the end of 6 days Mumbai and Delhi-UP have collected approximately 34.75 crore. Shivaay is not even at the half way mark and the first big week has already passed.

The second weekend will be crucial. It has to sustain and grow, else Shivaay will join the growing list of big films that have disappointed at the box office this year.

Breakdown of the Economics:

• Cost of Production - 90 crore
• Print and Advertising - 20 crore
• Total Cost - 110 crore

Note: Cost of production does not include Ajay Devgn's acting or direction fee, he is the producer.

Recovery from non-theatrical:

• Satellite - 40 crore
• Music - 10 crore
• Others - 5 crore
• Total - 55 crore

We have also been informed by reliable sources of the same film, that Shivaay needs to collect Rs 120 crore to cover distributor costs.

Here is how much the film needs for the various box office verdicts:

• Below 110 crore - Flop
• Below 130 crore - Average
• Above 130 crore - Hit
• Above 170 crore - Super Hit
• Above 220 crore - Blockbuster